3 On Your Side: Cash Advances Loaded With Surprising Fees
By Jim Donovan
PHILADELPHIA (CBS) – Need to get your hands on some money in a hurry? You may want to think twice about getting a cash advance using your credit card. As 3 On Your Side Consumer Reporter Jim Donovan explains, it often costs more than you might expect.
They're cheaper than a Payday loan, more convenient than a personal loan, and can even be less expensive than over-drafting your checking account. But if the thought of taking a cash advance from your credit card seems like a good idea when you're in a pinch, a new survey by Creditcards.com finds it can cost you big bucks.
Matt Schultz of Creditcards.com says, "The longer you go without paying these off, the more interest you accrue." The average cash advance APR is 24%, much higher than the average purchase APR of 15% and as Shultz points out, "You're charged interest immediately when you make these cash advance purchases as opposed to your regular credit card purchase."
Take a typical $1,000 cash advance for example, it will cost you a $50 transaction fee and $19 interest even if you pay in full within 30 days. That adds up to $69 out of your pocket and if it takes you a year to pay that thousand dollars back, you're up to over $185 in charges and fees.
Of the cards surveyed by Creditcards.com, 98 of 100 charge a cash advance fee. It's normally 5% of each cash advance or $10, whichever is greater.
For more information visit:
http://www.creditcards.com/credit-card-news/cash-advance-survey.php
