With everything going on in the world right now, from post-pandemic struggles to a potential looming recession, this may be a good time to consider other sources of money in case you need it. If you happen to be a credit card holder, do consider the Cash Advance feature. And make sure your credit card has the capability to transact the cash advance option.
Credit-To-Cash Strategy: What Is A Cash Advance And How To Be Eligible To Get It
With incomes down during the COVID-19 pandemic, it may be time to get creative when it comes to making money, whether it is with a part-time job or striking out on your own.
If you’re one of the millions of Filipinos out of a job due to the coronavirus epidemic, you’re dealing with difficulties that haven’t been seen in years. With unemployment hitting records and health restrictions still ongoing, competition is fierce for the jobs that are available.
Thinking outside the box in this situation, whether it be by starting your own business, getting part-time remote work to tide you over while you seek a permanent one, or resorting to what’s available to make money like availing bank loans and cash advances.
What is a Cash Advance?
Cash Advances allow credit cardholders to borrow or loan cash, based on their credit limit. It’s a short-term loan where you are charged a fee or an interest rate upfront by your bank.
Other Considerations
- Make sure you have read your credit card’s terms and conditions as some may have special limits.
- Credit card cash advances do not earn rewards points.
- Some credit card companies won’t allow you to take your entire credit line or credit limit in the form of cash advances.
- Your credit card may require a PIN to access a cash advance from an ATM.
Pros and Cons
Pros
- Provides quick access to unsecured funds—no collateral required.
- Easy to get—no underwriting or credit check involved.
Cons
- Extremely high fees.
- Credit card cash advances begin accruing interest on day one.
Alternatives
If you do find yourself facing a cash crisis and you’re not sure where to turn to, consider the options below. (Or have a look at Credit Sources here)
Self Financial Audit & Budgeting – When you know where your money is coming and going, you can adjust and prioritize accordingly based on situations, a shift to an active rather than reactive position.
Sell unused items – If you can afford to get a hold of cash without being in debt, and you have some sales skills to boot, then by all means consider selling the things you own that you have not been using and are just sitting in your home.
Loan from friends and/or family – Consider borrowing money from friends or family. This might be awkward but make sure you define the timeframe that you will pay them back and it can also be interest-free.
Bank Personal loan – If you have good credit, consider a secured or unsecured personal loan from your bank or from alternative financial institutions (credit firms, cooperatives ..etc..). The process for this is longer but if you need a larger amount of money, a personal loan could meet that need with less overall cost.
Is a Cash Advance Right for You?
Once again, ensure that you are eligible for a cash advance first before doing anything else. Although this is a legitimate use of a credit card as emergency funds, it is still highly suggested to consider all other options before using a cash advance strategy. But if you are really good at managing your money and debt, then cash advances may be useful for you.
Don’t forget to allocate a part of your income to pay for your obligations such as your credit card debt or cash advances. Be a responsible credit card holder and pay your bills on time to avoid penalties.
ALSO READ: 10 Things To Put On Your To-Do List When You Search For The Right Apartment
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