A credit card can not only be used to carry out cashless transactions. It also has a feature where the cardholder can withdraw cash using it. This transaction is called the credit card cash advance. Most people opt for this transaction if they do not have enough cash on hand and make purchases to businesses that only accept cash for payments.
When you perform a credit cash advance, the cash dispensed from the machine will be against your credit limit and not from your bank account, which means you will need to pay for the amount you withdraw plus the interest rate. Despite this, many people are still using this method to aid their needs such as additional cash for car purchases.
However, a credit card advance is more favorable than acquiring a loan, which is why before taking out a loan, you may want to consider a credit card advance in buying some stuff or adding to your car purchase down payment. Here are the top benefits that you can get from acquiring a credit card cash advance for getting a car.
Fast And Convenient
Compared to applying for a new loan, a credit card advance is faster and more convenient. With a loan, you will have to fill out a form, acquire the lender’s requirements and submit it to them, sign a contract and wait until the lender approves your application.
Although it usually takes less than 24 hours before you get the approval and funding if you choose to acquire a loan from online lenders, credit card cash advance is still much faster and convenient. You will only have to go to an ATM nearest your location and use it as a debit card. In less than 5 minutes, you can have the amount you need from a reliable lender like Credit Ninja and take that car home with you.
Good For Borrowing Small Amounts
If you only need a small amount of money to add on your cash on hand so that you can pay for the car, the credit card cash advance is the best option as loans have a minimum required amount for any loan you acquire. Most lenders have around $3000 minimum loan amount and if you do not need that much, then opt for a credit card cash advance instead of a personal loan.
Additionally, you wouldn’t want to pay the interest of that amount of money that you do not necessarily need. Having that much money on hand will also tempt you to use it on unnecessary things.
No Credit Checks
Lenders will perform a credit check each time you acquire a loan, and each hard inquiry a lender makes in your credit history will decrease your score by five points. On the other hand, a credit card cash advance will let you acquire the money you need without performing any checks on your credit records.
If you have a critical credit score, a five-point decrease can result in lowering your credit ranking from good to fair. Even though five points might seem like a small number, that small number can already make or break your credit score.
Which is why it is important that if you only need an additional cash to complete the amount for purchasing a car, it is best not to get a loan and opt for the credit card cash advance option. It will help you keep your credit report safe while getting the amount that you need.
You Do Not Have To Worry About Your Credit Score
A borrower should have at least a 610 credit score to acquire a good deal of personal loan. Lower than that is already considered a fair credit rank, which will barely get approved in most lending companies.
If you do not want your credit score to get in the way or get affected with just a little amount you needed, a credit card cash advance would be the best option for you. Just make sure that you pay it on time.
No Approval Process
A credit card cash advance is a sure way to acquire extra cash. You will not go through strict assessment and wait for approval before getting hold of the cash. When you apply for a loan of any kind, there is no guarantee that you can be approved and get the money you need.
In a credit card cash advance, you will not have to worry about being declined by the lender, and you can ensure that you can get what you need and pay for the car or other stuff that you want to get at the end of the day purchase.
How To Use Credit Card Cash Advance Properly
If you are planning to acquire a credit card cash advance, here are some things you should know to enjoy lower costs and avoid the risk of getting into debt.
- Read your credit card’s agreement to know the terms and how much you will need to pay when you carry out a cash advance.
- Only borrow a small amount of money so that you will also need to pay a smaller cash advance fee.
- Pay as fast as you can. By doing so, you will ensure that you avoid paying the cash advance’s monthly payment cost.
- Get a cash advance on a credit card with zero balance.
- Avoid purchases using the card with a cash advance until you have repaid it.
By following these suggestions, you can lessen the fees you will need to pay for your credit card cash advance. You will have to be smart to get the best out of a credit card cash advance.
However, a credit card cash advance is only an available option for individuals with an existing credit card account.
The amount you can acquire through this option will be based on your credit limit. If you have a big credit limit, then it is possible that you can pay your car’s down payment using only the money from the cash advance. But if your credit limit is low, you should have other options considered.
There are times that you will need extra cash on hand, and these situations can sometimes be unpredictable. But if you have an existing credit card, a cash advance can be the best way to get the additional money you need quickly, without going through strict processes and inconvenience.