Using a cash advance from your credit card is a great way to get quick cash when you are in financial bind. However, for the most part you should avoid using cash advances for quick cash or for any other purpose, if you can. The main reason to avoid cash advances is the fees and interest rates that are associated with cash advances. Nevertheless, using a cash advance for quick cash can also be a huge setback for people who are trying to get out of debt.

Most people find that the best time to use a cash advance for quick cash is if they are trying to buy something but the vendor does not take cash. This makes it relatively easy to go to a nearby ATM machine and use the cash advance feature on your credit card. However, cash advances are best used in emergencies only.

Here is a look at some of the things that you need to be aware of when it comes to using cash advances for quick cash.

Number one: Fees
When using cash advances you are going to get charged a fee to withdraw the money. The fees that are associated with cash advances can vary greatly from one cash advance to another, depending on the terms and conditions of your credit card. Regardless of what kind of fees is associated with your cash advance most of them end up being costly, how costly they end up being depends on how your credit card company computes the fees. There are two ways to compute the fees for cash advances, credit card companies calculate fees on a percentage basis, which ranges anywhere from 1% to 4%. Alternatively, they can charge you a flat fee, which is always the same fee no matter how much money you take out because it is not based on the amount that you have withdrawn.

One method that is starting to gain popularity is to combine both methods of calculating fees. The reason that this is gaining more popularity is because it is resulting in larger fess for the company that issues you a cash advance. For example, your credit card company charges you a certain percentage depending on the amount that you withdraw, but they also charge you a fee of $10 regardless of the amount that you have withdrawn. Another method that card issuers might use is to charge a flat fee of $30 or a certain percentage, depending on which would result in the higher fee being paid.

Number two: ATM Machines
If you do decide to get a cash advance on your credit card, you want to avoid using an ATM. The main reason that you want to avoid using an ATM for your cash advance is that in addition to the fees that you are being charged by your card issuer the ATM will charge you additional fees. The financial institution that owns the ATM is charging these additional fees at the ATM, they are not being charged by your credit card company.

Number three: Interest charges
This is probably the biggest drawback for using a cash advance for quick cash. The reason for this is that more often than not the interest rates that are charged on the cash advances are usually several points higher than your normal interest rate for everyday purchases. Normally cash advance interest rates are from 20% to 25%; this is high when compared to your normal purchase interest rate for a standard credit card. The interest rate for purchases ranges from 15.88% to 17.30%. However, you might find some card issuers who will charge the same rate for both purchases and cash advances. If you do find a card issuer with the same rate make sure that it is not a promotional offer.

Another finance charge that hurts people who take out a cash advance on their credit card is the grace period and the payment method that the card issuer applies to the credit card. For the most part cash advances do not have any grace period, which comes as a shock to most people who take out a cash advance. Being that they do not have a grace period, this means that they will start accruing interest from the moment you take out the cash advance. With everyday purchases, you are not charged interest until the following month on the purchases that you have made. This means that if you pay your bill in full when it is due you will not incur any finance charges, with cash advances even if you pay the bill in full the following month you will still have to pay the interest that has accrued on your cash advance.

How payments are applied to your credit card account also affects you when taking out a cash advance. What most people do not realize is that when they pay their credit card payment each month the money that they are paying is applied to their credit card purchases, not the cash advance. This means that if you send in extra money to help pay off your cash advance that money will end up going to your purchases until they are paid off. For most people this means that the interest on the cash advance is going to quickly add up, which is going to result in a huge increase in fees that you have paid for using the cash advance for quick cash. If you keep a balance on your credit card, the payments being applied like that can lead to an increase in your finance charges and your overall interest rate.

Number four: Checks
Many credit card companies send out credit card checks in the mail to their cardholders. What you need to be aware of is that more often than not these credit card checks are treated the same way cash advances are. Therefore, while they might be advertised as a great way to get some extra spending money or maybe they look like a great way to pay off an outstanding bill, just because they are convenient you might be overlooking the fact that they can be costly.

Number five: Balance transfers
Along with the credit card checks and cash advances balance transfers are also treated like cash advances. The credit card companies entice you with a great interest rate to pay off your balance from one credit card with their credit cards, but once that new period is over you will end up having to pay the higher interest rate. The interest rates that they charge for balance transfers is usually included in the fine print, but more often than not it is the same interest rate that you pay for a cash advance.

Number six: Credit limit
What some people do not realize is that even though they have a certain credit limit the limit for the cash advance is not the same as your credit limit. Most people think that just because they have available credit on their credit card that they can take out a cash advance if the need arises. You need to look into your credit card terms and conditions to see what your cash advance limit is. You will find that the limit for cash advances is anywhere between 50% and 90% of your total credit limit.

Number seven: Debt
You also need to keep in mind that every time you use a cash advance for quick cash all that you are doing is putting yourself further into debt. Since they are simply putting you further into debt when you use them you should only use a cash advance in an emergency, you want to avoid depending on cash advances for quick cash. If you end up depending on cash advances for quick cash all of the time you will soon find yourself stuck in a cycle of never being able to make ends meet. This cycle is a quick way for you to get into debt that is over your head.

While cash advances are a useful tool if you are out and cannot pay with a credit card they should not be used all of the time. Cash advances should only be used in emergencies and even at that, they should be used sparingly. The best thing that you can do to avoid being stuck in the cash advance trap is to use your cash advances wisely.

Before you even consider using a cash advance for quick cash, you will need to look at your credit card terms and conditions. You want to know beforehand what kind of fees and interest rates you can expect if you decide to use a cash advance before you use it. The reason for this is that sometimes knowing what you are going to be charged, especially if the amount is going to be high, you will decide that you really don't need that cash advance.