If you own a credit card, it is likely that you receive offers now and then to utilize a cash advance. Most credit card companies will permit their cardholding customers to withdraw cash, up to a certain amount, from an ATM or at a bank. Before you consider taking a cash advance on your credit card, you might want to consider some other options. While a typical purchase with your credit card might be subject to a 20 percent interest rate, cash advances are charged at much higher rates. Usually, they are around 30 percent.
Cash Advance Example
Let’s say you need $1,000 to pay your rent and make your car payment. You have a credit card that you can use for a $1,000 cash advance. You will pay a fee right off the top to access the money. Typical cash advance fees are 2% to 5%. If you take out $1,000 and the charge is 4%, you will pay $40 just to get access to the money. If you use an ATM to access the money, you may also encounter ATM fees.
Unlike credit card purchases, a cash advance begins accruing interest immediately. There is no grace period. Interest rates on cash advances are usually closer to 30 percent, which is pretty steep. If you can only afford to pay $50 a month on the cash advance, you will likely repay somewhere around $1,500 over two to three years just to gain access to that $1,000.
If you own a vehicle that is paid for or nearly paid for, you can take out a car title loan. Embassy Loans has helped numerous customers obtain access to emergency funds. Car title loans are usually for smaller amounts of money. You can gain access to $1,000 by filling out an application, submitting a few pieces of documentation, and having your car or truck appraised. You can complete the entire process in a day or two, and you will have access to your money. Embassy Loans offers customers low interest rates and customized loan terms. It’s possible to repay most loans in 12 to 14 months, and borrowers are not subjected to credit checks either. Since Embassy Loans does not have to examine a borrower’s credit history, the loan process takes much less time. When it’s all said and done, borrowers gain quick access to their money and pay much less in fees and interest when using a car title loan.