This is good for any time you need cash without asking your credit card company for a cash advance. Credit cards have 2 APR’s, one for purchases and another one for cash advances. The APR’s for cash advances are much higher than for purchases. There are sites out there that offer this for a fee, making a charge for cash for a purchase and giving you the cash for it.
They make a cut out of sending you a check, at the same time charging your card for the cash. For example, if you are going away on vacation, let’s say you need 400 dollars spending money. If you asked your credit card for a cash advance, at the end of your billing cycle you would have to pay 481 dollars back at 20% APR. This is just an estimate, so it could be more with other fees padded to the 481 like ATM fees and other fees. This is because the credit card company is giving you a cash advance at the cash advance APR and this is a cash advance purchase and not a normal merchant purchase.
An example is if you place an order for a 400 dollar cash gift, they will charge your credit card for 430, 400 dollars cash for you and charge you a service fee along with it. So at the end of your billing cycle, this charge will appear as a purchase, and not a cash advance. So depending on your normal APR, you can pay the amount in full at 430. By doing this not only are you getting the cash at a normal Credit card APR rate, but you are also gaining points depending on the program you are signed up at with your credit card. And if you are gaining points, you may be eligible to get cash back from your credit card company so you will recover your fee through your credit card company. You are getting probably going to get charged 3% for the amount as well as 15.9 % APR from the time you get the money in your hands. So the interest in a cash advance adds up until the end of your billing cycle.
Aside from these charges, the cash advance has no grace period so the interest starts accumulating right away. If you use the services from one of these websites, you don’t have to worry about all these fees, all you have to worry about is your present APR because you are making a cash gift purchase plus the fee for the dollar amount. I’ve done this every time I’ve gone on vacation to get extra cash money to spend as well as when I take trips to Atlantic City.
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