Cash Advance

The Cash advance industry has been studied by researchers interested in how short term loans affect the borrowers who make use of them. In this study, anyone who took out a cash advance ansered questions, and gave information regarding their personal finances and alternatives to a short term loan available to them. In the majority of cases, a cash advance turned out to be the more economical choice, given the more expensive alternatives. How can this be? Well, if you consider a $30 late charge on top of finance charges that can climb upwards of 20%, you're looking at hefty charges on a credit card bill that's not paid. Compared to this, an average of a $15 fee for $100 borrowed in a cash advance is more economical in the short term. And that's not even considering the damage done to your credit score every time you miss a payment on your bill.

A cash advance isn't even connected at all to your credit score, in fact. When you apply for a cash advance, the lenders do not contact any credit reporting agencies. They don't care about your credit score, you credit history, or anything like that. No credit reporting agency will ever know you applied for a cash advance. And that's good, because every time you apply for a traditional loan, it's recorded by the credit reporting agencies. That will lower your score, since the more debt you have, the less credit-worthy you become. After all, the more money you owe, the less able you are to pay back more loans on top of that. Therefore, lenders will be less able to give you a loan, or a mortgage, or a new credit card or whatever it is you're applying for. The good news is, your cash advance will not be recorded, so it will not affect your credit score.

If there's a way to avoid all this with your credit card company, then why not take advantage of it? Well, now you can and it's called a cash advance. Apply online and get an answer from your matched lenders, sometimes in hours.

Credit Reporting Agencies Will Never Know You Got a Cash Advance

It may seem strange to you at first to consider paying off a credit card bill with a cash advance. The APR of the credit card is lower than the APR of the cash advance, right? However, the credit card doesn't just charge interest. They also charge you a very heavy fee for a late payment on your bill. Late fees are usually anywhere from twenty five dollars and up. And that's no matter how much you owe. So, you could be paying $25 on a $100 bill, and then twenty percent finance charge on top of that. That really does not win out as more cost effective than a cash advance. Then you have to consider the fact that any time you are late in paying yoru credit card payment, the credit card company frowns heavily on this. They may raise your interest rate if they perceive you to be a high credit risk. That means next time you carry a balance, that one late payment in the past will still keep costing you money. And next time you can't make a payment and you call up the credit card company to negotiate the terms and try and get out of a late charge, they will not be so willing to let you go. Usually you can wriggle out of a late charge once with a credit card company, but the second time around it's going to take a lot of convincing. Don't bet on it!

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