Understanding Cash for Credit Cards and Rewards

Cash for credit cards can be a confusing topic, but it's actually quite simple once you understand the basics.

Most credit card rewards programs offer cash back or points that can be redeemed for cash, merchandise, or travel.

You can earn cash back on everyday purchases, like groceries or gas, and some cards offer higher rewards rates on specific categories, such as dining or entertainment.

For example, a card might offer 3% cash back on gas purchases, which can add up quickly if you fill up regularly.

Some credit cards also offer sign-up bonuses, which can be a significant amount of cash, often in the form of a one-time payment.

Cash for credit cards is a service that allows you to sell your unwanted credit cards for cash.

You can get paid for your credit cards in various ways, including through online marketplaces, mail-in programs, and in-store kiosks.

Some services, like Cardpool, offer cash payouts for credit cards, while others, like Raise, give you gift cards.

The amount you get paid for your credit card is determined by its balance, expiration date, and the issuer.

You can sell your credit cards even if they have a balance, but the payout will be lower due to fees.

Some services, like Decluttr, take a fee of up to 15% of the card's value.

The process of selling your credit card typically takes a few days to a week, depending on the service.

You'll need to provide some basic information about your credit card, such as the card number and expiration date.

Some services, like NextWorth, require you to mail in your credit card, while others, like Coinstar, allow you to sell it in-store.

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Getting a cash advance can be a lifesaver, but it's not always a straightforward process. You can get a cash advance from your credit card issuer, usually by visiting their website or calling their customer service number.

Additional reading: Cash Advance from Credit Card to Bank Account

Typically, you can get a cash advance of up to 90% of your available credit limit. For example, if you have a credit limit of $1,000, you might be able to get a cash advance of up to $900.

You'll need to pay a cash advance fee, which can range from 3% to 5% of the advance amount. This fee is in addition to any interest charges that may apply.

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Taking out a cash advance may seem like a convenient solution, but it's essential to be aware of the potential drawbacks. Cash advances have many downsides to consider, including high fees and interest rates.

You'll typically be charged a one-time fee, in addition to a higher rate of interest on cash advances. This can add up quickly, making it harder to pay off the advance.

There's no grace period before interest starts to accrue on cash advances, unlike regular credit card purchases. This means you'll be charged interest from the moment you take out the advance.

Here are the major drawbacks to consider:

A typical cash advance APR is around 29.99%, which can seriously add to your debt if you carry a balance on your credit card from month to month.

Cash advance interest rates can be much higher than the interest rate your credit card issuer charges for purchases, and since cash advances don’t come with grace periods, that interest starts accruing right away.

You'll also incur a cash advance transaction fee, which may be a set dollar amount per transaction or a percentage of the total cash amount you're taking from your credit card account. Check your credit card terms for details on your card's fees.

No matter how you pay off the cash advance, you'll still pay interest each day you carry the loan, from the day you receive your cash advance to the day you repay the entire loan amount.

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Cash advances come with a hefty price tag, and that's due to the higher interest rates they carry. A typical cash advance APR is around 29.99%, which is significantly higher than the interest rate on regular purchases.

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You'll start accruing interest on the cash advance amount immediately, with no grace period to speak of. This means you'll owe more than the amount you borrowed by the time you receive your credit card statement.

The longer it takes to pay back what you owe, the more you'll pay in interest charges based on that higher APR. If you take $500 and pay back $50 per month, it would take you a year and cost you an additional $68 in interest as you pay it off.

These high interest rates can seriously add to your debt, especially if you carry a balance on your credit card from month to month.

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You'll pay a cash advance fee every time you get cash from a credit card. This fee is typically a percentage of the cash advance amount.

Typical cash advance fees range from 3% to 5%, or a minimum of $5 to $10, whichever is more. For example, if you take a $500 cash advance with a 5% fee, you'll immediately incur a charge of $25.

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The cost of a cash advance can be a real shock. A credit card cash advance typically incurs a cash advance transaction fee, which can be a set dollar amount per transaction or a percentage of the total cash amount you're taking from your credit card account.

You should check your credit card terms for details on your card's fees. The cash advance interest rate is often higher than the interest rate for regular purchases, and interest usually starts accruing the day you take the advance.

Many banks charge an ATM fee when you withdraw cash from their ATM, and some credit cards even have a separate fee for cash advance transactions. Foreign cash advances come with additional fees, including foreign transaction fees, ATM fees, currency conversion fees, and cash advance fees.

These fees can add up quickly, especially when you're traveling abroad and need to access foreign currency.

Additional reading: Flat Rate Cash Back Credit Cards

You can use your cash for credit card to make purchases online or in-store, wherever Visa or Mastercard is accepted.

To make a purchase online, simply enter your card details at checkout and confirm the transaction.

When shopping in-store, you can use your card to make purchases by swiping or inserting your card into the payment terminal, or by using contactless payment methods like Apple Pay or Google Pay.

Make sure to check your card's balance before making a purchase to ensure you have enough funds available.

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Using an ATM is a convenient way to get cash with your credit card. You'll need to contact your bank to establish a PIN, if you don't already have one.

To find a participating ATM, look for one that has your credit card's logo. This ensures the ATM is connected to your credit card network and can process your transaction.

Insert your credit card and enter your PIN code to access the ATM menu. Choose "cash withdrawal" or "cash advance" to proceed.

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Be sure to stay below your cash advance and credit limits when requesting cash. This will help you avoid any potential issues with your account.

Here's a step-by-step guide to withdrawing cash from an ATM:

You can also withdraw cash at a bank branch from a teller, but you'll need to show a government-issued ID to do so.

You can get a cash advance with any Discover Card from participating banks, ATMs, and credit unions.

This convenience is especially useful when you need cash in a pinch or for a specific purchase.

Convenience checks are blank checks your credit card issuer periodically sends in the mail.

You can use them much like a personal check to make a payment, but instead of the money coming out of your bank account, it gets added to your credit card balance.

Using convenience checks is a form of a cash advance, so you'd be subject to fees and a higher interest rate.

Shred convenience checks you receive and don't plan to use, then throw them away securely to prevent someone else from accessing a blank check tied to your credit card account.

This will protect you from potential security risks and identity theft.

A credit card cash advance can significantly lower your credit score, especially if you're already struggling financially.

One of the main factors that affect your credit score is the utilization ratio, which measures how much of your credit limit you're using. Your credit score could go down if you use up too much of your credit limit.

Late payments can also dramatically lower your credit score, as payment history accounts for 35% of your credit score. If you don't make the minimum monthly payment, the bank could put negative marks on your credit report.

High credit utilization can negatively impact your credit score, and it can also lead to high interest charges that put you deeper into credit card debt.

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Your credit card's cash advance limit is typically a percentage of your credit card's limit, which can vary by issuer. For example, it might be 30% of your total limit.

You'll need to have enough available credit for your cash advance to be approved. If you have a balance on your card, that reduces your available credit.

The cash advance fee will come out of your withdrawal amount, so you'll end up with less cash than you initially withdraw. For instance, a 5% fee on a $5,000 withdrawal would leave you with $4,750.

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Before taking a cash advance, it's essential to consider the potential drawbacks. There may be an instance where you need to take out a cash advance due to an emergency, but it's crucial to develop a plan to pay off cash advances as quickly as possible.

A cash advance typically comes with a one-time fee, which is in addition to the higher rate of interest on cash advances. This can quickly add up and make it harder to pay off the advance.

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The interest on cash advances starts accruing immediately, with no grace period like you'd have with normal credit card purchases. This means you'll start paying interest from the moment you take out the advance.

There are three major drawbacks to a cash advance, and understanding these can help you make an informed decision.

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You can only withdraw up to a certain percentage of your credit card's limit with a cash advance, which may vary by issuer.

For example, if you have a $15,000 credit limit, you might be able to withdraw up to 30%, or $5,000.

A cash advance fee will reduce the amount of cash you get, so you'll end up with less than you withdraw.

On a $5,000 withdrawal, a 5% fee would leave you with $4,750.

You'll also need to have enough available credit for your cash advance to be approved, so check your balance before making a withdrawal.

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You can redeem rewards from your credit card without any additional fees, but the type of rewards and how you redeem them may affect the process. Some credit cards offer rewards in the form of cash back, which can be redeemed at any time.

You can also earn cash back rewards on your credit card, but be aware that taking a cash advance will always incur a fee, unless you have a specific credit card that waives this charge.

Rewards Programs are a great way to get the most out of your credit card, but they can be confusing if you don't know how they work.

Some rewards programs offer cash back, which is a percentage of your purchase amount returned to you as a statement credit. For example, if you have a credit card that offers 2% cash back on all purchases, you'll get $2 for every $100 you spend.

Rewards programs can also offer points or miles that can be redeemed for travel, gift cards, or other rewards. If you have a credit card that offers 1 point for every dollar spent, you can redeem 10,000 points for a $100 gift card.

The best rewards program for you will depend on your spending habits and what you value most. If you spend a lot on gas, a rewards program that offers 5% cash back on gas purchases might be a good choice.

Redeeming Rewards can be a bit tricky, but don't worry, I've got the lowdown. If you have a credit card that offers rewards, you can usually redeem them for cash, gift cards, or other merchandise, but be aware that some cards may have restrictions or fees associated with redemption.

Some credit cards, like the PenFed Platinum Rewards VISA Signature Card, don't charge a cash advance fee, so you can get cash back without incurring extra charges.