Finance > Credit > Shop Around, Save Money On Credit Cards
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Article rating : 0.00, 0 votes. Author : Keith Davies
Some credit cards offer a cash advance option. But how good a deal is this?
Not very. In fact, it can be downright expensive.
Why?
Because every time you use your credit card to withdraw case, more fees kick in:
* Cash advances can carry an upfront fee of 2 percent to 4 percent of the amount advanced.
* The advances have a higher interest rate than regular card charges.
* Interest charges begin to mount as soon as the money comes out of the ATM.
* Many issuers also require you to pay down the balances for purchases before you pay down the higher-interest cash advance balance.
Here's an example of how these fees kick in:
Assume you bought a television for $500 on your credit card and then took out $50 in cash. Even though you pay the $50 back the next day, you still lose your interest-free period because the credit provider deems you pay the cash back last.
As a result you will still owe the $50, but you will now only owe $450 on the $500 worth of purchases.
You'll continue to forfeit your interest-free period up until you have completely paid back the full $550. Any future purchases will still be ahead of the $50 in the payback line.
The lesson is simple: Avoid using your credit card to withdraw cash wherever possible. You'll save money as a result!
Shop around the amount of Credit Card offers is now staggering. If you are prepared to shop around your next Credit Card could save you money.
Keith Davies of http://www.searchforcredit.co.uk is always on the look out to save people money. Loans, Credit Cards, Mortgages we have all the latest deals.
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