Cash Advance for Paying Loans?
I was wondering if anyone used the cash advance feature on their credit card? I only use my credit card for in store purchases, but a friend of mine mentioned something about using her credit card to pay all of her bills including her rent. She simply gets a cash advance against the card, pays her rent and then in a day or two when she gets paid, she puts the money back on her card.
I was wondering if it would be worth it to do the same for my personal loans. I don’t have huge monthly payments, but some months I am a bit tight when it comes to money and find that I am scrambling to make the payments on time. So would it be worth while paying my loans with the credit card?
I was also wondering if it would help my credit rating any. I’ve looked into it, and I think that it would be beneficial to use my card to pay my monthly loan payments as long as I make sure that I make at least the minimum monthly payments on the card. Does anyone else do this? If so, how is it working?
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6 Responses to “Cash Advance for Paying Loans?”
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I got burned really badly by cash advances; I didn’t realize just how bad the interest rates are and how much you end up paying for that quick fix of cash. Earn it the old fashioned way!
The only way it will help your credit rating is if you put it on and pay it ALL OFF, everything on your card, down to a zero balance before your interest goes through. Then it is possible that it could positively impact you.
That sounds like a great plan to me. What are the downsides of it? I think credit cards are meant to carry you through the monthly cash crunch, aren’t they? Excellent idea!
NO! NO!! I cannot warn against that enough; cash advances are usually anywhere from 2x to 4x the interest rate of your regular purchases interest rate, and they are the very last thing to be paid off. You will quickly be in over your head.
That’s not a good idea. If you don’t have the money to pay your bills, reduce your bills. Don’t over extend yourself again and again to make your payments. Maybe you need to downsize your life.
Your friend is not smart because on a typical card, if say your rate for purchases is 12.99%, your cash advance is about 27%. And you pay off cheaper rates first, so you have to pay off EVERYTHING to get to that cash advance. Think twice before doing that!