Credit cards can be a decent source of funding in cases of financial emergency. However, it’s important to understand how credit works before using your credit card. Borrowed money is not free money, and it must be repaid — often with steep interest. If you’re considering utilizing a credit card for a fast cash advance, here’s what you need to know.

What Is a Cash Advance?

Generally, credit cards are used in place of debit cards to make purchases. These purchases come with an interest rate which is determined by your creditor. However, you also have the option of using your credit card to withdraw cash at an ATM. Such cash advances can be useful if you need a little money to fill your gas tank or to pay a pending phone bill. However, cash advances on credit cards should not be abused or used for frivolous spending.

Cash Advance Penalties

While a credit card cash advance may sound tempting, taking out cash advances is an easy way to dig a hole for yourself in terms of debt. Cash advances come with higher interest rates than normal credit card purchases, which means you end up paying more in the long run. Additionally, you’re increasing your overall amount of debt, making it harder to pay off that debt when your next paycheck rolls around.

A Gateway to Financial Ruin

Credit card cash advances are a lot like payday loans; they are predatory lending practices that prey on desperate borrowers. Sure, they give you a little bit of pocket money before your next paycheck, but in return they slowly sink you into a pit of debt. With cash advances, you end up paying so much in interest that it becomes difficult to pay back, and suddenly you’re back taking out another cash advance to keep your head above ground. 

This process is especially devastating for low-income borrowers who can easily get stuck in a cycle of seemingly inescapable debt. If you are in such a situation and need assistance staying out of or managing your debt, the best thing you can do is avoid taking out any more cash advances or payday loans and contacting a debt settlement professional immediately. 

Credit Card Debt Cycle Relief

Once you get into debt, getting out of it can be tough. Fortunately for you, Progressive Debt Relief can help you negotiate and settle the outstanding debt that’s been giving you trouble month after month. With a few smart money management decisions and a little help from Progressive Debt Relief, you can eliminate your debt and regain control of your financial future. Contact us today for a free professional consultation.