When you’ve depleted your savings and need cash urgently, a cash advance can give you quick access to emergency dollars. The problem, however, is that this is an expensive way of borrowing and you should avoid it unless you have exhausted all other borrowing options.
If you have a Bank of America credit card, you can use it to get cash in several ways. Read on to find out how to do this and things to keep in mind before withdrawing cash from a credit card.
What is a cash advance and why is it usually such a bad idea?
A cash advance is a type of credit card transaction that allows you to take cash against a line of credit. It’s like getting cash from a debit card, only more expensive. Cash advance conditions can make such transactions very costly.
Sky-high interest rates
What are the disadvantages of cash advance? First, you will pay much more interest on such transactions. Annual cash advances are generally higher than payments made by credit card providers.
No grace period
You also don’t get a grace period on cash advances (another difference from regular credit card purchases). Instead, interest starts accruing immediately.
Compare this to the traditional purchase of a credit card. If you charge $400 for a new laptop, you won’t have to pay any interest on that purchase as long as you pay it off in full by your card’s next due date. However, if you take a $100 cash advance, your card provider charges interest on the transaction immediately.
Expensive fees
There are expensive fees to keep in mind with a cash advance. Bank of America charges an interest rate ranging from 15.99% to 28.99% per annum if you withdraw a cash advance with a check, and this percentage is generally higher if you withdraw a check from an ATM.
In addition, Bank of America also charges a fee of $10 or 3% (whichever is greater) on the amount you withdraw if you withdraw by cash check or $10 or 5% (whichever is greater). whichever is greater) of the amount you withdraw if you withdraw cash from an ATM.
That’s why it’s best to avoid getting cash from a credit card. Explore all other options before moving on to cash out so you don’t strain your budget with interest and fees skyrocketing.
Consider other cards
Please note that some credit cards have a significantly lower annual interest rate than what is charged on a Bank of America card. For example, the PenFed Power Cash Rewards Visa Signature®* card only charges 17.99% per annum for this type of transaction. It’s still expensive, but also doesn’t charge any cash withdrawal fees.
However, if you find that a cash advance is indeed the best option for your situation, there are several ways to get it from Bank of America.
How to get a cash advance from Bank of America
Bank of America offers four cash advance options. Choose the most convenient for you:
Go to Bank of America Branch
You can request cash pickup in person at your local Bank of America branch. Be sure to bring your Bank of America credit card and government-issued ID to verify your identity.
Use an ATM
You can get a cash advance with a Bank of America credit card at any ATM with the Visa and Mastercard logos. You will need a PIN to use your credit card for this type of transaction, and you can request one through your online account or by calling the number on the back of your card.
Get a convenient check
Another way to get cash with a Bank of America credit card is to use a convenient check. A convenience check works like a regular personal check that withdraws funds from your checking account, but a convenience check allows you to withdraw money from your line of credit.
Banks sometimes send convenience checks as incentives, but if you don’t receive one from Bank of America, you can contact the issuer to request one.
Deposit cash into your checking account
Probably the most convenient way to receive a cash advance from Bank of America is to transfer the funds directly to your checking account. Log in to your online account to request a cash advance. The deposit usually takes up to three business days.
Alternatively, for an additional fee, you can use the same day transfer option to send money to your Bank of America checking account.
Not all cardholders are eligible to use the deposit feature. If you attempt to request a cash advance this way and receive a message that the transaction could not be completed, the issuer suggests calling to discuss your options.
What to look for before getting a cash advance
While Bank of America makes it easy to get cash from your credit card, it’s important to know how much cash out can cost you before using this option.
Consider other options for obtaining a loan. You can apply for a personal loan which comes with a lower interest rate. You can also contact your bank or credit union directly, or look for online lenders.
An even better option might be a favor from family members or friends who are willing to give you a loan. Just be sure to pay off your loan on time so you don’t risk ruining your relationship.
However, the best bet is to create an emergency fund that will contain up to six months of daily living expenses. This way, if you run into a financial emergency, you can use your emergency fund instead of resorting to expensive loans.
bottom line
There are several ways to get a cash advance from your Bank of America credit card, but this is an expensive form of debt. It is better to consider this option as a last resort and work on creating an emergency fund so that you do not need it in the future.
*All Visa Signature PenFed Power Cash Rewards card information has been independently collected by CreditCards.com and has not been verified by the issuer.
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