With cash advance from credit card there is no credit holiday like the way you do when u do purchases. This is because
- When u make cash advance the bank will be out of pocket and your interest rate on advance start charging from the date u take the money. No free holiday period.
- The interest rate charged is on a per month basis so dont get fooled that u are getting interest rate of 2 percent per month as an example
- For certain cards if u dont pay 100 percent on due date, apart from the entire amount which will be charged both purchases and cash advance even future purchases will be charged. Hence before u take out money in a absolute emergency check with the credit card issuing bank the details
It is NOT a good idea at all to take cash advance from credit card instead take a personal loan in case of need
When credit card dues spiral and get uncontrolled one of the options is to convert all the dues into a personal loan and cancel the card. This is because lower interest rate on personal loan and tenor of personal is higher so emi will be lower. As interest rates are as high as 24 percent pa
So be very careful. There are sales agents who offer cash advance against credit card amount saying there will be no processing fee etc. The rate quoted will be on a per month basis so dont fall for it
As they say there is always a loophole in everything. If you own a business and have a pos machine then u can swipe on this machine as a purchases, cash comes to ur business account. This will get u free credit period but note 2.65 percent or what ever commission the the credit card co will charge you will loose on the transaction. This practice is not recommended at all.
Still remember when credit card was introduced jewellers and electronic shops used to top up the bill will commission percent if u offered credit card during those days as margin was low for these business