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Credit card advances is a feature offered to credit card holders to provide them with necessary credit in cash, in times of dire emergencies. |
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| Author: Dianas |
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The fees charged for cash advance vary from provider to provider. A cash advance fee can be calculated on percentage basis and have as much as 2% to 4% of the amount as an advance. Another method is for card providers to charge a flat rate for this service. Thus, it is in the best interests of the customer to pay off their credit card advances as soon as possible. Though credit card advance fees are not hidden fees they are often overlooked by unsuspecting customers who often draw cash without realizing they can’t afford it. When in dire need of a credit card advance a customer should try to avoid ATM machines. This is because ATMs levy an additional fee for such advances.
The interest rates charged for a cash credit card advance is higher than regular card charges. Interest rates for credit card advances are several points higher than normal interest rates. While cash advance rates can range from 20% to 25% a standard credit card purchase has an interest rate of 15% to 17%.
Credit card customers should realize that a credit card advance carries no grace period and interest rates are compounded as soon as the ATM delivers cash. Another pitfall of credit card advances is the manner in which payments are applied to your account. Whenever a deposit is made into a credit card account, Credit card companies usually payoff purchases made on the card first and only then payoff the cash advances. This means that customers with huge existing balances on their card end up paying higher financial charges and interest rates.
Credit card checks are another form of credit card advance. These instruments are touted by credit card companies as an ideal way to pay off bills. Customers often fail to realize that a credit card check bears a higher interest rate than a normal bankers check.
About Author
Diana is a financial consultant who manages portfolios of Business Credit Card Advance. Her key areas are trading in stocks, working capital loans, low-cost funding solution etc.
Article Source:
http://www.1888articles.com/author-dianas-7260.html
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