In the present era, the paradigms of the money lending business are changing quite rapidly. Among the various financial support and cash advance facilities, credit card cash advance is gaining wide popularity. We need to stay on our toes to understand the various financial services available to make wise monetary decisions. There are many benefits and some points to stay alert when it comes to credit card cash advance. Our team is here to help you explore some crucial details regarding this mode of credit amenity.
What does credit card cash advance connote?
A cash advance represents the money that one borrows against their available credit card limit. Thus, a credit card cash advance refers to nothing but a form of withdrawal of cash using one’s credit card account. One can compare this amenity with the cash taken out via ATMs through a debit card. The only major difference exists due to the fact that the money is withdrawn is not from the available bank balance but the credit limit. There are more than one way using which individuals can get credit card advances. Let us explore how the credit card cash advance facility typically functions.
How does a credit card cash advance operate?
Credit card users do not have to avail of cash advances in Singapore through just ATM withdrawals. They can make use of other modes like bank tellers and convenience checks.
In order to get credit card advances in Singapore, one can also ask for convenience checks. These checks are akin to normal bank checks used for making payments. Many financial institutions and banks offer convenience checks with tailored offers so that their customers can utilize the cash advance amenity.
For regular ATM withdrawals of your required cash advance, one just requires a PIN. The process of using the PIN is just like the one for a debit card transaction.
The licensed moneylenders and banks in Singapore levy certain charges to offer credit card cash advance services. Usually, users have to bear a fixed upfront fee along with an APR (annual percentage rate). This fee and annual rate varies with the type of bank or moneylender. Since, there are several types of financial entities offering credit card cash advances, many can feel perplexed regarding what to look for while selecting the desired lender.
What aspects should you keep in mind before getting a credit card cash advance in Singapore?
It’s time to know some decisive elements that you should be aware of in advance before borrowing a credit card advance in Singapore.
Pay off your debt ASAP
The interest is levied on your cash advances from the date you receive it. There is no grace tenure and the interest that the borrowers have to pay is often quite higher than regular loans. It is especially true if you do not have other forms of purchase transactions on your credit card apart from cash advances. Thus, if you do not want to face the burden of high transaction costs and interest, you should consider repayment within the earliest possible time.
Keep a special eye on the fine print
The terms and conditions of availing of credit cards and cash advances can differ from one form of lender to the other. The fees and interest chargeable can vary and there is a possibility of hidden charges. Thus, before finalizing your agreement, you should browse through all the key aspects related to credit card services. Visit the website and go from a detailed check of all the documents provided.
Avoid making certain purchases with your credit card
At times, banks can see certain transactions besides actual cash withdrawals as credit card advances. The users then have to incur higher interest charges and upfront fees. Some forms of purchases that one makes using credit cards that can get categorized as advances include:
- Purchase of lottery tickets or gambling chips
- Travelers’ checks
- Money orders
- Foreign currency transactions
- Cash equivalent purchases via Paypal
No availability of purchase protection
Usually, for regular credit card transactions, many banking entities offer purchase protection for a duration of around 6 months. But, the users must understand that the purchase protection is not available for cash advance Singapore.
Understand the payment allocation process
During the months where you are just paying the minimum balance due for using credit cards and have also taken a cash advance, the sum payable will be first adjusted towards the outstanding sum apart from the cash advance. The policy is to usually set off the amount that earns less interest for the banking institutions. Cash advances entail higher interest income to the lending entity. Thus, they carry forward the amount due related to cash advances to the succeeding billing cycle earning more interest. It is advisable to pay an amount in surplus to suffice the minimum balance due on general transactions coupled with the cash advance balance.
What are the best ways to get cost-effective credit card cash advance in Singapore?
Choose a credit card provider offering appropriate usage terms
Before engaging any lending institution or bank for credit cards and cash advances, look for competitive interest rates and low fees.
Closely look at the transaction fees levied
Check whether the transaction cost is a percentage of the advance amount or a flat rate. It can also be a combination of the two. You must carry out your cash advance transactions in line with these terms to lower the overall spend.
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