Why Arizona Consumers Should Avoid Cash Advances on Credit Cards

Cash advances on credit cards don’t work like normal purchases. These transactions come with different rules and interest rates, and they get expensive quickly. Relying on credit card cash advances to cover expenses is a bad habit. It can easily lead to heavy fees, very high balances, and lower credit scores. Why Credit Card Cash Advances Cost Arizonians too Much Money Unless you read the fine print on your user agreements, you may think that using your credit card to get cash is the same as swiping it to buy shoes. Chances are, it isn’t. Most credit card issuers charge higher interest rates for cash advances. Also, these interest rates kick in immediately, with no grace period granted. On average, interest rates on credit card cash advances are around 23.68%, even for cardholders with good credit. Also, borrowing cash on your credit card normally comes with a fee. Most Minnesotans are charged $10 or five percent of the cash amount borrowed. Unfortunately, borrowers pay the more expensive of the two. For example, if you only need $40, you’ll pay the $10 fee. However, you if need a $600 cash advance, you’ll owe the issuer $630. When you add possible ATM fees into the equation, credit card cash advances don’t make much sense financially. This is especially true for Minnesota consumers who routinely use them. Depending on your needs, you may consider taking out a small personal loan or borrowing money from a family member as better options. Ideally, though, you should limit your spending and fit your expenses to your income. Treating your savings as a necessary expense is...