Some credit card account allow for the option of accessing cash from your account in addition to making purchases on credit by using your credit card. Usually the credit card company will handle cash advances in a different way than it handles purchases. If you believe you will be using the credit card for getting advances in cash from your account., you'll need to determine the credit card company's policy on access, the APR, fees, limits, and how payments will be credited to the outstanding balances on your credit card.
ACCESS
You can gain access to the cash on your account in one of two ways. Either you can use an automated teller machine (ATM) with your credit card and withdraw cash, or sometimes the credit card company will send you a form of paper check that you can fill in and cash in order to receive the cash advance. Most credit card companies provide access to the cash by way of the ATM.
APR
The annual percentage rate (APR) generally is higher for cash advances than it is for purchases on your account. This is why it's particularly important to know before selecting a card how you plan to use it. If you will often want to withdraw cash from the credit card account, you should look for a card that has a lower APR rate for cash advances. Alternatively, you can try to find a credit card company which provides a grace period on cash advances. There are a few of them out there, but you may have to give up some other feature.
FEES
In addition to charging for the interest on the amount of cash advanced to you, the credit card company may also assess a fee. This is another feature which you can note since a fee plus a higher interest rate charged can make a small cash advance very expensive, indeed.
LIMITS
There are some credit card companies that will place a limit on your cash advances with either a flat dollar amount such as saying you can't receive more than $200 in a single cash advance. Alternatively, the credit card company may limit you to $400 in a cash advance during a calendar week. A third alternative in setting limits is to place a ceiling of cash advance withdrawals at a percentage of your total credit limit. The cash advance limit might be 80% of your credit limit, for example.
CREDITING PAYMENTS
This stipulation states in what order payments to your account will be applied against the various balances. Most credit card companies apply the payment against the purchases balances first, then to other balances, such as the cash advance balance.
This allows the card company to receive the highest possible return on the money in your account. The order is critical to you, only if you have ignored its impact on the amount of money you owe. You should always select a card that will allow you to pay the least amount of money for debt service.
Gus Taperman holds a Bachelor's degree in Commerce and completed his master's in Business Administration . He is working as writer and financial consultant to find a Personal loans, Debt consolidation, home equity loans at cheap rates visit www.taperman.com