“How to Disable Cash Advances on Your Credit Card”

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Understanding Cash Advances on Credit Cards

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best financial decisions. For any mortgage service needs, call us at 213-732-3074.

Can You Turn Off Cash Advances on a Credit Card?

Cash advances allow you to withdraw cash against your credit limit at a bank, credit union, or ATM. While they can be useful in emergencies, they often come with high interest rates and fees. If you’re concerned about the potential debt from cash advances, you might want to disable this feature on your credit card. Contact your card issuer to explore your options, which may include disabling cash advances entirely or setting a minimal cash advance limit.

Why You Should Avoid Cash Advances

While cash advances can provide quick access to funds, they come with several drawbacks:

• High APR: Cash advances typically have higher interest rates than regular purchases.
• No Grace Period: Interest starts accruing immediately upon withdrawal.
• Cash Advance Fees: These fees can range from 3% to 5% of the amount borrowed.
• ATM or Bank Fees: Additional fees may be charged by financial institutions or ATM owners.

For example, a $1,000 cash advance at 25% APR with a minimum monthly payment of $31 would take 55 months to repay, costing you an additional $729 in interest and fees.

Alternatives to Costly Cash Advances

Instead of opting for a cash advance, consider these alternatives:

• Emergency Fund: Use your savings to cover unexpected expenses.
• Friends and Family: Borrowing from loved ones can be more cost-effective but ensure clear repayment terms.
• Due Date Extension: Request an extension on your bill’s due date to align with your paycheck schedule.
• Personal Loan: Personal loans often have lower interest rates compared to cash advances.
• 0% Introductory APR Credit Cards: If you have good credit, you may qualify for a card with a 0% introductory APR, allowing you to make interest-free purchases for a specified period.

Impact of Cash Advances on Your Credit

While a cash advance itself doesn’t directly affect your credit score, it can increase your credit card debt, impacting your credit utilization ratio. This ratio is a significant factor in your credit score. Strengthening your credit can help you qualify for lower-interest loans in the future. Start by accessing your credit report and score for free to get an overall picture of your credit health.

For more personalized mortgage services, contact O1ne Mortgage at 213-732-3074. We’re here to help you make informed financial decisions.

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