Cash Advance vs Personal Loan

I think that when you need extra cash, you need to think twice about a cash advance vis a vis a personal loan. Cash advances are like death traps. If you cannot pay off the cash advance within the time given - usually 18 months - the interest on the advance is scary. Not to mention that a cash advance on one credit card may not even give you enough funds for lets say, a home repair and so, you will end up getting an advance from two or more credit cards and you already know what will happen if you don't pay it off. Just sharing that I'm learning from a mistake - huhuhu

If you don't have the cash to do a necessary home repair then instead of a credit card get a HELOC (Home Equity Line Of Credit). Since the loan is secured by your primary residence the interest should be deductible (there are some circumstances where it won't be but they aren't common). It's also a good idea to set up an account specifically for home repairs that come up from time to time. Save the money for stuff like roof repairs and A/C replacement. If you put away even $100 per month that can take a lot of the sting out of repairs that only come up every 10 years or so.

I am all for emergency cash - for an emergency root canal or an old ailment that is not covered by insurance or even a new pair of glasses because you sat on your old one. For home repairs, I'd rather not cripple our emergency funds, unless if it is a case where we cannot live in the house until the repair is done - like a leaking roof at this time of the year when it rains every other day. As I said, I've learned the hard ward to not take out a cash advance - a personal loan is the easiest and most convenient step to take especially if your company has a partnership with a credit union, perhaps? Even those with bad credit or not so positive credit history can borrow some cash. Still, in my opinion, being able to borrow 2k to 4k against your credit card is a good option like what they offer at bank of america. Anyway, just kind of ranting due to a recent experience, but it is a good thing to know where you can get some cash when you are in need and to know that there are a lot of options, so you do not jump to the first option you are presented with even if the interest rates are bloody.

Never get a cash advance, even if it is low/no interest for a period of time. They will probably turn around and up your interest rate on your charges because they see that as you not having a lot of cash which makes you a riskier customer.

When I was younger, trying my best to make my way through difficult times, there was no such thing as Pay Day Quicky loans. All we had were pawn shops. LOL!

backpacker said:

Never get a cash advance, even if it is low/no interest for a period of time. They will probably turn around and up your interest rate on your charges because they see that as you not having a lot of cash which makes you a riskier customer.

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I agree. As someone who was desperate enough to have to get one...it's only through a bit of good luck that I was able to get out of it. Basically I was paying them back with each week's check...the whole amount of the check, then paying for another cash advance to get me through the week. Once they have you...it's harder than hell to get out of it. In a sense, it's a way for them to be your check cashing place where they can nail you for a huge interest payment each week.

sandpepper said:

I think that when you need extra cash, you need to think twice about a cash advance vis a vis a personal loan. Cash advances are like death traps. If you cannot pay off the cash advance within the time given - usually 18 months - the interest on the advance is scary. Not to mention that a cash advance on one credit card may not even give you enough funds for lets say, a home repair and so, you will end up getting an advance from two or more credit cards and you already know what will happen if you don't pay it off. Just sharing that I'm learning from a mistake - huhuhu

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You are paying the Stupid Tax - the Tax we pay when we do something Stupid (I've paid a few thousand there myself, and it's no fun at all). Payday loans, Cash Advances, even the Personal Loans you describe - they are all traps to wealth-building (though agreeably the trap has sharper teeth with the Cash Advance/Payday Loan places). Build up an emergency fund, and use that when you need cash. If you aren't willing to take cash out of your emergency fund to pay for something, well, then clearly it isn't important enough to avoid saving up for it. I've spent 10+ years in and around the military (lots of low income folks there) now, and I've walked hundreds of people now through the steps to get financially stable to where they don't need loans to make it to the end of the month. If you want, I'd be happy to go through it with you via PM, or here on the thread.