Definition of Cash Advance
Cash advance is the option provided to credit card holders to borrow money against their balances on the credit card. Most credit card users these days have found this option a very useful one as it helps them with many cash transactions. By definition, cash advance is a loan taken on a credit card, for which there is no charge of interest so all the borrower would be charged is with financing charge from the day the cash is borrowed up to the day when the amount is repaid in full.
Although there is no fixed interest that is charged on these loans, cash advance is still an expensive option when compared to other types of debt finances. The credit card bills would have two statements that would be issued to the customer. The credit limit utilized and also the cash advance limit.
How to use Cash Advance?
To use the option of cash advance, you simply have to visit your nearest ATM and make use of your credit card. Most of the ATM machines have the option of providing customers using credit cards with an option of cash advance. Since there is a limit set on cash advance, you can make optimum use of it by withdrawing amount from the ATM machines.
This is especially useful when there is an important cash exchange that you have to make. Although most business have now begun making use of debit and credit cards as mode of payments, there are still some businesses left that do not have the facility. You can always make use of Cash Advance payment method to make payments for unexpected cash payments that you suddenly have.
The balance you withdraw against the credit card would be the excess amount that you would owe to the bank along with your credit card expenses. So, cash advance is usually a last resort you should have during any kind of emergency as it can be very expensive to you while making repayments, as the interest payments for your credit card use and also the other finance charges can make it more expensive.
Payday loan is one useful Cash advance option that you can make use of. The loan is taken against your pay check so there is basically not much to worry about when taking this kind of cash advance. Loan taken against the line of credit might be one option you might consider only in monetary emergencies, but it is best not to choose cash advance option as it can be a very expensive choice for you.