How do cash advances on credit cards work?

if I have a $100 balance and then take a $300 cash advance, would my next payment go toward the previous balance of $100 or the $300 cash advance would my minimum payment increase for that card would frequently taking cash advances and only paying the minimum affect my score the same as if I purchased it regularly? Do cash advances hurt my score more, do other prospective lenders know if I use cash advance option?
Answers

nt

Don't do cash advances. Ripoffs. Way back when there were no extra fees except interest and they were ripoffs then too. A Ron Paul supporter who does not know the basics about credit cards? I can assure you he would not advocate for cash advances.

oklatom

A cash advance fee is a fee or charge a credit card holder must pay when he takes a cash advance from his credit card. For example, a person may have a $500 US Dollars (USD) credit line on his credit card. He could go out and purchase goods or services with his credit card, or he could purchase something online. If he used his card to spend $100 USD at a store, this would be considered a charge. If he went to an ATM machine and withdrew $100 USD, however, this would be considered a cash advance, and he would be charged a fee. Cash advance fees can be expensive. In many cases, a person will incur a two to four percent charge when he takes a cash advance. However, this is not all he’s likely to pay. Some credit card companies charge not only cash advance fees, but also extra interest when a cardholder takes a cash advance. Furthermore, many of the credit card companies that offer grace periods on purchases do not offer them on cash advances. This translates into paying cash advance fees and incurring hefty interest right away. Some credit card companies don’t set fees based on just a percentage of the cash advance. In some cases, a person may be required to pay both a percentage of the cash advance and a flat fee. For example, he may be charged two percent of his cash advance and $15 USD no matter how much money he requests. Other credit card companies may add either a percentage or a flat fee, charging the consumer whichever amount is highest. Credit card users should also learn how their credit card companies apply payments when they are considering a cash advance. Payments are often applied to purchases first and cash advances second. This may not be a problem for people who pay their total bills off each month, but those who carry balances may end up paying more in the long run because of the increased interest when a balance is left over from month to month. With such high cash advance fees and interest, it may be hard to understand why anyone would want to take a cash advance. The fact of the matter is they are tempting because they provide quick access to cash when a person needs it. They can be good for emergency needs, but many financial experts recommend considering them only as a last resort. Bottom line, they cost you a lot. Avoid using them.

Judy

Read the info on the back of your statement and in the paperwork you got when you got the card.

Michael

Payments are applied to the highest interest rate first. Minimum payments are typically a percentage of your balance, so yes, your payment would increase. Other things you should know about cash advances, card issuers typically charge you a fee for a cash advance, and cash advances typically do not come with grace periods meaning you start getting charged interest on them immediately. Given how high credit card interest rates are, cash advances are about the worst possible way to borrow money. You should absolutely read your cardmember agreement to see what this "service" would cost you.

Eva

You have to read the fine print in your credit card agreement. The payment is usually split.

Jim

Payments go towards the higher interest rate. Yes your minimum payment would increase.