Credit cards are one of the most useful tools today. Among the many facilities they grant us; we have the convenience of making credit card cash withdrawal
Although it is not the only one of the options that it facilitates us; It is undoubtedly one of the favorites for its practicality. However, we must be careful with this modality.
A credit card cash withdrawal is not even close as using the plastic to make a purchase.
Therefore, today we are going to show you some of the disadvantages of this action; so that you can know what you are exposing yourself to do.
You are borrowing money from the bank
Cash withdrawal from a credit card is not like having your money in the debit card. In the latter, liquidity is available. In the case of the credit card, you ask the bank to approve that amount in a liquid way. For this transaction to take place, the bank will charge you up to 10% of the total amount to be financed in advance. Banks justify this by explaining that since there is no copper at the point of sale of trade, the interest rate is not generated.
There are daily interests
Although some cards offer you the “comfort” of not charging commission for the withdrawal, they have other strategies in mind. It’s about the daily commissions.
Therefore, they generate an interest charge from the day the withdrawal was made, until the day you cancel the total amount.
Payment Cascade Scheme
When canceling the amount of your credit card cash withdrawal, you should monitor your card accounts very well.
If you have any balance of it committed to purchases, prior to withdrawal, and start to inject money into the card in the hope of paying off the debt, it will not work.
Credit cards work with a waterfall scheme. This means that, any sum of money that enters, will happen to pay the debt that you have pre-established. It will not be until you pay everything you owe on purchases, that you can start paying the cash loan.
This means that, until you cover all your debts, you will not be able to request more money.