Credit card issuers offer cash advances a way to tap into your available credit for money you can spend for in-person transactions. Even though it sounds like a convenient way to get access to cash, taking out a cash advance on your credit card is risky, expensive, and carries the potential for debt if you don’t quickly repay the advance amount. Knowing that before you swipe your credit card at the ATM may help you make better decisions about the way you use a credit card cash advance – if you use one at all.
Costs of a Cash Advance
Unlike purchase transactions, cash advances aren’t free. A cash advance comes with an additional cash advance fee that posts to your account the day you complete the transaction. Cash advance fees differ among credit card issuers but are typically around 5% of the advance with a minimum of $10 on cards from major credit card issuers.
The fee isn’t the only cost of taking out a cash advance on your credit card. Cash advances have higher interest rates than regular purchases and even balance transfers. And since most credit cards don’t provide a grace period for cash advances, interest starts accruing as soon as you take the cash from the ATM.
If you use an ATM that’s not in your credit card issuer’s network, you may pay an additional ATM charge on top of the cash advance fee.
Those costs can make cash advances extremely expensive. Even so, cash advances can be less expensive than some alternatives, like payday loans. Managing cash advances fee is key if you’re in a situation with no other options.
Smart Ways to Handle a Cash Advance
While credit card cash advances are generally a bad idea, there may be a time that you need access to cash and have no better options. If you must take a cash advance on your credit card, follow these tips to lower the cost and risk of getting into debt.
Read your credit card agreement to understand the terms and fees. You need to know the one-time cash advance fee you’ll pay and the APR that will be applied to your cash advance balance. If you don’t understand something, call a customer service representative and ask.
Use a cash advance for true emergencies that you can’t pay for with your credit card. Avoid taking out a cash advance to pay for ordinary everyday items like groceries and gas. Make a goal to build an emergency fund so you don’t have to rely on a cash advance in the future.
Know your cash advance limit; it’s probably less than your credit limit. You can check your limit on your online credit card account or by calling the automated customer service number on the back of your credit card. Exceeding your cash advance limit can result in over the limit charges and higher interest rates.
Take out only what you need, nothing more. Avoid the temptation to withdraw just a little more so you have some extra money. Remember, you’re paying a fee based on the amount of the advance. That little extra will only make it harder to repay the advance. But, try to take out just one cash advance large enough to cover your expense to avoid another cash advance and ATM fee.
Use a credit card with a zero balance. If you have multiple types of balances on a credit card – purchases, cash advance, balance transfer – any payment above the minimum goes to the higher rate balance. Meanwhile, the other balance, e.g. purchases, doesn’t decline and instead accumulates interest. This makes it harder to repay the cash advance balance.
Taking out a cash advance could cause you to lose any promotional rate that currently applies to your purchases or balance transfers. You’ll have to pay your entire balance in full or you’ll be charged interest.
Avoid purchases until the cash advance is repaid, for the same reason discussed above. You should also avoid making credit card purchases until you can afford a credit card balance.
Cash Advance Alternatives
The need for quick cash is often a symptom of a larger money management problem, like overspending or the absence of an emergency fund. In cases like these, repaying a cash advance could take a long time and cost a lot of money.
Before you decide to take out a cash advance, here are a few less expensive alternatives to consider:
- Small loan from your bank, credit union, family member, or friend
- Payday advance from your employer
- Due date extension from your creditors
- Consumer credit counseling
- Local emergency hardship programs (typically offered by your local human resource department)
Cash Advance-Proof Your Finances
Because of the expense, you want to avoid the need to take out a cash advance. Start by building an emergency fund. Contribute as much as you can toward savings until you’ve built a sizable emergency fund. Adjust your spending habits to eliminate debt and get your finances back on track. Finally, minimize your credit card debt by charging only what you can afford.
Ways to Avoid Extra Fees and Interest
Emilija Manevska/Getty Images
In a pinch, fast access to cash can help you cover an emergency or unexpected crisis. But one of the most unattractive aspects of credit card cash advances is how expensive they can get. Not only is the interest rate usually higher than on regular credit card purchases, but you’ll typically have to pay a fee too.
Drawbacks of Cash Advances
- Most carry a fee of 3% to 5% of the advance amount, with a minimum of $10
- The interest rate is typically higher than on purchases (in some cases, 10 percentage points higher or more)
- Interest accrues with no grace period (meaning you can’t avoid finance charges even if you pay your bill as soon as you get it)
- Only a portion of your credit limit may be available for cash advances
- Some ATMs limit the amount of cash you can withdraw in a single transaction and charge an ATM fee
If you’re considering tapping into your credit card’s available credit to access cash, stop and consider the options below first. There are, in fact, creative ways to get cash from a credit card without actually requesting a cash advance. These methods may have costs, too, but depending on how much cash you need, they may be more affordable.
Plus, if you have good credit and qualify for a new credit card, taking these steps using a card with an introductory no-interest offer may help reduce your expense even more, particularly if you just need some time to catch up after a sudden crisis.
Purchase a Prepaid Gift Card
Buy a prepaid gift card with your credit card and then sell it to someone for cash. You may have to accept a little less than the face value of the card to incentivize someone to purchase it from you, but there are several online marketplaces to assist you: Cardpool, Giftcard Granny, and Raise, to name a few. Just make sure whatever discount you offer is less than what you would have paid in cash advance fees and interest.
If you have accumulated credit card rewards, you may be able to redeem them for a gift card, sometimes even for more than face value. For example, you may be able to get a $25 gift card for rewards worth $20.
Find a Friend Who Uses Cash
If you have a friend or relative who’s planning to make a big purchase in cash, you can make the purchase for them, using your credit card. In return, your friend can give you their cash (or deposit the funds into your bank account, perhaps using a peer-to-peer payment service.)
The above scenario doesn’t break any rules. However, many major peer-to-peer payment providers forbid actually using their service to get a cash advance from your credit card, and they could suspend your account or take legal action if you do. User agreements for PayPal, Venmo, and Cash App, for instance, all explicitly prohibit this.
Shift Your Bills Around
If you can use your credit card for something you would normally pay for with cash (or with money in your bank account,) go ahead and free up that cash. This could be particularly helpful if you get a new credit card with an introductory no-interest offer that buys you time to catch up without accruing interest.
Some billers (like many landlords) charge a convenience fee when you pay a bill with a credit card, so make sure to compare your overall costs before choosing the most affordable way for you to get cash. Ideally, the fee is less than the cash advance fee you would otherwise pay, but even if it isn’t, if you’re not hit with a higher cash advance APR, it may still be worth it.
Buy Something With Your Card, Then Sell It for More
If you’re willing to shop around, you may be able to use discounts, sales, or credit card rewards to purchase items at below-market prices. Then you can sell those items online or to a friend at a higher price. The profit may give you the cash you need, plus a little extra to cover your interest charges if you need some time to pay off the credit card balance. Of course, there’s a chance you won’t be able to make a profit or sell the item at all.
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If you overpaid your credit card balance or had refunds post to a credit card account with a zero balance, you may end up with a negative balance. You may choose to keep this balance on the card to be applied to future purchases or opt to have a check issued to you for the negative balance amount.
Call customer service. Contact the customer service department of your credit card online or via phone and simply ask for a refund of your credit balance. The agent can usually process your request and issue a check to you immediately.
Send a request via certified mail. If you want to ensure that your inquiry is documented, send a certified letter requesting a refund of your credit balance on your credit card. This way you have a record of the issuer receiving the request.
Wait one billing cycle. Credit card issuers sometimes refund any credit or negative balance on your account at the end of the billing cycle. The issuer’s system sees that funds are owed to you and often automatically issues the check payment without you inquiring.
Close the account. Once your account is closed, just as you would be liable for any outstanding debt, the card issuer is also liable to pay you any negative balance on your account. A request to close the account via phone or mail automatically triggers a check to be issued to you.
Checks issued to you for a negative balance on your credit card may take several business days to reach you. Check with your card issuer for time frames or other conditions per the cardholder agreement.
If you have chosen to apply for and use a Cash Card for making payments through your Cash App, you may wish to check the Cash App Card Balance from time to time. It is not difficult to find a balance. You might have read through the terms and conditions of the Cash App and how the Cash Card is to be used. The basic understanding is that the Cash Card is just an extension of the Cash App, and you are permitted to use the card only till you exhaust the amount of available funds in your Cash App account.
Here’s how you can check the exact amount you have in credit in your Cash App and the amount you can spend with your Cash Card. Before that, however, you may wish to acquaint yourself with some of the unique features of the Cash App Card.
A very Useful Card to Have
The immediate advantage with the Cash App Card is that it gives you the comfort of a debit card while offering many privileges that a credit card does. The only factor that you have to keep in view is that though your Cash App is linked to your mainstream bank account, you cannot access the balance in your bank account through this Cash App Card.
Only the balance available on the Cash App can be utilized to pay with the Cash App Card. The easiest way is to have as much money transferred from your bank account into your Cash App as possible. When you use a credit card, there are many offers and discounts attached to the usage. If you start using the Cash App Card, you will realize you get much more than what you can get out of a credit card. Just check out the benefits from the Cash App menu.
You can link your Cash App Card to your Apple Pay as well. This means when you make payments through your Apple Pay account, you can mention the Cash App Card as the source to draw the funds from. This way, you are getting the best of both worlds.
Checking the Balance on Your Cash App Card
As mentioned, if you know how to check the balance available in your Cash App account, the same is the Cash App Card Balance as well. The available balance on the Cash App is available on the dashboard. It is usually seen in the top center of the app’s screen as you open it on your mobile.
You can spend your balance by using your Cash Card or sending a P2P payment, use it to buy Bitcoin, or transfer it to your bank account through standard or instant deposit.
If you are not sure whether a transaction you made had gone through or not, you can check your bank account to see if it is reflected there. There is always some gap when you use your Cash App Card, and it getting reflected in your bank. Wrong balances can appear due to an odd outage that happens with the system. With millions of transactions going through the app, it can have such issues.
If you have doubts about the balance being shown on the Cash App, you can cancel that particular payment. You have a 24-hour window within which you have to do this if you find that the person you sent the payment to has not accepted it for any reason.
A cash advance may be quick and easy, but there are strings attached
When you need money fast, your first thought might be to turn to a credit card cash advance. It’s quick, it’s easy, and often your credit card issuer seems to be begging to you to borrow by sending you offers and blank checks. Still, cash advances carry a lot of costs and limitations, so before going this route, be sure you investigate alternative financing—such as the methods listed below. First, though, let’s examine the terms of a credit card cash advance, so you can better compare it to other options.
- A credit card cash advance is a loan from your credit card issuer.
- Advances generally do not come with an interest-free grace period, have a higher interest rate than regular purchases, and carry a transaction fee.
- The amount of the advance is usually limited to a percentage of your credit limit.
- Alternatives include various types of loans—from family or friends or your 401(k), or a collateral or personal loan from a bank, for instance—or a salary advance.
How a Credit Card Cash Advance Works
A credit card cash advance is a cash loan from your credit card issuer. As with any purchase, the cash advance will appear as a transaction on your monthly card statement and interest will accrue until it is paid off.
Significantly, though, the terms for cash advances are different from those of ordinary purchases—and not in your favor. There is usually no grace period for cash advances; the interest starts accumulating from the day of the transaction. Also, the interest rate is usually somewhat higher for cash advances than for everyday purchases.
Credit Card Cash Advance Terms
Details about cash advance fees and terms can be found on the Schumer box for the credit card, which should appear on your card statement or in the original credit card agreement. Here’s an example from the Chase Sapphire Preferred card. It shows that the annual percentage rate (APR) for a cash advance is 19.24%, compared to 15.99% for purchases. The fee is $10 or 5% of the advance, whichever is greater.
Another important detail: When a credit card has different types of balances, payments are applied in the manner disclosed by the credit card issuer, not necessarily to the balance the cardholder wants to pay off first. For Military Star Rewards account holders, for example, Chase applies the minimum payment to the balance with the highest APR. Any payment above the minimum is applied “in any way we choose.”
These terms mean that even if you make payments regularly and diligently, it can be hard to pay off the advance, especially if you’re continuing to use the card to make purchases. Getting sucked into an ever-increasing debt spiral is very easy.
Cash advances are sometimes limited to a percentage of the cardholder’s credit limit. Each credit card issuer has its own policy and formula for setting cash advance limits. In this example, the cash limit is 20% of the credit limit:
Your credit card company gets to decide what part of your balance it applies any payment to that’s over the monthly minimum amount, allowing it to shrink low-interest balances before high-interest ones.
8 Alternatives to a Credit Card Advance
Because of the higher cost of a cash advance, it’s worth investigating other income sources. Depending on your creditworthiness and assets, these eight options may be better than or not as good as a cash advance. Each has advantages and disadvantages.
Loan from friends or family
Consider asking folks close to you for a free or low-interest short-term loan. Yes, asking can be embarrassing, and the loan could come with a lot of emotional strings. It will help if you keep things businesslike: Use a properly executed written agreement that spells out all of the terms, so both sides know exactly what to expect with regard to cost and repayment.
Most 401(k) administrators allow participants to borrow funds from themselves. Interest rates and fees vary by employer and plan administrator but are generally competitive with prevailing personal loan rates (see below). The loan limit is 50% of the funds up to a maximum of $50,000, and repayment is five years or less. There is no credit check, and payments can be set up as automatic deductions from the borrower’s paychecks. Keep in mind that while you’re borrowing funds from your 401(k), they are not earning any investment returns, which could affect your retirement.
While it’s not highly recommended because the funds are supposed to be for retirement, there is a way to use your Roth IRA as an emergency fund. Because contributions to a Roth IRA are made with after-tax dollars, Internal Revenue Service (IRS) rules allow you to withdraw that money at any time without penalty and without paying additional tax. If you’re under age 59½, though, be sure not to withdraw more than you’ve actually contributed, even if the account has grown in size. The earnings on your contributions are subject to taxes and penalties.
Bank personal loan
For a borrower with good or great credit, a personal loan from a bank may be cheaper than a credit card cash advance. Also, the payoff will be faster compared to making credit card minimum payments, further reducing the amount of overall interest paid.
Any loan secured by real assets is a collateral loan, which often has less-stringent credit requirements than an unsecured loan. Home equity loans and lines of credit are secured by your residence’s value, for example. Some banks also make loans against the value of a trust or certificate of deposit (CD).
Many employers offer low-cost payroll advances as an alternative to more costly traditional payday loans. Fees can be as low as $8, but beware of interest rates. They range from 10% to 165%, which is predatory lender territory. Payments can be set up as automatic paycheck deductions.
P2P lending, as it has come to be known, is a system in which individuals borrow money from investors, not banks. Credit requirements are less stringent and approval rates are higher. The most expensive loans top out at about 30% APR, plus a 5% loan fee.
Payday or title loan
A car title loan should be considered as a last resort, due to its astronomical cost. Like title loans, payday loans usually charge interest rates well in the triple digits—300% to 500% and more. The fees on both types of loans can be so unaffordable for borrowers strapped for cash that many renew their loans several times, at an ultimate cost of several times the original loan amount. These two are probably the only loans that the credit card cash advance is actually superior to—except in states where the interest rates on this sort of financing are capped very stringently.
The Bottom Line
Every short-term loan option has its pros and cons. A cash-flow crunch is a high-stress situation, but that doesn’t mean you should panic. Take time to consider all your options. The terms for short-term loans are often tough, financially as well as emotionally. However, depending on your exact needs and timetable, another sort of financing may be preferable to borrowing from your credit card. Credit card cash advances are costly enough that they should only be considered in a genuine emergency.
credit card advice
If you’re looking for information on how to get cash from a credit card, you’ve come to the right place. There are a couple of different ways this can be done and we’ll cover both in the article below.
In a world where you can use a credit card to pay everyone, from your favorite babysitter to the artist on the street, it’s a rare event when you need to fork over actual cash for something.
Rare, but not unheard of — like when you need $50 cash to keep your mis-parked car from being towed, and you need it now. But even when you need cash in hand, your credit card can be a valuable tool.
Indeed, when people speak of getting cash from a credit card, there are two methods to which they’re usually referring: pulling cash from an ATM, for when you need cash now, or getting cash back rewards, which act as a rebate on everything you buy.
Method 1: Get a Cash Advance from a Credit Card
Although most things in life can be paid with a swipe or a tap, cash has yet to go completely out of style. When you need emergency cash but don’t have enough in your bank account to cover the situation, you may be able to use your credit card to pull cash out of an ATM.
Called a credit card cash advance, this service can be handy — but it isn’t free. Cash advances not only come with transaction fees for each advance, but also tend to charge higher APRs than other transactions.
That said, a cash advance can be the lesser of evils in some cases, particularly when used as an alternative to a more expensive short-term cash advance loan or a payday loan.
How it Works
Before attempting to withdraw money, you should first check your credit card agreement or online account to verify that your card is eligible for a cash advance and to find out your card’s cash advance limit. That limit will likely be much smaller than your actual credit line.
Once you know if, and how much, you can get from an advance, you’ll need to decide how you want to obtain your funds. The most common way to get money from a credit card is to set up a cash advance PIN so you can use your card to withdraw money from an ATM.
Most issuers will allow you to set up your cash advance PIN online, although you may have to contact your card’s customer service line in some cases.
Once you’ve set up a cash advance PIN, you can use your credit card at any eligible ATM the same way you would use a debit card (though the money isn’t coming from your bank account, it’s being charged to your credit card as a cash advance transaction).
If you don’t want to set up a PIN, some credit card issuers may allow you to simply present your credit card and photo ID at a local branded bank branch to receive a cash advance.
Credit card convenience checks are also a common way to perform a cash advance. Convenience checks are paper checks mailed to you by your credit card issuer that can be used like any check to make a payment via your credit card, but the transaction is treated as a cash advance by the credit card.
If you’re looking for a credit card without any cash advance fees, you’re probably going to need to join a credit union. If you want to use a credit card from a major bank to make a cash advance, you’re likely going to pay a fee.
Those cash advance fees tend to range from 3% to 5% of the total transaction amount, which can add up as your advance grows. So, to pick the best card for a cash advance, it’s a good idea to use one with a lower cash advance fee.
At the same time, you’ll also want to look at the cash advance APR, which is often separate from — and several points higher than — the usual purchase APR. Cash advances start accruing interest right away, so a lower APR can help keep costs down.
Written by Dom James, Financial Content Writer
You can use a credit card for cash withdrawals, but they come with expensive fees. Here is when they are charged and how to keep your costs down.
How much cash can you withdraw with your credit card?
Withdrawing cash using your credit card is known as a cash advance. How much you can withdraw from your credit card will depend on a few factors. These include:
Your total credit limit: This is the maximum amount you can use on your credit card. You can find this on your credit card statement.
How much of your limit you have left to use: The amount you have left to spend on your credit card can affect the amount you can withdraw from your credit card.
Your credit card’s cash advance limit: Most providers set a maximum percentage of your credit limit that you can withdraw from, like 90%.
Ask your credit card provider what the cash advance limit is on your credit card, and what the charges are before making a cash withdrawal.
What does cost to withdraw cash from your credit card?
Withdrawing cash from your credit card is an expensive way to borrow money. Each time you make a cash withdrawal from your credit card, there are two charges you’ll face:
Daily interest: You will be charged interest on the amount you withdraw from the day you take it out until you pay off the balance.
Cash advance fee: This is usually a percentage of the amount you withdraw, or a fixed fee, depending on what you withdraw.
For example, a credit card may charge 3% or £10, whichever is higher. In this case, a £100 withdrawal would cost you £10, and a £1,000 withdrawal would cost you £30.
These charges differ from standard credit card purchases, which can give you up to a 28 day grace period before you start paying interest. Read more about how to understand credit card charges
Where can you withdraw cash using your credit card
You can get cash out on most credit cards in the following ways:
Using a cash machine
At your provider’s branch with ID, e.g. passport
Cashback when you pay with your card in a shop
There are also card transactions which are treated as cash advances, even though you don’t withdraw any physical cash. These include:
Making a mortgage payment
Paying a utility bill
Buying gift vouchers
Betting or gambling (including lottery tickets and most transactions in a casino)
Should you avoid withdrawing cash with your credit card?
Using your credit card to withdraw cash isn’t an optimal scenario. Not only is it extremely expensive, it leaves a mark on your credit record, which could impact any credit applications you make.
This is because, withdrawing cash with your credit card can lead lenders to assume that you need to use your credit card because you don’t have cash in your bank account. And even though your credit report is not the only factor that determines your eligibility for credit, it doesn’t help in making your look more creditworthy.
Find the best credit card for you, whether you’re looking for 0% card for balance transfers or purchases or day to day spending and rewards
Anything you pay over the minimum amount due will generally be applied to your highest-interest balances first.
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.
You’re finally ready to tackle your credit card debt, and you’re feeling optimistic. You could try the debt snowball method! Or the debt avalanche method! But later, when you’re making credit card payments , you realize it’s not that straightforward.
When you look at the first page of your credit card statement, or at the top of your account online, you might see your debt displayed as one big number. But depending how you’ve used the card, a closer inspection might reveal that it’s split into separate balances, such as:
A purchase balance, for things you bought with the card.
A balance transfer balance, for debts moved to the card from other accounts.
A cash advance balance, for money withdrawn from ATMs with the card.
What’s more, these balances may each have different interest rates. So when you make a payment on an account with multiple balances, where is that money going? Your issuer isn’t going to call you and ask how you want it handled. Instead, it will distribute your payment among your balances in a way that conforms to federal law.
Basic rules of credit card payment allocation
It would be nice, in most cases, if the law required that 100% of your payment go toward your most expensive debt. That’s exactly what an early draft of the Credit Card Act proposed. But the version that eventually became law gives credit card companies a little more leeway in divvying up your payments.
Generally, your issuer divides your credit card payment into two parts:
The minimum payment is the portion of your balance you’re contractually obligated to pay each month. The issuer can apply the minimum to whichever balance it wants. Often, this means the minimum goes toward the lowest-interest balance, rather than your most expensive one.
The excess payment is everything you pay above the minimum. The Card Act requires issuers to apply this part of your payment to the highest-interest balance first. After that, the remainder generally must be applied to the other balances in descending order, based on the applicable annual percentage rate, according to the law.
How does paying off a credit card work in practice? Let’s say you have a card with the following balances:
$640 of balance transfers at 0% APR
$60 of cash advances at 25% APR
$300 of purchases at 15% APR
Suppose your minimum payment was $25, but you opted to pay $100 instead. Here’s how your issuer might allocate your payment:
$25, the minimum payment, might go to balance transfers, since it has the lowest APR.
$60 might go to cash advances, which has the highest APR.
$15 might go purchases, which has the second-highest APR.
Before interest charges were added, the remaining balances would be as follows:
$615 of balance transfers at 0% APR
$0 of cash advances at 25% APR
$285 of purchases at 15% APR
The deferred interest exception
Most of the time, having your issuer apply your excess payment to the highest-interest balance is the most cost-effective option. But the Card Act makes an exception for deferred-interest offers , often found on store cards and medical cards. That’s because leaving those “no interest if paid in full” balances for last can have expensive consequences.
Deferred interest is different from the 0% APR offers you see on bank credit cards. Here’s how:
With a 0% APR card, you are not charged any interest during the 0% period. That interest is waived entirely. Once that period is up, you can be charged interest only on outstanding balances going forward.
With a deferred-interest offer, by contrast, if you have not paid off the purchase in full at the end of the interest-free period, you will be charged retroactive interest going back to the original purchase date.
Suppose you buy a $1,000 washing machine on a store card that promises no interest on that purchase if you pay it off within 12 months. That card has an ongoing APR of 24%. If you haven’t fully paid off the washer at the end of 12 months, you’ll be charged interest on it starting on the day you made the purchase — $155.27 in retroactive interest, according to a report from the National Consumer Law Center.
Now say you have multiple balances on that card — because you continued to use it at the store, making purchases that did not have deferred interest — and have been making only partial payments. In that case, avoiding retroactive interest would be almost impossible. That’s because the Card Act requires your issuer to apply most of that money to your highest-interest balances, not your deferred-interest balance.
Enter the Card Act’s exception for deferred interest cards. This rule stipulates that in the two billing cycles before a deferred-interest offer expires, the issuer must apply any amount paid over the minimum payment to the deferred-interest balance first. This exception makes it slightly easier to avoid retroactive interest. But it doesn’t make you immune from such charges, so stay vigilant. Read your statements and make sure you’re on track to pay off your balance on time.
Avoid credit card payment allocation problems
There are a few ways you can exercise more control over your credit card balances:
Don’t ask your cards to multitask. Nip all of your payment allocation problems in the bud by carrying just one balance on each credit card. First, move your debt to a 0% balance transfer credit card , if you can qualify for one, and use it as a “just for debt” card. Then, use a separate card for purchases, and pay it off in full each month to avoid interest charges.
Pay as much of your bill as you can afford. If you can’t qualify for a balance transfer credit card, the next best thing you can do is pay down as much of your credit card debt as you can afford. This ensures that a larger portion of your payment will go toward your most expensive balances. When you pay just the minimum, it allows your issuer to direct your payments to your least expensive debt, prolonging your repayment period.
Trust, but verify. These days, a computer — not a human — is allocating your credit card payments. For the most part, that means you won’t have to worry about fat-finger billing errors and misapplied payments. But errors still happen. Read your credit card statements closely and make sure your payments are being applied as they should be. If you think there’s a mistake, call your issuer and address the problem as soon as possible.
Claire Tsosie is a staff writer at NerdWallet, a personal finance website. Email: [email protected] . Twitter: @ideclaire7 .
You can ask your issuer to stop sending these online, by phone, in person or by snail mail.
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.
Are unwanted blank checks from your credit card issuer pilling up in the mail? If you’re not interested in the promotion, these balance transfer checks can really become an annoyance, taking up unnecessary space in your mailbox.
Fortunately, stopping the mailing of credit card balance transfer checks is an easy process that not only reduces stress but also limits the chance that the checks can be stolen and used by thieves.
Balance transfer checks look like regular checks, promising quick cash at a low interest rate. Of course, it’s more complicated than that. Instead of being tied to a checking account, the checks are tied to your credit card account. And if you borrow money from your account, you’ll likely face high fees for doing so, which usually includes a 3% to 5% balance transfer fee.
Some banks send balance transfer credit card offers in the mail at least once a month. But you can opt out of getting these marketing materials by asking the credit card issuer to stop mailing them. Contact the company by phone, e-mail and regular mail, online or in person.
The customer service department of the credit card issuer should be listed on the back of your credit card. Call the number and tell them you are not interested in the offer and ask that the materials be no longer sent to your home.
You may also be able to do this at your online bank account if you have one. Most online banking websites will give you the option of sending the company a secured online message. Once on the site, ask that you no longer be sent the promotional materials.
You can also send the credit card issuer or bank an email with the same message, or even visit the bank in person.
Your last option is sending a letter by regular mail to the card member services department, whose address can likely be found on the company’s website. However, this method will probably take the longest time to get a positive result.
If you’re interested in doing a credit card balance transfer , it’s best to compare all of your options — including interest rates, terms and fees — before signing off on a deal. It’s possible there’s another offer out there that is far better than the one you keep getting in the mail.
If you keep receiving these checks in the mail but have no plans to use them, always shred or tear up the checks immediately. This will prevent thieves from getting their hands on the unused checks and committing credit card fraud.
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Reader Questions are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.
Credit card balances tend to only move in one direction. The more you spend the higher they get, until you pay your bill and the number goes back to zero. However, with many people around the world canceling upcoming travel plans that they’ve already paid for due to the coronavirus, you may find yourself with a negative balance on your cards. TPG reader David wants to know what to do about that …
I had a trip planned to Bali this June that I paid for using my Amex Platinum. Because of COVID-19 I had to cancel, and when the airlines refunded my tickets I ended up with a negative balance on my Platinum card. Is there anything I can do to get this money back or is it stuck there?
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First off, let’s back up and explore how David ended up in this situation. For the sake of convenience let’s just say that his entire trip cost exactly $1,000. Months ago, when David was planning, he would’ve booked flights using The Platinum Card® from American Express as he mentioned, and then paid off the balance in full. This would’ve left him with a $0 balance on his card and fully paid-for plane tickets. Now that the trip has been canceled and refunded, his card would actually have a negative balance.
If you find yourself in this situation (like I have on three different cards recently), you have two choices. The easiest option is to just leave everything as is and continue spending on that card. In David’s example, he could charge $1,000 worth of groceries, gas or really anything to his Platinum card and he wouldn’t owe any additional money since it would just come out of the negative balance. This works best if you have a card like the Chase Sapphire Reserve with strong and diverse bonus categories, and especially ones like dining that are still useful during the current pandemic, and you might not want to spend $1,000 on an Amex Platinum since the card only earns 1x point per dollar outside of its limited 5x airfare and hotel bonus categories.
Thankfully, when I called both Chase and Amex to inquire about this issue over the last few months, the customer service agents were happy to deposit that balance directly to my linked bank account and in all three cases the money showed up in just one or two business days. This is a much better option — not only does it give you more liquidity at a time of economic uncertainty, but it allows you to then put your future expenses on the cards that earn the most bonus points. Not every bank is this generous, and I can only speak to my personal experience with Chase and Amex.
Some banks may insist on sending you a check via snail mail which can be frustrating if you want or need the money sooner, and some might not allow it at all. In that case, you’d probably want to use the card in question for most of your upcoming purchases until you’d used up the negative balance. “Free” money, especially right now, is probably worth more than a few extra bonus points.
David’s first move should be to call Amex and ask them to credit the negative balance back to his linked bank account. I’ve done this twice in recent weeks, and the process took less than 48 hours each time. If your bank isn’t as generous, you can continue charging new purchases to the card until you use up the negative balance.
Thanks for the question, David, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us @thepointsguy, message us on Facebook or email us at [email protected] thepointsguy.com .
Featured photo by Isabelle Raphael/The Points Guy.
- To “cash out” on the Cash App, you simply have to transfer your balance in the app to your linked bank account.
- If you aren’t familiar with Square’s Cash App, it’s a peer-to-peer payment app, like Venmo, that allows you to send and receive money with friends and family, without even being in the same room.
- Here’s how to cash out on the Cash App.
- Visit Business Insider’s homepage for more stories.
Square’s Cash App is a peer-to-peer payment app, like Venmo, that allows you to send and receive money with friends and family, without needing to have cash on hand or even be in the same room. It’s perfect for things like splitting bills, chipping in for party snacks, or just splitting a meal.
When someone sends you money on the Cash App, it lives in the app. If you have a Square Cash Card, you can use it like a debit card and spend your balance anywhere that accepts Visa.
However, if you don’t have a Cash Card, or would simply rather transfer your balance back to your bank account, doing so is very simple, and can even be done instantly if need be.
Check out the products mentioned in this article:
iPhone 11 (From $699.99 at Best Buy)
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How to cash out on Cash App
1. Open the Cash App on your iPhone or Android.
2. Go to the “My Cash” tab by tapping the dollar amount in the middle of your screen.
3. Underneath your balance, tap the button on the left that says “Cash Out.”
4. The “Cash Out” menu will pop up with your full balance amount autoselected for transfer. If you’d like to transfer less, use the touchscreen on your iPhone or Android to type in the amount.
5. Once you’ve decided how much you want to transfer, tap “Cash Out” at the bottom.
6. A pop-up will appear asking how you’d like to deposit the money. If you select “Standard,” the money will take one to three days to appear in your account. If you need the money immediately, you can tap “Instant” for a 25 cent fee.
Related coverage from How To Do Everything: Tech:
How to unlink and delete your Cash App account on your iPhone
How to send an invoice on PayPal to remind your clients to pay you
How to cancel a Venmo payment if you paid an inactive account, or send a request if you paid the wrong person
You can’t delete your Venmo history, but you can make all past and future transactions private — here’s how to do it
How to add money to your PayPal account, so you can transfer money or pay bills immediately
Insider Inc. receives a commission when you buy through our links.
I recently closed my Hilton Honors Ascend credit card from American Express. I had opened it in May 2017 when it was still called Hilton Surpass. The sign-up offer included a free weekend night certificate on your first cardmember anniversary after paying the annual fee a second time. The free weekend night certificate posted about 13 months later, but strangely enough, I was never charged a second annual fee. I redeemed my free night certificate and decided to close my card, and for some reason, I received a credit on my account for $50.25. Since this card was closed, I couldn’t just spend more money on it to take advantage of the credit. Instead, I requested a credit balance transfer and sent the funds to a different Amex card. Here’s how to request a credit balance refund or transfer from American Express.
Step 1: Go to Account Services
Once you’re in the account services tab, click “Open a Payment Dispute” to continue.
Step 2: Select “I have a credit balance on my account”
The sidebar of this page notes that you can use a credit balance to offset future purchases on your account. However, if your account is closed, you will need to request a credit balance refund or transfer.
Step 3: Enter the amount of the credit balance
If the account is closed, make sure to request the full amount of the credit balance.
Step 4: Request a transfer or a refund
If you have another Amex card, you can transfer the credit balance to that account. Otherwise, Amex will send you a check.
Step 5: Sit and wait
It takes two to three days for the request to be processed. It took a total of four days for the credit balance transfer to appear in my other Amex account.
If you receive a credit balance on a recently closed Amex card as a result of an annual fee refund, you can use the above steps to request a refund in the form of a check or a transfer to another Amex account. You might not expect to find this under “Open a Payment Dispute” but once you know where to look, the process is quite simple!
Use your Chase card to get cash, but at a high cost.
Updated Jul 20, 2020 . What changed?
Chase cardholders can easily get cash out of an ATM or a bank branch. This is a useful credit card feature, but an expensive one. Because of that, taking cash advances should be reserved in case you have no other options, or for emergencies.
What’s in this guide?
How to get a Chase cash advance
You’ll first need a Chase credit card. After that, here’s what to do:
- Call 800-297-4970 and request a PIN if you don’t have one.
- Go to participating ATMs.
- Enter the amount you wish to withdraw.
What purchases does Chase consider cash advance?
Chase considers the following credit card transactions to be cash advances:
- ATM cash withdrawals
- Cash withdrawals from a bank teller
- Casino gaming chips
- Foreign currency
- Lottery tickets
- Money orders
- Paying with certain third-party services
- Race track wagers
- Travelers’ checks
- Wire transfers fee
Chase cash advance fees
Chase comes with one of the highest cash advance fees and interest rates. Depending on your card, you will pay:
- A 5% fee of the amount with a $10 minimum.
- A 3% fee of the amount with a $10 minimum, with the Disney credit cards.
- The average cash advance APR is 25.99% but it could vary between cards.
Let’s break down how much a $500 cash advance might cost if you made a withdrawal from a non-Chase ATM.
|Cash advance fee||$25|
|30-day cash advance interest at 25.99% variable APR||$11|
|ATM fee at non-Chase terminal||$3|
|Total||$539 ($39 in fees and interest)|
Be careful of cash advance costs
As you can see from the chart above, cash advances can get expensive. Making one or two cash advances each year, may be worth it if there’s no other way to get cash. But a $500 cash advance each month may cost you $468 or more in fees alone. Because of that, consider whether a cash advance is essential and if you can cover the costs before going through with your transaction.
Cash advance alternatives
Before incurring the high costs of a cash advance, consider other options to alleviate financial pressure. These include:
- Pay advance apps.
You can get an advance of up to 50% of your earned income through a pay advance app. Consider this option if your paycheck will be arriving soon but you need a bit of cash to support you in the meantime.
- Negotiate with your creditors.
If your upcoming bills are putting a strain on your finances, consider contacting your creditors. Explain that you’re having trouble with payments and ask if they can offer you any alternative options. They might, for example, set up repayment plans or extend your due dates.
- 0% APR credit card.
If money’s a little tight right now but you have a good credit score, a low-interest card could be an option. If it has a 0% APR on purchases, you can use it for essential spending and pay off your debt over time. For balance transfers, watch out for fees. Consider a no-fee 0% APR balance transfer card.
- Borrowing from friends and family.
A friend or family member might be more than willing to help, especially if you need to borrow a relatively small dollar amount.
Chase credit card cash advances are expensive. You can save some money on cash advances with the two Disney cards, which come with a slightly lower cash advance fee.
But the difference is negligible. Because of that, avoid cash advances whenever possible.
Luckily, there are credit cards with lower fees and interest. Compare cash advance credit cards to find the best option for you.
While credit cards can, indeed, lead to the bondage of debt, they can also be great financial tools. How you use your credit card matters, and with the right approach, credit cards can help you improve your finances and better manage your cash flow.
As long as you pay your balance off each month, credit cards can be great for your finances. You can earn rewards, and you can ensure that you have the money you need in your bank account at all times. Integrate credit cards into your regular financial plan, and you might find that your personal economy runs more smoothly.
Integrating Credit Cards with Your Spending Plan
Your first step is to figure out how to use credit cardsas part of your spending plan. In order for this to work, though, you need to pay off your debt. If you are carrying a balance on your credit cards, you need to stop. Pay off your credit cards so that you can start fresh. You want to be able to keep your spending to within levels that allow you to pay off your credit card balance each month. Find the credit card that fits your needs.
Once you have your credit card debt paid off, you can begin integrating your credit cards with your spending plan. You still need a plan, and you can’t use credit cards (even cash back rewards cards) as an excuse to stop living within your means. Your spending on your cards should reflect your financial goals and regular expenses. Some of the items you can put on your credit card as part of your monthly spending plan include:
- Utility payments
- Recurring bills, such as subscriptions and Internet service
- Online purchases
- Other regular purchases
- Big ticket items that you have saved up for
Putting these items on your credit card each month can help you stay on top of your expenses, as well as help you rack up rewards points that can help you earn free travel, merchandise, and even cash back. Plus, putting your expenses on your credit card can also help you manage your cash flow.
Managing Your Cash Flow with Credit Cards
The way your money moves through your personal economy is cash flow. Managing your cash flow is important, since proper cash flow management can mean the difference between overdrawing your account and having a cushion at the end of the month. If you have all of your bills due at the beginning of the month, but you are paid twice a month, without carefully managing your cash flow, you could end up running out of money in your account before your next pay day.
Credit cards can help you manage your cash flow, though, since you can put everything on your cards, and then pay them off at the end of the month — after you’ve had the whole month for your pay to pile up. This can be especially helpful if you have irregular income.
More on Credit Cards
I have irregular income as a freelancer. Even the money my husband makes is irregular, since he is an adjunct professor. While I have regular gigs that I can count on, when the money ends up in the bank account is not always the same month-to-month. Sometimes PayPal takes three business days to transfer funds, and sometimes it’s four. Other times, a client might pay a little later than usual. I’m never entirely sure when funds will be available for my use.
However, I have bills. I have a car payment, a mortgage payment, and automatic transfers to a savings account, and to my tax-advantaged retirement account. If a couple of clients are slow, my account could be overdrawn with these automatic transactions. This is where the credit cards come in.
We are committed to full transparency in our mission to make the world smarter, happier, & richer. Offers on The Ascent may be from our partners – it’s how we make money – and we have not reviewed all available products and offers. That transparency to you is core to our editorial integrity, which isn’t influenced by compensation.
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Credit card debt is extremely expensive. If you carry a balance on a credit card, you’ll pay a fortune in interest and it could take you years to repay what you’ve charged.
Because credit card debt is so costly, the only way you’ll ever get ahead financially is to commit to never carry a balance. This doesn’t mean you need to give up using credit cards for good. In fact, if you do, you’ll miss out on credit card rewards and on the chance to build credit. But, it does mean you need to only use credit cards responsibly.
Image source: Getty Images
1. Live on a budget
The only way to stay out of credit card debt is to live within your means. If you have more expenses than income, it’s inevitable you’ll end up reaching for your credit cards to make up for the shortfall.
Your budget doesn’t have to be extremely detailed — although it can be. You can use an 50-30-20 budget to cap spending on needs to 50% and wants to 30% of your income while saving the remaining 20%. Then, the key is to just make sure your credit card spending never exceeds the amount of money you allocated.
If living on a budget with broad categories still leaves you with a credit card balance you can’t pay each month, you’ll need a much more detailed budget. You can allocate a certain amount of money to each type of spending you do. This would mean setting a monthly limit for food, transportation, clothing, eating out, and entertainment. Make sure the total amount of spending and saving doesn’t exceed your income.
If your projected spending and saving add up to more than you make, revise the budget and drop spending on unnecessary items until the numbers line up.
2. Set yourself a credit limit
To make sure you can pay off your credit card every month, set yourself a spending limit equal to the amount you’ve budgeted for everything you’ll charge.
If you charge groceries, gas, clothing, entertainment, and eating out, add up your budgeted amount for everything you’ll put on your card and that’s your spending limit for the month.
Once your credit card balance hits that amount, stop using your card for the month. If you pay cash for something you’d planned to charge, subtract that amount from your self-imposed credit limit.
3. Track your spending
You’ll need to make sure you don’t exceed the credit card limit you set for yourself or you’ll find yourself with a balance you can’t pay off.
The easiest way to do this is to sign into your online credit card account on a regular basis. You can see what your charges add up to so you can stop charging stuff if you’re getting near your self-imposed credit limit.
You can also use apps to track spending and can often set up alerts once you exceed a certain amount. This is a more hands-off approach and if you’re really trying to watch your money, it may not be as effective as monitoring spending yourself.
If you don’t want to worry about tracking every purchase and hitting your credit limit, your other option is to make payments on your card as you charge things. If you set up online payments, you can typically pay your card as often as you like. Sign into your credit card account every few days and pay your outstanding balance, returning the balance to $0. If you don’t have the money to pay off what you owe, it’s time to stop spending.
4. Build an emergency fund
Even if you’re able to stick to your budget and keep your credit card spending within limits you impose, you could still find yourself in credit card debt. This could happen if you have an unexpected emergency.
Emergencies are inevitable. They happen to everyone, but most people don’t set aside enough money to deal with them. If you have an unexpected emergency, such as a car that needs repair, you’ll probably end up charging the costs if you have no emergency fund. Once you do this, it can be hard to get the debt paid off and get caught up.
To avoid this outcome, you need an emergency fund. Your emergency fund should be accessible in a savings account and will ideally cover four to six months of living expenses. If you can’t get to that point quickly, save at least $1,000 to $2,500 as a mini emergency fund. If you have this much, you can cover most minor emergencies without turning to your cards and ending up in debt.
If you use your emergency fund money, prioritize building it back up ASAP. And if you started with a mini emergency fund, keep working on saving a full one. If something bad happens, such as losing your job and going a few months without work, you’ll need that bigger emergency fund to keep you from eventually ending up in credit card debt.
5. Automate your payments
Finally, to make sure you pay off your credit card bill in full, automate your payment. You can sign up with your credit card company to automatically deduct the balance due on your card from your bank account when your statement is ready.
As long as you’ve lived on a budget and stuck with the pre-set credit card limit you established, you should have funds in your bank account so you won’t have to worry about overdrafting thanks to your auto-withdrawal. It’ll just ensure you use your money wisely to pay off your credit card debt, rather than spending it on something else.
You don’t have to live with credit card debt
Credit cards are a useful tool to help you build your credit and earn rewards. The key is to use them properly and avoid getting stuck in credit card debt that costs you money and is hard to pay off. Now you know the steps to take to avoid credit card debt and you’ll be able to use your cards responsibly so you get all the benefits — without the downside of being in debt.
Don’t pay credit card interest until nearly 2022
The Ascent just released a free credit card guide that could help you pay off credit card debt once and for all. Inside, you’ll uncover a simple debt-cutting strategy that could save you $1,863 in interest charges paying off $10,000 of debt. Best yet, you can get started in just three minutes!
Accounting CPE Courses & Books
Recording a credit card payment involves the detailed entry of information from a credit card statement into a company’s accounting system. When a credit card processor submits a credit card statement to a company, the company is essentially being presented with a large invoice that includes many line items for a wide array of purchases. Because the contents of the statement can be so varied, it is difficult to assign a single default charge code to the account (as is done with most other suppliers, who tend to be associated with a small range of purchases). Instead, the accounts payable data entry staff must work their way through each of these statements and manually assign charge codes to each line item, based on the type of expenditure. An alternative is to forward these statements to the card users and have them fill in the required information, though this approach tends to delay the processing of payments.
The accounts payable staff may be supplied with a standard list of accounts to which charged items are assigned, since there is a fair amount of regularity in the types of items purchased with a credit card. Examples of commonly-purchased items are:
Travel and entertainment
The offset to the expense entry for any of the preceding items is the accounts payable account.
Once recorded in the accounts payable system, a check payment is eventually made in the amount indicated on the credit card statement (plus or minus any adjustments), where there is a debit to the accounts payable account and a credit to the cash account. The remittance advice is then removed from the statement, attached to the check, and mailed to the credit card processor. The accounts payable staff then attaches a check copy to the remaining portion of the card statement, and files it by month.
The credit card accounting process noted here must be repeated exactly in each month. Otherwise, even a single card statement may contain such a large expense that incorrect processing could notably impact the financial results of an organization.
At Experian, one of our priorities is consumer credit and finance education. This post may contain links and references to one or more of our partners, but we provide an objective view to help you make the best decisions. For more information, see our Editorial Policy.
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Cash back credit cards work by offering the cardholder a rebate for purchases made with the card. And while rewards can also come in the form of points or miles, many credit card users prefer cash back rewards.
What Is a Cash Back Credit Card?
A cash back credit card is one that offers cash rewards for spending. When you make a purchase with a cash back rewards card, you earn a cash credit for a percentage of the purchase. For example, you might earn 1% to 2% on all your purchases. Some credit cards that offer cash back rewards may also offer a higher payback on purchases from a specific spending category. For instance, you might be able to earn 3% back at grocery stores or at gas stations.
Some cards also offer bonus cash back on special spending categories that change each quarter. For example, you might get 5% back on grocery spending this quarter, and then next quarter your grocery payback reverts to the typical standard rate of 1% and another category, such as restaurant spending, earns 5%.
How to Get Cash Back Rewards From Your Credit Card
Once you’ve made purchases with your cash back credit card, it’s typically not difficult to redeem the cash back that you’ve earned. In fact, redeeming cash rewards can often be easier than jumping through the blackout period hoops to redeem travel reward points.
Most card issuers will offer you the option of redeeming your rewards for a statement credit, a direct deposit to your bank account, or even a check that is sent to you in the mail. Some rewards credit cards offer you points that can be redeemed for cash back or for other options such as gift cards, merchandise or travel reservations.
Cash rewards may also help you stay on top of your credit card bills, as you can have your cash back rewards automatically applied to your credit card balance. If that helps you pay down your card bill, it could also help improve your credit score, as well. (Learn more about how lower credit card balances can improve your credit utilization ratio, one important factor in computing your credit scores.)
Sizing Up a Cash Back Rewards Offer
There are dozens of cash back credit cards in the market, so how can you find the one that’s right for you? Start by thinking about which purchases you put on your credit cards most frequently. Look at cards that offer more than 1% cash back for all purchases, and compare them with cards that offer bonus cash back on some purchases and just one 1% cash back on all other purchases. You can also consider a card that offers you more cash back on up to a certain dollar amount on qualifying purchases each quarter. You can even consider using multiple cards for different types of purchases.
Next, look at the card’s annual fee, if there is one. Paying an annual membership fee might not make sense if you will likely earn less than that in cash back for the year. If the card waives the fee in the first year, be sure to check what the fee will be in subsequent years.
If you anticipate you might not pay off your balance in full each month, then you’ll also want to compare the interest rate charged on a cash back card with other cards. Paying a higher interest rate can quickly outstrip the value of cash back rewards.
Finally, consider a card’s sign-up or intro bonus, if they offer one. Many cash back cards offer cash bonuses of $100 to $200 when you start using the card and complete a minimum spending requirement. Make sure you understand how much spending you need to do—and in what time period—to earn the bonus. For example, you might need to spend $1,000 in the first three months to earn a $100 bonus. And think through what happens after that first-year bonus. If the card pays you just flat 1% cash back rewards, then you might be better off with a card that pays you 2% or more, even if it doesn’t even have a sign-up bonus.
It’s also common for cash back cards to offer a low interest rate on new purchases, balance transfers or both for six to 18 months. These can be valuable offers if you have an unpaid balance or if you might need to carry a balance for a short period of time, such as after a large purchase.
What Credit Score Do You Need for a Cash Back Card?
You typically need excellent credit to qualify for the most generous rewards credit cards, including those that offer cash back. However, some card issuers offer cash back cards to those with fair or good credit. There are even some subprime cards for those with fair or bad credit that can offer some nominal cash back rewards for certain purchases.
Which Cash Back Credit Card Is Right for You?
Here is one of the top cash back cards from the Experian CreditMatch™ marketplace.
- Blue Cash Preferred ® Card from American Express
This card has been newly refreshed to offer you top levels of cash back for many families’ most common purchases. You earn 6% back on U.S. streaming subscriptions and also on up to $6,000 per year in purchases from U.S. supermarkets (after which you earn 1%). You also earn 3% cash back at U.S. gas stations and on select transit, including taxis and rideshares, parking, tolls, trains and buses. And you’re eligible to earn a $250 statement credit after spending $1,000 within 3 months of account opening. There’s a $95 annual fee for this card. Find out if you are matched to this card through Experian CreditMatch TM .
- Citi ® Double Cash Card – 18 month BT offer
This card, from our partner, offers one of the highest rates of cash back on all purchases. You earn 1% cash back when you make a purchase, and another 1% when you pay for your purchases, for a total of up to 2% cash back. New applicants also receive APR of 0% for 18 months on balance transfers, with either a 3% or $5 balance transfer fee, whichever is greater.
More Cash in Your Pocket
Cash back credit cards can be a great way to save a little bit of money on all of your purchases, but you need to take a moment to understand them well. By looking carefully at how they work, and what are the best cards available for your needs, you may earn more cash back than you might imagine.
September 21, 2017 By Marco Carbajo
Do you need cash for your business or real estate investing?
Did you know you can convert credit cards into cash without paying any interest for 12 months or more?
If you want to know how to turn personal and/or business credit cards into cash at 0% APR than keep on reading this post. You’re going to discover that getting cash from credit cards is by far one of the cheapest sources of money you can find, period.
As you know most personal and business credit cards allow cardholders to withdraw cash against the credit limit in a transaction known as the cash advance. You’re basically borrowing cash from your credit card.
When you use your credit card for a cash advance, you repay the money just like you would when you make a purchase on your credit card. The difference is the interest rate you pay on the cash advance is much higher than the purchase APR: typically, around 24% annual interest or more. Ouch!
Now that’s pretty pricey but I have great news for you. You can avoid the high interest rate on a cash advance by using what’s known as the balance transfer strategy. The best part of this strategy is you can continue borrowing cash over and over again at 0%.
Why Convert Credit Cards into Cash?
Getting cash from credit cards is ideal for people who need cash but simply can’t get traditional bank lines of credit or installment loans because they can’t prove income. But, if you have verifiable income like W2, 1099, tax returns or bank statements than apply for our traditional bank lines of credit or loan programs instead.
The most important thing to remember is this strategy only works best when you have the right types of credit cards in the right combination. That’s why our unsecured credit lines program is so popular and effective. Let’s break it down in a step-by-step example.
How the Balance Transfer Strategy Works
Step 1: Our funding program gets you 5 business credit cards with a $20k credit limit each for a total of $100k in credit limits. (credit limits may vary depending on the card issuer)
Now keep in mind all the business credit cards through our UBF program only report to the business credit reporting agencies. This is a major plus for building your company’s credit file.
One of the business credit cards offers a cash advance for the entire card amount with no fee. (card #1) While most credit cards have cash advance limits there are a few lenders that allow you to cash advance 90-100% of the card’s limit.
The other 4 credit cards offer 0% balance transfers that range from 12, 15 or 20 months.
Step 2: Take a cash advance on the first card (card#1), this puts $20k cash in your checking account and leaves a $20k balance on that credit card.
You accomplish this by calling the phone number on the back of the credit card or writing yourself a check that came with the card.
Step 3: Call the phone number on the back of one of the other 4 cards and tell the card issuer you want to take advantage of their 0% balance transfer offer. At that point, you simply provide the details for the card with the $20k balance (card#1) and they pay off that card.
So, the card (card#1) that you pulled $20k in cash out of is now at a $0 balance with $20k in credit availability again.
The original $20k is now on another card (balance transferred) that has 0% APR on that balance for 12 or more months. This balance transfer strategy allows you to completely avoid the high interest rate that you would have incurred on a cash advance.
Now keep in mind some card issuers have no fees for balance transfers while others may charge a 2-3% balance transfer fee. But, being able to borrow money at 2-3% for 12 or even 20 months is incredible.
More importantly, where can you borrow money at under 3% over and over again?
Step 4: Repeat the process. (You can do this repeatedly until you reached credit capacity)
The end result in this scenario is you can get $100k cash in your bank account and $100k in credit card balances at 0% for 12 months or more.
Think about how powerful this is.
To able to raise this kind of cash without any financials, tax returns, business plans, collateral, proof of income or selling a hard money lender on your investment idea is just incredible.
These 4 steps are an example and it’s obviously not how it works every time because your credit limits will vary and so on. I just used round numbers to simplify the process to make sure you get how this really works.
Now keep in mind you can convert credit cards to cash with personal or business credit cards. So, if you don’t meet the credit requirements for high limit business credit cards than we can always get you 5 high limit personal credit cards that are ideal for converting credit cards into cash (balance transfer cards).
What are the Benefits of Converting Credit Cards into Cash?
- Small monthly payments that all go to principle
- Completely unsecured which is ideal for real estate investing
- Fast way to get cash for real estate investing
- It’s revolving credit so it can be used over and over
- Access to cash with only 680+ FICO® Scores
As an entrepreneur, small business owner or real estate investor you need to be creative if you can’t verify income or you really value low interest rates. As you can see converting credit cards into cash is a simple and easy way for you to get the money you need to get going.
If you want us to conduct a free pre-qualification review to see how much you can get in personal and/or unsecured business credit cards send your contact details and tri-merged credit report to [email protected] for a review. Please allow 24/48 hrs. for underwriting to complete your pre-qualification.
*To obtain your credit reports we recommend using BusinessFundingEngine.ProCredit.com
Read to apply for high limit business credit cards to convert to cash and build your business credit? Submit your information below and a funding specialist will contact you within 24 hours. Plus receive my FREE business credit seminar audio ($597 value) =>
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, Business.com, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’, ‘American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’, ‘Alltop’, and ‘Entrepreneur Connect’.
Cash is a standard medium of exchange for numerous types of businesses. Cash also is the primary means of payment for people who either can’t open a checking account or have made the decision to stay out of the banking system. Businesses and individuals who operate on a currency basis, but also use credit cards to pay bills or make purchases, have several options for paying off balances with cash.
Paying at the Financial Institution
Card holders can take cash to the bank or credit union that issued their credit card to pay monthly balances. In most cases, the teller can swipe the card to pull up the account, find the balance and accept payment. After making a cash payment, collect a receipt and confirm the deposit by accessing the account online or calling the customer service phone number on the back of the card. Be aware that financial institutions are required to report cash deposits over $10,000 to the IRS. An institution also may report multiple cash deposits of just under $10,000 if it suspects that deposits are being structured to avoid reporting.
Using a Debit Card Online
If going to the location of the card credit card issuer is not feasible, the local bank that issued your debit card may provide a solution. In this situation, cash would first be deposited to the debit card. The payment then can be submitted online using the debit card, either directly to the issuer or using a service that specializes in online money transfers. An example of this type of service is MoneyGram, which can be accessed either online or by walking into a Walmart location.
Wire transfers from Western Union are an accepted form of payment at financial institutions around the world. To make a payment in cash, customers can go into a Western Union office and present the bill to be paid, or find their credit card issuer using the company’s payee locator. If the service is being used for the first time, an account can be opened with a list of the customer’s usual payees including credit card issuers. With account information on hand, payees and accounts can be accessed for quick transactions. The customer then can submit the cash for payment of the bill and a service fee for wiring the money. A receipt for payment is generated once the receipt of the wire by the credit card issuer is confirmed.
Check Cashing Services
Many check cashing stores offer services that allow someone to deposit cash to pay a variety of bills, including credit cards. For people who receive payroll checks, tax refunds, or money orders but don’t have a checking account, these stores offer the convenience of being able to cash a variety of checks and pay bills at a single location. Generally speaking, a valid ID is a necessity for check cashing, while paying a credit card bill requires a statement from the card issuer. For added convenience, some check cashing stores offer services similar to banks, including pre-paid debit cards and direct check deposits for payroll and government checks.
Credit cards or cash? Credit cards offer convenience and a long list of benefits that cash doesn’t provide, but they also represent an ever-present opportunity to fall into a cycle of revolving debt that can last years, decades or even a lifetime.
So how can you identify the best times to pull out cash or plastic for your next purchase? Here are a few guidelines.
When You Shouldn’t Use a Credit Card
When a transaction fee is involved. If you’re thinking of paying your income taxes, mortgage, health insurance premium or other recurring bill with a credit card in order to potentially rack up reward points, miles or cash back, think again. Even if the servicer allows credit card payments (many don’t), they’ll typically charge a convenience fee that most likely outweighs the value of any reward. The IRS allows credit cards for tax payments, but with a 1.87% to 2.25% processor fee (in addition to the interest rate on the credit card if you don’t pay your bill in full). In contrast, the IRS allows short-term payment extensions for no fee and installment plans for $52 to $120 (depending on the taxpayer’s financial situation). Late payments are subject to a penalty (0.5% per month) and interest (the federal short-term rate plus 3%), but the total might be lower than the cost of using the credit card.
When you haven’t yet negotiated with a creditor. Whether it’s medical bills or some other expense that is unexpectedly large or out of control, before you charge up a credit card and trade one financial problem for another, contact the company’s billing department. It might reduce the balance owed or offer a payment plan with terms that are far more advantageous than that of your credit card.
When you are in the process of obtaining a mortgage. Mortgage underwriters don’t want to see any changes in your creditworthiness between the time you apply for a loan and the time it closes. If your credit card utilization suddenly goes up, your credit score could take a hit, leaving you unable to qualify for the loan that’s on the table. Resist the urge to go shopping for things your new home needs. If you’re in the mortgage process, use your credit cards very sparingly if at all.
When you want something you can’t afford. It doesn’t matter if it’s a restaurant meal, a new outfit, the latest smartphone, a vacation you really think you deserve or the wedding you’ve dreamed of since childhood. Big or small, if you can’t afford it, don’t buy it. Don’t let a credit card trick you into thinking you should have something when it is, in reality, not in your budget. Credit card credit lines can feel like an extension of your income but you need to realize that card spending constitutes a short term loan of the credit card company’s money.
When you already carry a balance. If you have credit card debt, you can’t afford to use your cards. Instead, pay down the balance before you add any new charges to the mix, or you risk getting stuck in a cycle of debt. And make sure you have the best card your credit score can get you. (For more, see “Signs You Need to Look for a Better Credit Card.”)
When You Should Use a Credit Card
To use as a convenience to purchase goods and services that you can afford. Credit cards are more convenient and secure compared to carrying cash. As long as you can pay your bill in full then a credit card is a logical and desirable alternative to cash for in-person purchases and a necessary tool for online transactions.
When you want additional warranty or purchase protection. A credit card can be a great way to protect a major purchase. Most card issuers offer purchase protection and an extended warranty for items bought with the card. Visa doubles the manufacturer’s warranty, up to one year. MasterCard similarly doubles the warranty, offers 60 days of price protection and even insures the purchase against theft or damage for 90 days. (For both brands, benefits vary by card issuer.)
When you want stronger fraud liability limits. Credit and debit cards all limit cardholder liability in the event of fraud, but credit card protection is stronger. A credit card holder’s liability for fraudulent use ranges from $0 (if the loss is reported before any fraudulent charges are made) to $50 (if the loss is reported after unauthorized use occurs). On a debit card, however, liability can be unlimited. It is $0 when the loss is reported before unauthorized charges are made, $50 if the fraud is reported within 2 business days, $500 if the fraud is reported more than 2 but less than 60 days after it occurs, and unlimited when the fraud is not reported until more than 60 days after it occurred.
To take advantage of benefits exclusive to the card. Co-branded credit cards typically offer exclusive benefits specific to the brand. For example, some airline credit cards offer free checked bags to people traveling on tickets purchased with the card. Likewise, some hotel chains offer upgrades or special amenities to guests who pay with a branded card. (For more, see “Should You Get A Gas Credit Card?”)
To earn rewards. So many popular credit cards offer rewards programs, it’s hard to think of a good reason to carry a credit card that doesn’t. The programs are highly competitive: Some offer cash back on every purchase; others pay points. Consumers who qualify can earn hundreds, even thousands of dollars back each year on everyday household spending. (The American Express Blue Cash Preferred card pays 6% cash back on grocery store spending up to $6,000 per year, for a potential rebate of $360. Cardholders earn a smaller percentage back for other categories of spending.)
For security while traveling. People who travel can be more vulnerable to fraud simply by virtue of the unfamiliarity of the local language or surroundings. Lost or stolen cash is gone forever, but a credit card can be shut down and replaced during one phone call.
The Bottom Line
Avoid using a credit card unwisely. Debt is costly. Don’t succumb to the temptation to spend beyond your means simply because a credit card with an available balance beckons from your wallet. Instead, focus on using it as a tool to get added value from your planned spending.
When you do use a credit card, do the math. Figure out if the benefit you seek is worth the cost you’ll pay in fees and interest. For more information, see “Credit Card Savings.”
Modified date: June 28, 2020
If so, let me explain an available tool that you must use if you have $1,000 or more in credit card debt. It’s completely legal and it even uses programs the credit card issuers themselves have created.
Here’s how to pay off your credit cards once and for all, faster than you thought possible:
Step 1: Move your high-APR credit card balances to a new card with an introductory 0-percent APR
If you have a credit card balance of $10,000 at 15 percent APR, you are paying $1,500 a year in interest! These finance charges make it extremely difficult to pay down your debt. For example, if you made a $200 monthly payment, you would only reduce your balance by $50 after paying the interest!
So the first thing you need to do is stop wasting money on finance charges.
Okay, but how? It’s simple:
The offers are yours for the taking
Credit card companies are competitive. They make money every time you use your card (and, of course, also when you carry a balance and pay them interest). Either way, if you have a credit card with Bank A, then Bank B would love to make you an offer to switch. These promotions can be quite generous and include cards with a long 0% intro APR balance transfer.
This means that you actually open a new credit card and request to transfer the balances from your existing cards to the new one. The new bank will pay off your old debts and you will begin making payments to the new card. The beauty of it is, the new card will not charge interest for a year or longer (sometimes up to 21 months).
Think about the $200 monthly payment on a $10,000 balance again. At 0% APR, all $200 will go to paying down the balance. Suddenly, a debt that would’ve taken a decade to pay off can be paid down in just a couple years.
How much can you save?
How much could you save by doing a balance transfer? Hundreds—if not thousands—in interest charges! Our simple balance transfer calculator can show you almost exactly how much you might be able to save.
Of course, your actual savings will depend on just how fast you can repay your balance. Which brings us to:
Step 2: Focus all of your financial efforts on paying down your cards debt at 0%
One of the most common questions I get here at Money Under 30 is: “I have so many dollars left over after essentials each month; should I save more or pay more toward my debts?”
If you have a big credit card balance, you should be using every spare dollar you have to pay it off!
This is especially true when you have a 0% APR to take advantage of because every dollar you pay goes toward reducing the debt, not interest.
Some top Intro APR balance transfer credit cards
Applying for a balance transfer card is very easy: Find the best card for you, fill out a quick 5-minute application, and check the mail for details on making payments to the new card. Here are some credit cards offering intro APRs on balance transfers to consider.
BankAmericard® credit card
Although balance transfer fees can cut into the potential savings of an introductory APR card, sometimes you’ll save more by paying the fee because you have longer to repay your balance at See Terms .
Best if: You want a a great introductory offer.
Keep looking if: You want a card you can earn rewards with after you’ve paid off your balance.
Credit required: Good to excellent. You’ll need at least five years of credit history. This usually equates with a FICO score of 700 or better.
Discover it® Balance Transfer
Intro See Terms APR for 18 months on balance transfers. Cash back program. See Terms . No annual fee. Learn more in our full review.
Need as much time as possible to take advantage of an intro APR? Consider the Discover it® Balance Transfer, which offers a See Terms intro APR on balance transfers for See Terms . There is a See Terms , but Discover also offers a generous cash rewards program. Earn 5 percent cash back in categories that change each quarter, up to the $1,500 quarterly maximum, when you activate. And 1 percent cash back on all other purchases. Discover matches all the cash back you earn during your first year for new cardmembers.
The ongoing APR after the intro rate expires is See Terms .
Best if: You want an intro APR on balance transfers and cash rewards.
Keep looking if: You want the best intro APR on new purchases.
Credit required: Excellent. At least 5 years of credit history with no recent late payments or other negative records. This usually equates to a FICO score in the mid 700s or better.
Capital One® Quicksilver® Cash Rewards Credit Card
0% intro APR on purchases and balance transfers for 15 months , then the regular rate of 15.49% – 25.49% (Variable) will apply after that. 1.5 percent cash back rewards. $150 one-time cash bonus. 3% balance transfer fee. No annual fee. See card details.
The Capital One Quicksilver Cash Rewards Credit Card has a straightforward cash rewards program that gives you 1.5% cash back on all your purchases. There’s also a $150 cash bonus when you spend $500 in the first three months from card opening, which defrays the 3% balance transfer fee if you transfer a balance.
Best if: You want a card to both transfer a small balance that you can pay off in a few months, but you also want to make some purchases and earn 1.5 percent cash back.
Keep looking if: Your sole focus is to pay off your balance as quickly and inexpensively as possible.
Credit required: Good to excellent. You’ll need at least three to five years of credit history. This usually equates with FICO scores in the high 600s or better.
How to move your existing credit card debt to a new card with a 0% balance transfer.
Updated May 13, 2019
If your credit card debt is collecting interest, a balance transfer might be the solution. You can get your credit card debt under control with a card that charges no interest for a promotional period. You can use this guide to discover the steps you need to take to request a balance transfer and some tips to paying off your debt before the introductory offer ends.
How to do a balance transfer in 4 steps
If you’re thinking of consolidating your debt by conducting a balance transfer, follow these four steps to understand how to compare your options, apply and pay down your debt with a 0% offer.
Step 1: Compare your options.
Since there are numerous 0% balance transfer offers on the market, it’s important that you research and compare them before deciding on the one that will best serve your needs. To make things easier, you can compare your options based on the following:
- Introductory interest rate. Most balance transfer credit cards come with a 0% balance transfer interest rate, but some may come with a low but higher rate of say 6%.
- Length of the introductory period. Balance transfer cards usually offer a low or 0% interest rate for a fixed time only. This introductory period normally last between 6 and 24 months. You should look for a card that will give you enough time to pay off your entire debt before the revert interest rate applies.
- Revert rate. When the introductory period ends, a revert interest rate will apply to your balance. This is usually a higher interest rate (such as the standard purchase and cash advance rate) and you should factor it into your calculations, especially in the event you are unable to repay your entire debt during the introductory period.
- Balance transfer limit. There is a limit to the amount you can transfer, and this varies among credit cards. You can only transfer up to a percentage of your approved credit limit, such as up to 70–100%.
- Eligible issuers and cards. Balance transfers are not usually permissible between credit cards issued by the same bank or card issuer. Check our list to learn which ones you can transfer your balance to.
- Balance transfer fee. Sometimes you will be charged a one-time balance transfer fee for the balance transfer, up to 3% of your transferred amount. As this can be a substantial fee depending on the size of your debt, you may wish to look for a card with no balance transfer fee.
- Other card features and fees. While you shouldn’t use a balance transfer card for purchases while you’re trying to pay down a debt, if you plan to use the card beyond the balance transfer offer, you should consider its typical features. These include the annual fee, purchase interest rate, cash advance interest rate, ATM fee, foreign transaction fee and other costs where applicable.
Step 2: Apply for a credit card and request a balance transfer.
Once you have chosen your new credit card, the next step is to apply. It can usually take around 10-15 minutes to complete a credit card application and, if you’re successful, your card should arrive within two weeks. To help increase your chances of approval and quicken the application process, make sure to consider the eligibility requirements and prepare the necessary information before you apply for the card:
- Age. You must be at least 18 years of age to apply for a credit card in Australia.
- Income. Most cards have a minimum income requirement that begins at $15,000 yearly. Premium cards have much higher income requirements.
- Residential status. Most cards require that applicants be Australian citizens or permanent residents, but some cards also cater for certain visa holders.
- Credit history. All cards require that you have a good credit history and credit score.
- Balance transfer T&Cs. As well as the balance transfer limit, there may be restrictions around the type of debt you can transfer. For example, some cards don’t accept transfers from joint accounts or a personal loan.
Important information and documents
- Proof of identification. You’ll need to provide proof of identification, which usually includes a copy of your driver’s licence, passport or Medicare card.
- Proof of income and employment. You may be asked for copies of recent payslips, income statements and relevant employment contracts.
- Proof of other assets. As well as relevant details of your assets, liabilities and expenses, you may also need to provide proof of any assets listed.
- Balance transfer details. The card application usually includes a section for requesting your balance transfer. Since this section is very important for your balance transfer request, be sure to provide accurate details of your current loan accounts and the amount(s) you would like transferred.
If you’ve met the eligibility requirements and completed the application properly, you can sometimes receive approval within 60 seconds.
Step 3: Close your old account.
Once you’ve received your new credit card and your balance transfer has been processed, it’s wise to close off your old account. Make sure that the balance has been successfully moved across by contacting your previous card provider, and then close your old account so that you don’t get hit with further maintenance or annual fees in the future. If you were unable to transfer your entire debt to the new card, you’ll need to pay off any remaining balances before you close the account. See our guide on how to cancel your credit card for tips on closing your card without hurting your credit score.
Step 4: Start paying off your debt.
Once your balance transfer is complete, you will have the length of your introductory period to pay down your balance. It is crucial that you make more than the minimum repayment each month to repay the entire debt before the revert rate applies. If necessary, seek free help for managing your debt.
Balance transfer guides for specific banks and issuers
A balance transfer can give you a leg up in climbing out of debt without the burden of high interest. It will buy you some interest-free time to repay your debt, and can save you money that would otherwise have been lost to interest fees. With some discipline and commitment, you can use a balance transfer credit to pay off your credit card faster and cheaper.
Video: How do balance transfers work?
Compare balance transfer credit cards
We update our data regularly, but information can change between updates. Confirm details with the provider you’re interested in before making a decision.
Before you take out a cash advance on your credit card, it’s important to understand the fees and risks involved, as well as the benefits.
A credit card cash advance is a withdrawal of cash from your credit card account. Essentially, you’re borrowing against your credit card to put cash in your pocket. However, there are costs to taking a credit card cash advance and, in some cases, limits on the amount you can withdraw. Here’s what you need to know.
You may be able to go to your bank or an ATM and use your credit card to take out money. While the process may seem similar to withdrawing money with a debit card, what you’re really doing is taking a cash advance on your credit card. Unlike a debit card withdrawal, where you’re accessing your own funds, with a cash advance, your credit card company is essentially lending you money and charging your account. The charge will likely cost you; cash advances generally have a transaction fee and a higher annual percentage rate (APR). Additionally, you will likely be subject to a limit on how much you can advance; this is called a cash credit line and is likely only a portion of your total credit line.
Using your card for cash isn’t the only form of cash advance, though. Some credit card companies send customers checks in the mail linked to their accounts—known as convenience checks. If you deposited them, the transaction would be considered a form of cash advance and you’d be subject to the cash advance APR and may be subject to transaction fees.
When to consider using a cash advance
Cash advances can be an important source of funds in an emergency. While you don’t want to plan on using cash advances regularly, you might use them if you are short of funds and unable to charge an expense. However, always be sure to consider all of your options given the costs.
Factors to consider
It’s a good idea to consult your credit card agreement to make sure you know the rules and fees. Particularly, look for and consider:
- Transaction fee: You will pay a transaction fee for credit card cash advances.
- APR: The APR for cash advances is often higher than for credit card purchases.
- Interest-free period: Cash advances often begin accruing interest at the time of the withdrawal, meaning there’s no grace period.
Ways to limit the fees associated with a cash advance
- Understand your transaction fees: Some transaction fees are a percentage of the overall advance; in that case, you could limit the fee by withdrawing only as much as you need. Other transaction fees may be a flat rate or a combination of a flat rate and percentage of the transaction. In this case, if you take all the cash you think you’ll need at once, instead of making multiple smaller transactions, you only pay the flat fee once.
- Plan your repayment: Unlike standard credit card purchases, where there’s a grace period between the purchase and the payment due date when interest kicks in, cash transactions, such as an advance, generally begin accruing interest immediately. That means paying off your cash advance in a timely manner is crucial to saving you money long term.
How to avoid taking a cash advance
- Make purchases with your credit card: If you have the option, you can often limit interest and transaction fees by charging purchases to your card rather than getting a cash advance.
- Avoid unnecessary purchases: Ask yourself if the purchase you intend to make with your cash advance is worth the extra fees or if it can wait.
- Monitor your balance: If you’re worried about running low on funds, it’s a good idea to keep track of your account balance so you’re not caught by surprise. If you bank online, you can generally set up text or email alerts to notify you if your balance drops below a set amount. If you’re a Bank of America customer, you can sign up for mobile alerts.
- Build an emergency fund: Occasionally you’ll need to pay for things that aren’t in your monthly budget, such as car repairs. Build an emergency fund when things are going well, and you may be able to avoid having to use credit card cash advances for these transactions.
For more information about bank cash advances, direct deposit and check cash advances, refer to your credit card agreement or your credit card statement. You can also contact your credit card company for more information.
The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.
There are a lot of travellers and savvy spenders out there who talk about loading up a credit card with cash, so that it goes into a positive balance, before you spend the money and bring it back down to $0. The appeal is easy to see if you’re going away for a week or two and want to put your spending money on your credit card – and this can be a way to save on interest when you put the cash there before you spend it. The actual ‘how to’ process is as simple as transferring money from your everyday account or savings account to your credit card to give it a positive balance.
Keep up to date
While there are a lot of forum discussions and travel blogs on this topic, it’s important to understand the deal with your own credit card in any given situation. That means reading and understanding all relevant terms and conditions, and ensuring that you follow them to avoid being charged the cash advance interest rate. The nature of a credit card is to supply you credit to be paid back, not to act as a ‘holding’ account for your cash reserves.
If you load up $2000 and spend $2,100 you will be using $100 of your credit limit, and can either be charged cash advance interest rates on the $100, or the full amount depending on the timing of the purchases and the bank’s own policy and the card.
Use your credit card, and other travel cards, wisely
Most lenders state that you should contact customer service to deal with any excess balance. While that is the case, it does not mean customers will be prevented from carrying a positive balance.
The golden rules of positive cash balances on your credit card:
Here are a few golden rules to keep in mind:
- Try not to keep a positive balance for too long, short term holiday spending only
- Check your balance regularly and make sure you know what will be coming up on your statement
- Plan your spending so that you don’t dip into your credit limit at all
- Leave some cash in your everyday or savings account that you can quickly transfer if you discover you have dipped into your credit limit
- If in doubt, just make a purchase and transfer the correct amount across on the same day. You can now do this online just about anywhere in the world
Beware of additional fees
For travel credit card options and further information read our page on cards with no international transaction fees. Most already come with a cash advance fee up to a few dollars (or 2-3% of the transaction value). Factor that in when planning your withdrawals. Currency conversion and other fees may also apply.
Take out more cash inside the bank
A great way to get your hands on more cash, especially if travelling in a country which doesn’t allow you to take out much from the ATM (including, for example, Bali and much of Asia) is to go into the bank if you see that it’s open and withdraw up to $1000 in AUD using your passport. This gives you plenty of cash, and you can divide it among you and your family members, and take some immediately to your hotel room so you don’t keep it all in one place.
When it comes to the practice of ‘positive loading’ your credit card, the only assumption you can safely make is that you shouldn’t ever assume this won’t lead to interest charges on your account. It depends which bank you are with, and which credit card you have with that bank. If you have been charged expect to spend time on the phone pleading your case to get something back – and remember it is all according to the policy of the bank and what terms and conditions you signed up for so it’s up to you to be aware.
A cash advance is a debit to the credit card account that results in you receiving actual cash or a cash equivalent transaction such as the purchase of gambling chips. For example, if you take out cash from an ATM and select вЂcreditвЂ™ as the account type. It also includes various other types of transactions (for example, where a credit card is used to pay a bill at a bank branch or via an approved agent of the biller i.e. tertiary fees or utility bills). ItвЂ™s important, however, to note a few key facts about cash advances.
For a full list of transactions that are considered to be a вЂcash advanceвЂ™, please refer to the ANZ Credit Card Conditions Of Use (PDF 372kB).
No interest-free days
Unlike your purchases, where you could get up to 55 interest-free days, you start paying interest from the moment you make the cash advance. Bear in mind that the interest is charged on a daily basis.
A cash advance will always attract interest, regardless of whether you have interest free periods on your credit card account. With cash advances itвЂ™s important to know that interest will generally be charged from the date of the cash advance and will continue to be charged on the outstanding cash advances balance until you pay off that transaction balance (including any previously billed interest, fees and charges) in full. You may avoid being charged interest on a cash advance if your credit card account is in credit (by at least the amount of the cash advance) at the time of the cash advance. Your account may be in credit if, for example, you have previously paid more off your account than you owe.
Cash Advance Fee
You may also have to pay a Cash Advance Fee (usually the greater of a percentage of the cash advance amount or a minimum fee), in addition to the interest charges. This fee will be added to your cash advances balance, which means you will also be paying interest on this.
Cash Advance Interest Rates
If you make a credit card cash advance, you may be charged interest at a higher rate than if you made a purchase. You should understand what interest rates apply to your product before making a cash advance.
For a full list of transactions that are considered to be a вЂcash advanceвЂ™, please refer to the ANZ Credit Card Conditions Of Use (PDF 372kB).
If youвЂ™re planning to make a cash advance on an ANZ credit card, please check the relevant interest rate and fees first.
Modified date: March 3, 2020
To help you make sure that you don’t miss out on the best rewards out there, we’ve put together a list of five ways you can get the most out of your credit cards’ rewards programs.
1. Choose the right cards
There’s no best credit card out there for everyone. The right card for you depends on your spending habits, your personal preferences, and your credit score.
Let’s say you have a large family and spend a lot on groceries and gas. It might make sense then to get a card like the Bank of America® Cash Rewards credit card that offers bonus rewards on those purchases.
On the flip side, getting that kind of card wouldn’t make much sense to someone who is single, has a low grocery bill, and doesn’t own a car.
The biggest decision you need to make is whether you prefer travel rewards or cash back rewards. If you choose travel rewards, then you’ll need to decide if you want a general travel card or an airline or hotel card.
You’ll also need to decide whether you want flat-rate rewards or the opportunity to earn bonus rewards, and so on. This can get complicated if you let it, so try to simplify this process as much as possible.
You can’t get most of the best rewards credit cards unless you have good or excellent credit, which typically starts with a 700 credit score. If you’re not there yet, get there before you start applying.
Go through this process not with just one card, but with a few. By using two or three rewards credit cards regularly, you can take advantage of their different rewards programs based on your spending habits.
For example, you could use the Chase Sapphire Preferred® Card for travel purchases, the Discover it® Cash Back for its great cash back program, and the Wells Fargo Cash Wise Visa® card for everything else.
2. Use your cards for everything
The more you put on your credit cards, the easier it will be to rack up rewards. No, this isn’t an invitation to start spending money on things you don’t need. Rather, it’s an encouragement to use your credit card instead of cash or a debit card whenever possible.
For example, some utility companies allow you to use a credit card without paying a fee. Even car dealerships may allow you to put some or all of your car down payment on your card.
Start looking for situations in which you can use a credit card instead of another payment method. But if a merchant charges a fee to use your credit card, do the math to see if you’re paying more in fees than you’d earn in rewards. If the fees exceed the rewards rate, it’s not worth it. Also, be sure to use the card only when you have the cash to pay off the balance.
3. Know what doesn’t generate rewards
It’s easy to get carried away with trying to use your card for everything, but don’t let it go so bad that you start doing things that don’t earn any rewards at all. For most credit cards, this includes cash advances and balance transfers.
It’s also important to note that both of these activities typically come with fees. And there’s no grace period with cash advances, so interest starts accruing immediately. Do yourself a favor and leave these out unless you absolutely need a balance transfer.
4. Pay off your balance in full
The worst thing you can do with a rewards credit card is to pay interest. It can reduce the value you get from the card’s rewards or even neutralize it entirely.
To help you avoid carrying a balance, create and maintain a monthly budget, only spend what you can afford to pay off, and keep an emergency fund to cover any unexpected expenses that arise.
5. Redeem your rewards the right way
If you have a cash back credit card, you may think that your best redemption option is cash. But with some cards, that’s not the case. For example, the Discover it® Cash Back offers a $5 bonus when you use your rewards to get gift cards on over 100 brands.
If you have a travel rewards credit card, you’ll have an even better chance of maximizing the rewards you’ve already earned. If it’s a general travel card, you can seek out the cheapest hotels and flights for your trip. And if it’s a hotel or airline card, you can book your trip at a time when your points or miles are worth the most.
This part of the game can take a while to get good at, but it’s worth the time improving your skills.
Rewards credit cards have a lot to offer, but it may require a little extra legwork and brain power to get the most out of yours. And if you do it right, you could score hundreds of dollars, if not thousands, worth or rewards each year.
Start by comparing the top rewards credit cards and finding the right ones for you then start looking for ways to maximize the rewards you can earn from them.