It is sometimes said that there is never a 'cop' around when you need one; the same can also be said of money. For this reason, there is an industry devoted to giving cash advances to people in need, and credit card companies are a principal player in this crowd. However, there is no such thing as free money; you must be able to repay a cash advance at the risk of digging a deep hole of debt for yourself! Read on to learn about how to handle credit card cash advances.
An advance is an up front payment to a person who needs money to cover immediate needs, to be paid off later. One simple means of getting quick cash is to ask your employer for an advance on your next paycheck (if you can accept having that amount deducted from said paycheck); selling or pawning some item of value remains popular also. On the other hand, simply sliding your credit card into an ATM (devices which seem to outnumber street corners in many cities) and entering your PIN number is a quick and easy way of getting instant cash.
As with most ways of getting money in a hurry, credit card advances come with drawbacks. Among these are the facts that you usually have to pay a cash advance fee (you will notice when you go to the ATM that you are warned "You will be charged $X.XX for this service," or something to that effect, and asked to press "OK" to accept the charge) and that interest is often charged on advances from the date they are issued rather than from the end of the billing cycle.
If you need larger amounts of cash than are practical to get from an ATM, you can also get a cash advance check from a credit card company. This sort of cash advance can also be used to make payments to payees who do not accept credit cards in the conventional manner, such as landlords or utility companies (colleges are increasingly accepting credit cards for tuition - check with your college to find out its policy). However, you should consider other methods of paying debts such as these, as you may find that other methods may cost you less down the road in cash advance fees and finance charges.
Cash advances from a credit card company come with different terms and conditions depending on the company in question, the cardholder's record with the credit card company, etc. The terms that are associated with your account can be found on the back of your monthly statements. If you find that you are offered very favorable terms, then this just might be a good option for you; the key as always is to "look before you leap." I recommend you look very hard.
Since balance transfers usually come with lower rates than cash advances, it may be useful to immediately transfer the balance to a card with a low balance transfer rate if you get a cash advance from a card with high cash advance rates. As always, you should check the policies of the cards in questions to determine what fees and conditions are associated with balance transfers; sometimes your credit card company will categorize a balance transfer as an advance.
While cash advances can be used to fund investments, this is rarely a good idea, because it would have to be an incredible, "too good to be true" investment for you to be able to pay off both the exorbitant credit card interest fees and the taxes you will owe on the earnings.
A cash advance can sometimes be a lifesaver when you are in urgent need of money. Among the many options available, there are credit card companies are quite willing to offer money whenever you need it -- but for a price. Understanding the price you pay is always critical to making canny financial choices; the information provided here is meant to help you understand that price just a bit more.