NEW YORK (MainStreet) — Anyone can get into a cash liquidity jam and need an advance from a credit card company.
Stuff happens, right? It could be a student overseas who needs quick cash to get back to campus from a foreign city, or an emergency with a car several hundred miles from home when there isn't enough money on a card to cover repairs. Whatever the reason, there is no shame in needing a credit card cash advance. Just watch out for the high fees that come with them.
The various forms of advances include wire transfers, money orders, legal gambling purchases, bail bonds and so-called "convenience checks" sent in the mail even though customers don't ask for them.
Fees from all such advances are high. In its survey of 100 card advance policies, CreditCards.com reveals the average interest is 23.53%, which is 8.54% higher than today's average 14.99% purchase APR on traditional credit cards. In addition, 98 of the 100 card payment policies surveyed charge fees for each cash advance — either $10 or 5% of the cash advance amount.
In real dollar terms, a $1,000 cash advance would cost $69 to pay back within 30 days, with an average $50 fee and $19 in repayable interest. And stay away from First Premier Bank, the BP Visa and Texaco's Visa card — they're at the top of the list of major fee offenders in the survey. (Also, don't count on earning any rewards points on a cash advance. "All major issuers" exclude rewards with card cash advances.)