Low Rate Cash Advances

Financial advisors usually tell credit card users to avoid cash advances because they typically attract a higher interest rate than purchases. The truth, however, is that many credit card users will require an occasional cash advance. Unfortunately, cash advances tend to be one of the most expensive features of a credit card, and it can be difficult to find a credit card that provides a low cash advance rate.

A low cash advance credit card will not have comparable rates to low rate purchase credit cards. In fact, card holders should consider themselves lucky to find a card with a rate of less than 15%. However, some low cash advance credit cards offer users some leeway with an interest free period. This is a great deal since all standard credit cards accrue interest on cash advances from the moment of withdrawal. An interest-free period can save cash advance card users a considerable amount within a short time.

An important feature of a low cash advance credit card is the allocation of payments. Card users must read the small print to learn the order that debt will be paid. A credit card that lists cash advances first before balance transfers and purchases can be considered a low rate cash advance card in its own right. If cash advances are paid off last, it could prove costly as the interest accrues unimpeded, making the original cash withdrawal extremely expensive.

A low cash advance rate does not necessarily mean the transaction is a cheap one. Most credit cards charge additional fees for cash advances, such as a cash handling fee that can range anywhere from 2-3%. Card users should factor this cost into the total cash advance to determine if they can truly afford it. Certain low rate cash advance credit cards will waive or reduce this fee.