There are so many peculiarities about credit cards, their charges and usage that a beginning cardholder would probably need a 2-year course to know all of them and learn how to use them to advantage. At present however, the luck of adequate information results in being charged hefty interest and numerous fees.
Cash advances are among most vague issues on credit cards that cause lots of unexpected excess charges you accumulate under certain circumstances. The thing is that a customer is seldom fully aware of these circumstances due to the complicated fine print or simply his own carelessness and indifference.
You usually end up with distressing credit card advance fees and interest rate when you fund a new online bank account with a credit card. Yes, it is another important convenience a cardholder can take advantage of today, but you should never forget that any convenience and privilege will have to be paid for in this way or another.
In case you fund a new account with a credit card, your credit company will charge you for making the transaction as if you were making a cash advance on your credit card. So what do you get? - An interest rate much higher than that on purchases accompanied with a cash advance fee.
Is the convenience worth it? According to a recent poll among those aware of the price, they opt for funding a new account with their existing already bank accounts or with cash available.
A credit company will hardly focus your attention on such a point of a credit card agreement as funding other accounts with credit cards, so be aware of such a peculiarity.
Then, what are the other credit card transactions which are considered as cash advances? Remember, when you get involved with online casino and other gaming sites, it will entail certain financial losses. Apart from the bet you can lose, all of your transactions will qualify as cash advances and you will be charged correspondingly. It is not difficult to guess how much.
A creditor runs a big risk allowing you to fund credit card gambling, so they see a point in raising the interest rate and fees to compensate for the risk. If you want to avoid double loss of money, fund your gaming accounts with a bank account.
Now, it is the Paypal funding that puts you at risk of carrying hefty cash advances fees and rates. This innocuous-looking paying system Paypal may present a financial threat to your budget if you try to make a direct funding with your plastic. The good thing is that most credit companies will allow you to make Paypal purchases without imposing cash advance fees, so make sure you resort to your existing bank account for making a direct funding of the Paypal account.
Now, what about using your credit card for overdrafts protection? Imagine that you overspent on your checking account and your checking account balance goes below zero. If you have your checking account and a credit card with the same creditor, you have the option of using your plastic to backstop the checking account.
But the transaction of covering the overdraft is considered by many as cash advance, so the corresponding rate and fees are applied. However, it is much cheaper than if you did an overdraft which entails fees up to $35 for each transaction.
It appears, in case of overdraft, using a credit card is not the worst option, but you should not be surprised when the statement comes in - you will be charged cash advance fees and rates.
So, these are about all instances of credit card transactions when a customer may be charged cash advance fees. Stay tuned and you will not allow unexpected charges to cut the ground from under your feet.
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you really explained to me what cash advance is
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