Cash advance credit cards costs are out of control. There is no way to get around them unless you stop using your card to get cash.
But, even if you never get cash out you might still see those wildly expensive charges on your credit card statement. This is due to the new way credit companies have found to make money which is changing how they categorise certain transactions in order to maximise the amount of money they profit.
I think we have all gotten to the point where we understand that credit card companies are in the business of making money, and lots of it. They make no money when you pay off your bill each month or within the interest-free period. As economic times have gotten tougher more people have begun spending less and paying off their bills each month. This fact added to recent regulations preventing credit companies from changing how they can bill customers means credit companies are finding more creative ways to profit. They have taken some common transactions, including gambling, and reclassified them as cash advances.
The problem here is that you might not realise how much your gambling really costs because you may not be aware of these rates. Even if you are you might not realise how much cash advance credit cards really cost. Before you decide to use your plastic to gamble, online or in person, you should double check to see how those charges will be classed. If not you may wind up paying much more then you ever expected for that round of fun gambling.
Cash advance credit card charges:
- Higher charge. Cash advance credit card charges typically cost more in interest then purchases or balance transfers. On an average these charges are two to five percent more than your purchase interest rate. But, it can be more than 25% in some cases.
- No interest-free period. In addition to the excessive interest charges you get no interest-free period for anything deemed a cash advance. This means you will begin paying interest on the transaction the moment your card is swiped. Even if you pay your balance off completely every month you will still have been charged interest on that transaction.
- Gambling transactions. Credit card companies often determine that any purchases made in a gambling establishment are cash advances. Even if you do not spend one dollar at the tables you could be charged the higher rate for purchases of food or beverages.
Gambling is an expensive habit. If you can not afford to pay the cash advance credit cards fee associated with it you might need to consider a new hobby. For those who decide that they must gamble and do so on credit cards you should find one that has the lowest rates for cash advances or that does not deem gambling as such. If you are trying to get out of the gambling with borrowed money habit there are plenty of credit cards that will not allow you to use them for gambling. It might be a good way to curb your appetite for betting and save you wads of cash.Back to top