General Forum - Credit card question regarding interest!! - Page 1

using a credit card to withdraw cash is a cash advance so always incurs a charge, minimum fee or percentage.

As you say it would be unfair if at the end of the month that was the only transaction you got charged interest, if it was a temporary cash flow measure you could pay into your credit card account the amount you took out + charge.

Yeh I did expect to be charged. I won't be making any other cash withdrawls as it was just a temporary thing so am I safe to assume I won't get charged for the cash I took out last month in my next months bill?
Thanks for your help by the way!



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as i said, I think the only way to be 100% sure is to pay in what you took out and the charge ASAP. Phone/email your credit card company, their website might say.

As far as I know (Ive not taken cash out on my cc as I know its expensive) you get charged a fee for withdrawing cash from the machine with your cc (either a flat fee or a % of the cash) and then interest on that 'cash advance' is seperate from any ballance from purchases and usually at a way higher rate than your purchase ballance rate, and its calculated from the day you took the cash you have no 'grace period' as you would say spending £100 on your card at the start of the month and then paying it off in full at the end of the month, the cash advance gets interest added from the day you get then cash, so if it takes you a month to pay back you pay £100 + 1 months worth of interest on the £100,

Where it gets confusing is say you have £1000 debt on your cc and you get a cash advance of £100 then at the end of the month you pay £200 off your card if the cc company takes the £200 to pay the cash advance off in full or so much off both debts as the 2 sums are charged at different interest rates you dont have a cc debt of £1100 you have 2 debts, one of £1000 purchases and 1 for £100 cash

This is why I avoid cash advances as they can spiral into very large sums, but sometimes its difficult to avoid...



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This item was edited on Thursday, 14th May 2009, 23:27

Cash advances are charged at a higher interest rate than a purchase or balance transfer and also incur a handling fee straight off.
There is, as mentioned by Robert above, no grace period and interest is charged from the date of withdrawal.
In rare cases, some card issuers allow you to withdraw cash at the same rate as your purchases or balance transfers but still issue the handling fee.

Now, as again, Robert states, it gets confusing due to how the payments are applied, and in general terms it goes something like:
This month's interest charges > Promotional offer balances lowest rate of interest > Other balances of higher rates of interest > Cash Advances

So, in the example of £1000 outstanding balance with say, £200 of it being a CA, if you pay £200 you get a new outstanding balance of £600 (other) £200 (CA)

Look at your statement as CC companies now have to state individual rates and balances as well as your estimated interest for the next period assuming you only make the minimum payment.

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Quote:
...if i don't take out cash from the hole in the wall from now on will I still be charged monthly interest on this one tranasaction??

As others have pointed out you'll be charged on a daily basis at a higher rate

The best advice is if you ever take money out via a CC is to pay off that amount in full ASAP to reduce the amount of interest accumulated

This item was edited on Friday, 15th May 2009, 10:50