Credit card advance is a type of loan that allows you to withdraw cash from the ATM with your credit card. You can also get cash from credit card advance by filling in a convenience check. The credit card advance limit is different from the limit of your credit card. Every credit card company will impose a different terms and conditions on their credit card cash advance services so make sure you read them.
It is not wise to use credit card advance to pay for your student loans because of the incredibly high interest fees. The interest fee of credit card advance is higher than the credit card interest fee. You will get charged with an interest fee of 19% or more of the cash advance that you withdraw. Most credit cards will charge an interest fees when you withdraw the cash advance.
It is very rare to find a card that does not charge an interest fee for withdrawing cash advance. The interest fees will start accumulating from the day the cash advance is withdrawn from your credit card. There is no grace period and you are usually required to repay within a month. Your credit score will drop significantly because it increases your credit utilization rate.
You aren’t just charged with the interest rate. You will also be charged with a transaction fee that is 2 – 3% of the withdrawn amount. The transaction fee is $10 minimum. Besides, you will also get charged with an ATM usage fee that is about $2.50 per transaction.
The best way to clear off your student loan is to find a part time job with enough salary for covering up the loan payment expenses. You must ask yourself if there is another alternative solution where you can get the money to repay your student debt.
It could be that you just need to make some changes to your lifestyle and reduce some unnecessary expenses in order to come up with a sufficient amount for repaying the loan. You should do your best to come up with more leftover money so that you can pay more of the principal every month instead of just covering the interest fees. Doing so can help you to pay down the principal amount of the loan faster.
It may be convenient to take out credit card advance but you are charged with a hefty fee in exchange for the convenience. It is a bad idea to take out a cash advance to repay your student loan. Credit card advance should only be your last resort if you have an emergency expenses and don’t have any money on hand to cover it. If you want to get a cash advance, you should ask yourself if you are able to make payment within a month.