Credit Card Cash Advance - Cash Now - Credit Card Payment Later

A credit card cash advance seems like a reasonable answer to fast cash (cash now), but the truth is -- it may not be everything it's cracked up to be. Then again, it could be more then what you bargain for ...

Let say, John Doe maintains a small balance on his credit card and he pays off the balance every month. One day John faces a financial emergency and needs "cash now". John does not have an emergency fund. John decides to go the ATM and withdraw money from his credit card. Withdrawing money from your credit cad is called a "credit card cash advance". John knows that this may be an extensive way to borrow money. However, he is confident his credit card monthly payments will keep the problem under control. John is wrong and his wallet is going to pay the price.

What John doesn't know is just how expensive a credit card cash advance can be. Credit card cash advances usually come with a higher interest rate than your normal credit card purchase interest rate. Normal credit card interest rates fall between 12% to 14% APR. However, a credit card cash advance can be as high as 25%. Other important factors to consider are -- a credit card cash advance rarely includes a grace period, interest is occurred immediately, and some credit card companies charge an upfront fee for the cash now service.

Instead of suffering months of high interest rate payments reconsider the cash now - credit card cash advance option. If John Doe had an emergency fund he would not have to suffer high credit card monthly repayments.

Take the 8 month challenge and create an emergency fund. Setting up an emergency fund does not have to be painful, and in the long run it could save you big bucks.