Convenience Can Be Costly - Understanding Cash AdvancesWritten by James Dimmitt
You’ve just opened your credit card bill and attached to your statement you find a “convenience check” included. It may already be filled out with a dollar amount such as $300, $500, or even $1,000. Your mind fills with ideas of what you could buy with this “instant” money. A new summer wardrobe, a nice dinner and tickets to a concert, a weekend getaway. But before you go off on a shopping spree, you should be aware that your “convenience check” is nothing more than a cash advance on your credit card. Cash advances on credit cards carry many extra fees, often overlooked or misunderstood by consumers.
Here’s a quick look at types of fees most card issuers charge for a cash advance:
1) Upfront fee of 2-4% of amount advanced. On a $1,000 cash advance your fee will range from $20-$40 in addition to interest charges.
2) Higher interest rate than on purchases. Many credit card companies charge 18% or more on cash advances. In addition, most companies apply only a small percentage of your monthly minimum payment toward cash advance.
Some require that you pay down balance on your purchases first before applying payments to higher-interest advance. In other words, you’ll be paying fees and interest on your cash advance for a long time, especially if you only pay minimum payment.
Protect Yourself From ATM ScamsWritten by James Dimmitt
In this day and age, ATM’s have become a fast and efficient way of getting our hands on our money. But if you’re not cautious, automatic teller machine can also be a quick way for others to get their hands on it too.
Not long ago, ABC News ran a story showing how easy it was to collect account numbers and Personal Identification Numbers (PINs) from unsuspecting consumers. In their experiment, they set up a sign next to a banking ATM that offered to “clean” magnetic strip on people’s cards as a courtesy to their customers. The sign had a magnetic card reader attached to it so that people could swipe their cards to have them “magically” cleaned.
And how many people fell for it? You’d be surprised. In their experiment, more than half of people used special card cleaner before using it in ATM. Fortunately, this was only an experiment and no account information was actually transferred from “fake” cleaning machine.
But imagine what could have happened if this had not been an experiment but a scam by real thieves attempting to capture your personal information? I’m sure those unsuspecting customers in experiment would have been in for quite a shock next time they accessed their account balances!