From a personal perspective, I do not support taking cash out through your credit card, also known as cash advance. Not only do cash advances have a ridiculously high APR, it a step backwards in helping yourself out of a credit card debt. There are many other options and choices available that are less costly. Although I believe such loans should never be taken out, I suppose there are a few occasions where a cash advance loan might be necessary and helpful.
1. Pay Bills – Bills exceeded unexpectedly this past month and need a cash loan fast to pay the bills. But the next paycheck will arrive shortly and is enough to pay off the loan to minimize fees in interests.
2. Family Emergency – You’re strapped for cash yourself, so you opt for a good payday loan site to help them out.
3. Cash Only Purchases – You find yourself at a flea market or a garage sale and find something good you like to purchase. The seller only takes cash so you take a small cash advance to pay for your item.
4. Car Broke Down – It’s your unlucky day and your car breaks down in the middle of a highway. You recently changed your insurance policy to save a little money and now don’t have towing coverage. The tow truck driver only takes cash so you take out a cash advance loan to pay him off.
Although I am not a supporter of cash advance loans and would never take one out, I guess there are always exceptions to the rule. Remember, if you find yourself in one of the above situations, be smart about how to take cash out. The more cash you take out, the harder it will be to pay back, resulting in high interest fees. Try to think of other ways to get yourself out of these situations without taking a cash advance loan. These loans should be a last resort, bailout, money. Whatever you do, don’t put yourself in a situation with cash advance loan debt for extended period of time.
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{ 3 comments… read them below or add one }
With the amount of interest % cash advances charge, its so foolish to take them out… because if you need it once, likley, you’ll need it again to try to get ahead. Its a bad cycle to be in the middle of, and should only be a last resort in my opinion.
twentysomethingmoney recently posted..My 5 Year Goals
twentysomething, i completely agree with you. cash advances should be the absolute last resort solution to help you. But even then, there are still a lot of risks involved and can be dangerous if you’re not careful.
Charles recently posted..Tax Filing Delayed For Most Of Us
After I was furloughed from my airline job in Las Vegas for over a year, I was called back to another airport (PHX) where I had to do three weeks of retraining. Since I officially transferred to the new location, I was responsible for lodging and food expenses. I now commute between the two cities but luckily I have a quite flexible schedule.
I exhausted most of my savings during the lengthy layoff so I broke down and got a payday type loan at 196% interest (that is NOT a typo!). After working for a few months I was approved for a credit card at (9.9%) so I used a cash advance on the card to pay off the loan sharky original loan. I think that that was a good move and I will pay back on the card ASAP. I still advise anyone out there to NEVER get a payday loan even as a final resort.
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