How to Figure Cash Advance Fees
Cash advance fees are an alternative option for credit card holders to borrow real cash currency. This is possible if you have existing cash balance in your account to serve as security, or your credit limit may be high enough to borrow against. Your credit will be used to calculate the amount you may qualify for within the bank’s credit ceiling.
- Ensure your requested cash advance is within the cash advance limit. The transaction may conveniently be dispensed through ATM machines. Cash advance fees vary from bank to bank. It suffices to note that this is one way for banks to make profit. You should thus be sure of the formula used to calculate your advanced credit. Before you receive your cash advance, get down calculating your repayment rate to verify your ability to repay.
- Remember that the amount transacted would attract different interest rates and most financial institutions would invariably charge between three and six percent of the amount lent. The fees charged would thus be based on the gross amount transacted. There is also a minimum fee of $10 to be incurred irrespective of the amount advanced.
- Consult a bank customer-care representative on how to secure cash advance directly from the bank. Consider the following worked out example:
Bank fee = 5 percent
Amount you wish to borrow = $300
Your tabulated fee would be: 5 percent times $300 = $15
Prepare to pay $15 for this transaction.
Cash withdrawal from an ATM is between $1 and $3.
- Note that ATM charges are higher if you use a credit card from a different bank because different banks have different withdrawal rates. You require your four-digit PIN number, which must be secret to all but you.
- Note any revisions of terms, it is possible that the fees applicable to you could correspondingly change-usually an increase. Be on alert to check on your email notifications regarding such possible changes. If indeed you do receive a notification to that effect, perform similar calculations so that you know your new fee.