The holiday season is already upon us! We as consumers are left making difficult choices in how we choose to spend our hard earned money. When making decisions always way the pro�s and con�s before deciding to go ahead. Taking a cash advance on your credit card is an easy solution that can later have drastic consequences if not fully thought out. Here are just a few things to keep in mind when making the decision to take that advance.
The Pro�s in Cash advances off your Credit Card
� Cash advances enable you to obtain the cash you desire at your convenience. It�s a very easy solution and you can use it as you see fit.
� Cash is usually untraceable so that there isn�t any paper trail tying you to where and what you spent it on. For example if you are purchasing something for your significant other (a gift for the holidays but don�t want them to know about it?) cash is a great idea.
� Some retailers will give you a better deal if they receive cash since they don�t have to pay for the transaction fee on their end. Saving the retailer up to 3.5% by using cash plays a big part in negotiating a better price. Often we forget retailers are also charged by the credit card companies when we use our cards at their locations.
� If you are in another Country and you need local currency (regardless of the interest that may start immediately,) you will most often receive a fair exchange rate. Know your exchange rate and interest before making that trip.
The Con�s in taking the Cash Advance
� Most often interest starts as soon as you take the advance out on your card.
� There may also be additional fee�s associated from the bank machine you withdraw from on top of the interest that starts immediately.
� If you have not found out your daily limit you could be in for a rude awakening and not be able to take out as much as you need, due to daily limits set up you were not aware of. These limits are usually for your protection incase you loose your card or are robbed.
� Banks are notorious for upping your card limit with out you knowing. Know your balance before you make the choice so that you are not left stranded thinking you have availability left on your card.
� Understand that the Banks will apply any payments you make to the older debt and not to your advance regardless if your old debt is with in the interest free grace period.
Other Options to Consider Instead of a Cash Advance
A short-term personal loan from the Bank or other third party lending institutions may give you a better rate instead of your Credit Card Company. You may also be able to negotiate payment terms that won�t look bad on your credit history if you can�t pay back the full cash advance.
The Bottom Line
Do your homework. Call your credit card company and fully understand all the variables. Don�t be embarrassed to ask about every possible scenario.
Questions you may consider asking: What is my interest rate? Will it start as soon as I take the advance? What is my daily cash advance limit? What additional fees could be applied, if so under what circumstances? What is compound interest? Will my monthly payment change?
Armed with knowledge you will make an informed decision and understand all of the Pro�s and Con�s in taking that advance or in choosing to go to a third party lender. For more valuable information contact Prudent Financial Services www.prudentfinancial.net