Credit Card companies structure their credit cards to provide the best advantage to them, especially when it comes to credit card cash advance opportunities. Depending on your credit card it can seem like a punishment to use the cash advance option due to the high fees, increased interest rates, and how your monthly payment is allotted. Luckily, recent regulations are making a few things better in regards to credit cards. Many credit card companies have been told that the higher interest rate balance must be paid off first rather than last. Yet, this is only a small consolidation when it comes to the whole idea of credit card cash advances. There are three things we will discuss below regarding these products.

Credit card cash advances will have fees. The fee is either $5 or 3 to 5 percent of the cash advance. The only time you are charged $5 is when the cash advance is so small it cannot warrant more than a $5 fee. The typical cash advance card will only charge 3 percent on the transaction; however, there are companies that will try to get 5 percent so be wary of the transaction fees and how much it will truly be.

The second aspect of the cash advance is the interest rate. Credit cards will vary in how the interest is structured. Some credit cards will have the interest rate at the same annual percentage as your purchases. For example, if you are charged 23 percent for your purchases there is a good chance the cash advance APR will be the same or similar. Credit cards with a really good purchase rate on the other hand have been known to hike up the cash advance APR. In this instance you might be charged 7.99 percent for purchases, but have cash advance APR of 25 percent.

We have mentioned the payments in the introduction paragraph, but a little more is needed on the topic. The payment structure has not changed for all credit cards because it is dependent on where the company has originated. Some credit cards with cash advance are still allotting your payment towards the lowest interest rate first. Double check with your credit card company before doing a credit card cash advance to see how your company works.

Based on the information shared above it is imperative that you use cash advances only for emergency purposes. A credit card cash advance should not be used for buying that pair of shoes you wanted or to go on vacation. Instead the cash advance should be used if you have no other alternative for a life threatening emergency. If you do have to use a credit card cash advance make sure you can pay it off immediately or as early as possible. Furthermore, make certain that once you have sent the payment it has gone to the cash advance balance and interest on that money and not somewhere else. The high fees and higher interest rates can cause trouble with debt if you do not take care when using this option.

Author Bio: To learn more about the author and to compare the best credit card offers for cash advances, please visit www.smartcreditchoices.com.

Category: Finances
Keywords: credit, cash advance, credit cards, cash advance credit cards, interest rates, money, finance