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Cash advances are simply industry speak for withdrawing cash directly from your credit card, either to your bank account or from a cash machine. However, both alternatives - credit card checks and cash advances should only be used as a last resort. The reasons are many and it's not feasible to delve into all the details here but I have outlined a few of the most compelling reasons below.
Much Higher Interest
Most credit cards will charge you a much higher interest rate on the money you borrow (the credit they extend you) when you utilize either the credit card check or cash advance options. Not only is the interest much higher but it starts to accrue or be charged against from day one. In other words, you often give up any interest-free period (which can be up to two months), meaning that you start paying interest on the money literally from the minute you spend the money. In addition, most cards will also charge a fee each time you use cash advances or credit card check and using an ATM may increase the fee even further.
Signals A Need
When selecting either option you are shouting to all - especially the issuing credit card company that you are no longer using your credit card for convenience but that you are using the credit card checks or the cash advance out of necessity. This sends a clear signal to them that you there's really no reason to give their best deal or even a good deal but that they can give you their worst deal because let's fact itÂ… the likelihood of you going anywhere in the near future is nil.
Personal Checks This article provides useful, detailed information about Personal Checks.
Personal checks are customized bank checks. Generally people with an aesthetic sense or those with a thing for colors, designs and style go for such checks. Modern day checks are both timeless and compelling, coming in a myriad shades. They are printed on recycled paper with non-toxic inks. Latest designs of such personalized checks benefit important causes. Personal checks are easy to order and resemble normal bank checks in size. Apart from the standard shape, they are available in exclusive designs and there ar ..
A Simple Idea
Rather than using cash to pay for small things and finding you have to take advances or use the credit card checks to pay for bigger purchases, it's better to do it the other way around. If you're in a situation where you're relying on advances, you should start using your credit card to pay for all of your everyday smaller purchases like groceries and gas and then you'll be in position at the end of each month to put that money to pay off the larger purchases and be in a better position not to have to use cash advances and the checks in the first place. Try being more strategic in how you spend.
Remember that there are very few bills now that must be paid for by credit card check, so there are few reasons to ever use them and if you're willing to call them up and wait in their queue for a while, chances are that you can get them to accept a credit card payment just by having the clerk read them number.
Beware of Cash Advance Limits
If you find yourself relying on cash advances, sooner or later you'll probably run into a cash advance limit. The credit card companies don't advertise it, but many of them have limits on how much of your balance can be cash advances and how much must be in purchases. Try to find out these limits before you start taking advances because if you go over your preassigned limits then you'll incur fees and penalties and loan shark type interest rates.
Personal Checks and Saving MoneyWhen you write a personal check you re essentially an order instructing your bank to pay a particular merchant a specified sum of money, using funds in your account at that bank. To collect the money, the merchant probably will deposit the check. ItÂ’ll take about one to five business days before the money is transferred out of your account. However, there are new ways for merchants and other vendors to process personal checks electronically and reduce the time it takes for the funds to be deducted from your account. Personal checks are familiar and easy to use or mail. They also are routinely a ..
You Always Pay the Balances With the Highest Rate Last
As you pay back your credit card balances, most lenders will put your payments towards the lowest-interest money (your purchases) first and then towards other lending. Clearly, this means that you keep paying the highest possible interest until you get your balance paid in full.
The bottom line is this: Credit cards are a convenient source of purchasing power and if used properly they represent a wise use of credit. On the other hand, don't use the credit card check or cash advance option unless you have too because these options represent how not to use credit wisely. They are simply a cleverly disguised marketing shell game used by the credit card companies to extract additional fees and interest.
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About the Author: Kevin Erickson is an entrepreneur and writer. For other articles he's written visit: Credit Card Debt | Debt Management Programs | Bad Credit Debt Consolidation
Source: http://www.isnare.com Kevin EricksonCash Advances And Credit Card Checks - A Closer Look
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