December 6,2006
-
The Cash Advance Trap
So, you find yourself cash-strapped this holiday season. Join the club! But think before you reach for your credit card to withdraw a cash advance – think carefully. There is always a fee to withdraw cash from your plastic, and you may find that it's heftier than you'd anticipated.
On average, interest fees for cash advances average 21.1%, but may be as high as 37%! Put practically, that $100 you thought you really needed might end up costing you $137. Additionally, credit card companies try to outsmart those who pay off their entire balance faithfully each month by charging interest on cash advances immediately, rather than allowing you a grace period. Kind of puts a damper on the whole prospect, yes?
In short, avoiding cash advances all together might not be a bad way to go.