How to Avoid Cash Advance Fees

Avoid costly cash advance fees

A cash advance is a charge or fee added to a credit card holder's account when one takes a cash advance from an ATM. For example, anytime money is withdrawn from an ATM, it is considered a cash advance and a fee is charged. In many cases, a two to four percent charge is applied to your account when a cash advance is taken. Some companies also require both a percentage and flat fee. In order to avoid expensive cash advance fees, consumers should learn company policies regarding cash advances.

Instructions

1. Borrow only rhe least necessary amount. Formulate a budget to handle unfortunate circumstances. If you have to take a cash advance, employ a financial strategy that will help you gradually repay the amount. For example, rearrange your budget to include an emergency fund. Ask family and friends to borrow money in order to avoid interest rate fees.

2. Pay your debts off on time. It is important to avoid high penalties for late payments. Commit to paying off cash advances early. Contact the lender to set up a payment schedule or plan. You will end up paying additional interest but not late fees. The high interest rate on your cash advance should be your highest priority because of the high interest rate and applicable fees.

3. Secure a revolving line of credit which allows the borrower to use it whenever it is needed. It does not have a fixed payment schedule. They also keep low to no balance when the credit is not in use. In addition, the interest rates for cash advances are low.

References

• "Bank of America": The costs of cash advances on your credit card
• "FinWeb": Avoiding expensive cash advance fees