Credit cards are very versatile financial tools; especially in the hands of a savvy consumer that is able to use them with the diligence and discipline required of any kind of budget spending. Credit cards additionally are very convenient tools to have and because of that more and more consumers each year sign up for new credit cards and use them at stores worldwide.
While credit cards are indeed very convenient as a financial tool it is reasonably obvious to note that they will never be able to match up to the convenience of having cash in your pocket. There are always going to be places (i.e. smaller restaurants) that do not accept credit cards as well as stores that will charge some nominal fee for credit card usage. These are normal occurrences and while they may be vexing to consumers at the same time consumers realize that it comes with the territory.
One thing that many consumers do in order to combat this trend and help haul themselves out of the situation is to take cash advances against their credit card. A cash advance is simply a cash payment made by a bank or credit card company to a consumer with the understanding that the amount of the cash advance will be added to the balance on their credit card statement at the end of the grace period (the amount of time between a purchase on a credit card and the due date for paying off the amount of that purchase on the statement).
Cash advances can be very good financial tools because they can provide the consumer with the cash they need to make normal day-to-day purchases in a hassle-free manner. A word of caution is advisable though because it is important that the consumer realizes that a cash advance is not extra money. It might be easy to think of it in that manner because it is physical cash but it is important to fight against that kind of thinking and realize that a cash advance is simply a purchase with your credit card and it must be treated in the same way as all other credit card transactions. Additionally, there are some other things that you as a consumer need to be aware of regarding credit card cash advances:
Cash Advance Fees: There are very few credit cards in the world that offer free cash advances with no strings attached. Cash advance fees for the better credit cards are usually in the range of $1-$2 and for the poorer credit cards can actually be a percentage of the balance being advanced. A savvy consumer is able to understand how the fee affects them and plan their cash advance usage accordingly.
Different Interest Rates: This is not a big problem with normal credit card deals but with introductory deals it can be a very dangerous pitfall. Many introductory interest rates do not apply to cash advances and because credit card companies will almost always credit any payment towards the lower interest balance first it can end up being a sticky situation for the consumer if they are not aware of exactly how cash advance works.
Reward Programs: If you as a consumer are using a credit card specifically for the rewards program then be very aware of the fact that in many cases a cash advance does not count towards a reward program. If your plan is to use cash advances in order to gain more points then make sure you pick a credit card where cash advances do count as rewards.