3) Cash advances normally carry no grace period. This means interest charges accrue as soon as you withdraw money or cash convenience check.

By law your credit card company must disclose any fees associated with a cash advance. The easiest way to find out what fees are charged is to carefully read your credit card statement or to call your credit issuer’s toll-free customer service number and ask questions.

Credit card companies charge these fees for two main reasons. One, to cover costs to process this transaction which are often higher than a regular credit card purchase. And secondly because of percentage of defaults among credit advance users. These costs are then passed along to you consumer in fees and interest rates associated with a cash advance.

The next time you are tempted to cash that convenience check or withdraw money from an ATM using your credit card, be sure you understand fees and long term effects of using a credit card cash advance.

A twist on this scheme is for crooks to place an “Out Of Order” sign on ATM and place a fake machine next to it. The fake machine has a card reader to collect account and PIN information but won’t actually dispense cash. The information collected is then transferred to a new card and used to steal cash from your account.

Another scheme involves inserting a thin clear plastic sleeve into ATM’s card reader. This prevents machine from being able to read your card and it will continually ask you to enter your PIN. The thief who installed sleeve is stationed nearby watching while PIN is input over and over. The victim finally gives up, thinking that machine has kept their card and leaves. The thief then retrieves card, enters memorized PIN, and takes out cash from victim’s account.

If you find anything suspicious about an ATM, report it to bank and to police immediately. Using a little caution with your ATM and credit cards will go a long way toward keeping you safe from ATM fraud.