Question about credit card cash advance

Don't do this. Borrow some money from a family member, get a second part time job, do whatever you can to NOT use cash advances to pay off minimum balances. It is a terrible cycle to get into where once you start digging it gets exponentially harder to dig out.

Credit cards are not a financial product to live off of.

Don't go down that path OP as it's like an addiction. Do it once and you will more than likely doing it again and again.

kr0zet wrote: ↑Don't do this. Borrow some money from a family member, get a second part time job, do whatever you can to NOT use cash advances to pay off minimum balances. It is a terrible cycle to get into where once you start digging it gets exponentially harder to dig out.

Credit cards are not a financial product to live off of.

mkl38s wrote: ↑Don't go down that path OP as it's like an addiction. Do it once and you will more than likely doing it again and again.

This and this. Back when I was a student and in a tight financial spot I took valuable items to a pawnbroker and got cents on the dollar for them. I did this when I could have taken a credit card cash advance, but knew that that was a dangerous slippery slope. Sell stuff, cut lawns, shovel snow, do whatever you need to do so you don’t have to do this.

I’ll say the same as everyone else, just don’t do it period.
On the other hand, I know it’s easy to say when we’re not you, and don’t know your situation.
If you need to take cash from a credit card, make sure you absolutely have no other choice.
Also realize, as already mentioned, there is no grace period for cash advances, and the interest rate is usually pretty high (22%-27%) depending on the card.
Keep this in mind, as the minimum payment will be all accrued interest, plus the regular minimum payment, whatever that is.
Also keep in mind that once you take cash from a credit card, you now appear more risky of a borrower with that credit issuer, and are at risk of having your credit limit reduced, or your account cancelled.
If your current credit situation allows, I’d suggest you try applying for a lower interest rate credit card, where you can borrow funds from at a much lower rate, usually between 8% and 14%.
As mentioned up thread, a line of credit would be the ideal avenue to borrow funds from, but if you’re considering borrowing from a credit card, then I assume you don’t have one.
And if you’re in a financial crunch, your credit may not be good enough to successfully apply for one.

I fully understand it's not a good idea. But there is no other choice for me right now., except homelessness. It is kind of a nuclear option. Appreciate the suggestions, but they don't apply to my situation.

I was just wondering whether it was possible, and where exactly the cash advance comes from...my CC limit?

Luzer123 wrote: ↑ I fully understand it's not a good idea. But there is no other choice for me right now., except homelessness. It is kind of a nuclear option. Appreciate the suggestions, but they don't apply to my situation.

I was just wondering whether it was possible, and where exactly the cash advance comes from...my CC limit?

Cash advance from your limit. But keep in mind, some companies allow you withdraw cash up to whole limit. Eg, if your limit is 5000, you can withdraw 5000. On the other hand, some companies only allow you withdraw a fraction of limit. Eg if your limit is 5000, then you can only withdraw 2500

Another thing is large cash withdraw is a risky behaviour for companies especially if your score is low, as a result, it could trigger limit decreases

Good luck

ml88888888 wrote: ↑ cash advance charges interest from the day you take the money out to the day you pay it back.

Also, I'm pretty sure any payments go towards grace-period balances (ie current statement purchases) before they go towards interest accruing balances (ie cash advance).

Luzer123 wrote: ↑ I fully understand it's not a good idea. But there is no other choice for me right now., except homelessness. It is kind of a nuclear option. Appreciate the suggestions, but they don't apply to my situation.

I was just wondering whether it was possible, and where exactly the cash advance comes from...my CC limit?

1. it's better than payday loan sharks, but...
2. do you have any "balance transfer" offers? If so, you can borrow from credit cards at promo rates. If not, see if you can get approved for a credit card with an intro balance transfer offer ASAP. Say your CC is with Bank Alpha, then go to Bank Bravo, Charlie and Delta and apply on the same day for their cards with balance transfer intro offers. Whenever approves you, you can transfer the debt to that card. I'm gonna assume that even $2-3k would keep you out of homelessness in the short term
3. some issuers have a cash advance limit inferior to your total credit limit and may apply it to balance transfers as well
4. There's a min monthly payment, so gotta keep up with that to not mess up your credit score

hvc wrote: ↑ Also, I'm pretty sure any payments go towards grace-period balances (ie current statement purchases) before they go towards interest accruing balances (ie cash advance).

I believe you are correct. This just makes cash advances even more insidious...

I don't know the OP's situation but if they are taking out cash advances for this months rent, what are they expecting to change before next months rent comes due?

Honestly OP, I hope for your financial sake you have a plan going forward and this is a one off situation that you need to make ends meet. No judgement, we've all been there and it sucks but just get a plan before you need to rely on this again.

hvc wrote: ↑ Also, I'm pretty sure any payments go towards grace-period balances (ie current statement purchases) before they go towards interest accruing balances (ie cash advance).

kr0zet wrote: ↑ I believe you are correct. This just makes cash advances even more insidious...

I don't know the OP's situation but if they are taking out cash advances for this months rent, what are they expecting to change before next months rent comes due?

Honestly OP, I hope for your financial sake you have a plan going forward and this is a one off situation that you need to make ends meet. No judgement, we've all been there and it sucks but just get a plan before you need to rely on this again.

Might be YMMV but my understanding is it's proportional.

Card balance is X:Y [Spend:cash advance] then payment will be distributed into the same ratio, say Payment P will go towards Card Balance B (or X+Y)...

1. Spend= P*X/B=P*X/(X+Y)
2. Cash advance= P*Y/B=P*Y/(X+Y)

Lolz my math is rusty. Someone lemme know if I messed up.

titaniumtux wrote: ↑ Might be YMMV but my understanding is it's proportional.

Card balance is X:Y [Spend:cash advance] then payment will be distributed into the same ratio, say Payment P will go towards Card Balance B (or X+Y)...

1. Spend= P*X/B=P*X/(X+Y)
2. Cash advance= P*Y/B=P*Y/(X+Y)

Lolz my math is rusty. Someone lemme know if I messed up.

It's proportional, same for BT

titaniumtux wrote: ↑

1. it's better than payday loan sharks, but...
2. do you have any "balance transfer" offers? If so, you can borrow from credit cards at promo rates. If not, see if you can get approved for a credit card with an intro balance transfer offer ASAP. Say your CC is with Bank Alpha, then go to Bank Bravo, Charlie and Delta and apply on the same day for their cards with balance transfer intro offers. Whenever approves you, you can transfer the debt to that card. I'm gonna assume that even $2-3k would keep you out of homelessness in the short term
3. some issuers have a cash advance limit inferior to your total credit limit and may apply it to balance transfers as well
4. There's a min monthly payment, so gotta keep up with that to not mess up your credit score

Thanks. I don't know what a balance transfer is, let alone whether I've been offered one. I'm with RBC. I don't think I would qualify for any new CC right now, as I am unemployed. I already tried to raise my LOC, (close to max now) but couldn't, and that was the reason.

Am fine financially for August, but will be short on rent for September. I am hoping I could just get a cash advance (i.e. transferring money online from VISA to checking account) for rent only and use my card for purchases. I would cash advance a little more than I need for rent, and then use the extra to pay minimum balance. As long as I pay my minimum balance will it affect my credit rating?

Luzer123 wrote: ↑ Thanks. I don't know what a balance transfer is, let alone whether I've been offered one. I'm with RBC. I don't think I would qualify for any new CC right now, as I am unemployed. I already tried to raise my LOC, (close to max now) but couldn't, and that was the reason.

Am fine financially for August, but will be short on rent for September. I am hoping I could just get a cash advance (i.e. transferring money online from VISA to checking account) for rent only and use my card for purchases. I would cash advance a little more than I need for rent, and then use the extra to pay minimum balance. As long as I pay my minimum balance will it affect my credit rating?

Ok. RBC hasn't really been offering BT's since the pandemic, so definitely apply for cards with intro BT offers elsewhere...on the same day. CIBC Select, MBNA Lakehead or TrueLine (if there's an offer), or others...You may want to check out this thread.... See the cards in OP (maybe not fully up to date) then read the last few pages to see what ppl are doing. You may also want to apply for a CTFS MasterCard, as it'll be your friend in sunny days and when the storm hits. They are generous with CLI's and give good BT offers to existing cardholders.

Also consider paying rent with credit card through GetDigs, RentMoola or Plastiq...won't be no fee, but you'll get the grace period.

You may be able to BT enough to shuffle your LOC balance. Time to get into the game. I learned BT's when I was in debt, and now I use BT's for passive income.

If you take 1k out for a couple months it will cost you about 40 bucks with the fee
If you're white knuckling it, go for it. Just make sure you pay it back quick or have some loot coming in the next couple months

Looks desperate to the cc issuer, so don't do it that much

titaniumtux wrote: ↑ Might be YMMV but my understanding is it's proportional.

Card balance is X:Y [Spend:cash advance] then payment will be distributed into the same ratio, say Payment P will go towards Card Balance B (or X+Y)...

1. Spend= P*X/B=P*X/(X+Y)
2. Cash advance= P*Y/B=P*Y/(X+Y)

Lolz my math is rusty. Someone lemme know if I messed up.

smartie wrote: ↑ It's proportional, same for BT

Maybe I was thinking the old MBNA BT stuff, I thought it was purchases first then 0% interest last, not proportional (ie promotion stuff gets paid last). And, I was pretty sure cash advances are treated the same but I guess I was wrong

hvc wrote: ↑ Maybe I was thinking the old MBNA BT stuff, I thought it was purchases first then 0% interest last, not proportional (ie promotion stuff gets paid last). And, I was pretty sure cash advances are treated the same but I guess I was wrong

A few years ago, when you pay your statement balance, it first went to the worst past due amount (usually also with highest interest rate), then second worst past due balance and so on. But later, most banks changed to proportional. Can't say all banks

Luzer123 wrote: ↑ Thanks. I don't know what a balance transfer is, let alone whether I've been offered one. I'm with RBC. I don't think I would qualify for any new CC right now, as I am unemployed. I already tried to raise my LOC, (close to max now) but couldn't, and that was the reason.

Am fine financially for August, but will be short on rent for September. I am hoping I could just get a cash advance (i.e. transferring money online from VISA to checking account) for rent only and use my card for purchases. I would cash advance a little more than I need for rent, and then use the extra to pay minimum balance. As long as I pay my minimum balance will it affect my credit rating?

You should look into balance transfers, but that's another story.
Regardless of what they are going to tell you (it's bad, don't do it, credit card debt etc), if you absolutely need that (food, rent etc), go for it. If you're gonna be short for your minimum payment as well, yes, you can use the funds you advanced to make your payment (same goes for a line of credit, if you have a $200 amount due, you can just transfer $200 line of credit -> chequing and then back chequing -> line of credit and you made your payment). Just make sure you are only taking out what's 100% a necessity and that you are not borrowing more than you will be able to afford to pay back with your projected income from the new job you are gonna find (interest accrues fast). Keep cutting your expense as much as possible until you get out of it.
Trying to apply for new lines when you're already almost maxed is only gonna make your credit worse (since you're probably gonna get rejected or have a low limit that's not gonna help much), so hold off on that if you can.

titaniumtux wrote: ↑ Ok. RBC hasn't really been offering BT's since the pandemic, so definitely apply for cards with intro BT offers elsewhere...on the same day. CIBC Select, MBNA Lakehead or TrueLine (if there's an offer), or others...You may want to check out this thread.... See the cards in OP (maybe not fully up to date) then read the last few pages to see what ppl are doing. You may also want to apply for a CTFS MasterCard, as it'll be your friend in sunny days and when the storm hits. They are generous with CLI's and give good BT offers to existing cardholders.

Also consider paying rent with credit card through GetDigs, RentMoola or Plastiq...won't be no fee, but you'll get the grace period.

You may be able to BT enough to shuffle your LOC balance. Time to get into the game. I learned BT's when I was in debt, and now I use BT's for passive income.

Wouldn't I simply get rejected trying to apply for a new CC when I'm unemployed and maxed out on existing credit?