Though the cash advance facility offered by credit card companies is a convenient way of getting immediate cash at times of financial crisis, it should be avoided as far as possible. The consumers should realize that cash advances are accompanied by high rate of interest and fees. In addition, there are no grace periods provided for cash advances. Moreover, for consumers who seek debt relief, cash advance could add fuel to the fire. It would be better to be aware of the following points before going ahead for a cash advance through your credit card.
Though the fees for cash advance could vary, it is generally high. Two methods of calculations are used for deciding the fee amount. Mostly it is calculated on a percentage basis, say 1% to 4%. Other card issuers directly ask for flat fees for their cash advances and it is generally constant not based on the amount of advance. Another common trend is to combine both methods of calculation. This is sure to result in higher fees. For example, an issuer could charge x% for cash advance, but charges a minimum $10 irrespective of the amount of advance taken. Another case could be an issuer who charges x% or $20 whichever is...
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