Cashing in on debt
Borrowing cash from your card is not a wise move as any free Debt advice company will tell you.
Withdrawing cash from your credit card is a very handy option as it allows you to receive an advance on your wages before they are due. However, there are several reasons for avoiding cash advances from your card.
One of the main reasons is the fact that exceptionally high fees are added to your account and large interest rates are charged for the amount borrowed. It is very easy to withdraw cash from your card, but the charges incurred are high.
Each creditor charges different fees for cash advances and it is virtually impossible to find any creditor who will offer low rates on cash purchases. There are two ways that a cash advance can be calculated, one is a flat fee and the other is a percentage basis.
The percentage basis is the most preferred method of calculation for a credit card company as every time you withdraw cash from your card, you are charged a percentage of the amount borrowed, which can vary from one percent to four percent. Therefore, if you borrowed £400 from your credit card, you could expect to be charged up to £16 in fees.
The more you borrow, the more repayment in fees so only borrow as little as possible. Better still, try not to withdraw cash from your credit card at all
In effect, borrowing cash from your card should only be used for emergency purposes and, as a last resort when no other means of cash is available.
Debt Advice News posted on 31/05/2007 07:04:44
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