How To Save Money On Credit Cards
Some credit cards offer a cash advance option. But how good a deal is this?
Not very. In fact, it can be downright expensive.
Why?
Because every time you use your credit card to withdraw case, more fees kick in:
- Cash advances can carry an upfront fee of 2 percent to 4 percent of the amount advanced.
- The advances have a higher interest rate than regular card charges.
- Interest charges begin to mount as soon as the money comes out of the ATM.
- Many issuers also require you to pay down the balances for purchases before you pay down the higher-interest cash advance balance.
Here's an example of how these fees kick in:
Assume you bought a television for $500 on your card and then took out $50 in cash. Even though you pay the $50 back the next day, you still lose your interest-free period because the credit provider deems you pay the cash back last.
As a result you will still owe the $50, but you will now only owe $450 on the $500 worth of purchases.
You'll continue to forfeit your interest-free period up until you have completely paid back the full $550. Any future purchases will still be ahead of the $50 in the payback line.
The lesson is simple: Avoid using your credit card to withdraw cash wherever possible. You'll save money as a result!
About The Author
Paul Davis is financial writer and contributor to http://debt-elimination-4u.com. Stop by and pick up your FREE guide on how to get out of debt now at: http://debt-elimination-4u.com/get-out-of-debt.htm
MORE RESOURCES:
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Dollar Rebounds From Record Versus Euro as Credit Turmoil Eases Bloomberg - The US currency also rose versus the yen on signs US investment banks will withstand credit-market losses and the Federal Reserve and the Treasury proposed ... |
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$10m W/Bank Credit: Boom time for small-scale mining The Punch, Nigeria - This was the scenario, which the World Bank set out to help Nigeria change in 2005 when it granted the country $120m credit under the Sustainable Management ... |
If high credit-card debt is dragging you down, it's time to start ... Boston Globe, United States - High credit-card debt is one of the biggest issues facing consumers, says Dara Duguay, director of Citigroup Inc.'s Office of Financial Education. ... |
Mortgage sales pressure fuelling credit crisis: ACTU ABC Online, Australia - The Australian Council of Trade Unions (ACTU) has accused banks of fuelling the credit crisis by forcing staff to push mortgages onto people who cannot ... Banks 'pushing' families into debt Banks lean on staff to push loans |
No deals for debits at the pump Detroit Free Press, United States - I would have paid the same price if I used a credit card. Bring the Benjamins and you'd get that super-low price -- OK, low by today's standards -- of ... Gas stations turning to using 'gift |
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