Q&A: What is Cash Advance Interest on Credit Card?
Question by : What is Cash Advance Interest on Credit Card?
Just noticed I’m paying Cash advance interest on my credit card at 16.99%.
What am I paying for exactly?
Would I be able to call my bank and get that off my credit card or is it something I’m stuck paying because I have a credit card?? thanks
I don’t use my card anymore, just trying to pay it off quickly.
Best answer:
Answer by Angry Bird
Cash Advance interest is always high than regular interest.
Plus there are flat fees, and no grace period.
Your only option is not to use the card until you can pay all this off.
Once you do this, use your card to build up good credit.
Use it for something you need like gas, and pay the amount in full each month.
This avoids interest and develops amazing credit (with time).
Never dare carry balances again. It can cause serious damage to credit scores.
Add your own answer in the comments!
There are a lot of reasons why you need to know how cash advance rates work before you are going to submit a credit card application. Here are some of the reasons:
1. A cash advance rate applies not only to ATM withdrawals. In general, you will be charged with cash advance rates when you are going to use your credit card for paying bills and purchasing traveler’s cheques.
2. Balance transfers might be affected by cash advance rates. Policies would usually vary from one credit card company to another. Some companies will charge you a cash advance rate if you are going to transfer your balances, those that are not paid during the introductory period (i.e. your existing credit card debt.)
3. There are no interest free days with cash advances. The 55 interest free days that are applicable to regular purchase rates are usually not applicable to cash advance rates. This simply means that a cash advance interest rate would immediately apply as soon as you have withdrawn cash.
You drew cash out on your card at some point.
Cash advances like that get charged interest at a special higher rate than interest charged on purchases and has no interest free period… you get charged interest from the day you borrow the cash.
The card company will pay it off as the last thing that gets paid off (they will pay off zero interest purchases first and low interest purchases second to get the maximum interest off you they can). So the only way you can stop them charging you the cash advance interest is to pay off everything.
You’re stuck paying it because you got a cash advance at some time in the past. The only way to get rid of it is to pay off the balance. The fact that you don’t use your card anymore doesn’t matter. You could even tell them to freeze the account so that you couldn’t use the card if you wanted to and that wouldn’t change anything.
If you ever took out a cash advance on your card, you pay back the advanced money at the higher rate. For normal charges you pay the regular interest rate.