“Hidden Cash Advances: Transactions You Should Know About”

“`html

Understanding Cash Advances: What You Need to Know

At O1ne Mortgage, we prioritize educating our clients about consumer credit and finance. This post aims to provide an objective view to help you make informed decisions. For any mortgage service needs, feel free to call us at 213-732-3074.

What is a Cash Advance?

Many credit card issuers allow you to use your credit limit to access cash, known as a cash advance. This is generally more expensive than using your credit card for purchases. Certain transactions are also considered cash advances, such as depositing a convenience check or purchasing a money order. Understanding these transactions can help you avoid unnecessary fees.

Transactions Considered as Cash Advances

1. Using a Convenience Check

Credit card companies may send convenience checks in the mail. Using these checks to transfer a balance or get cash in your bank account is treated as a cash advance.

2. Buying Lottery Tickets or Gambling

Purchasing lottery tickets or gambling is often treated as a cash-equivalent transaction by credit card issuers. This includes online gambling, race track wagers, and casino gaming.

3. Buying Foreign Currency

While making purchases in other currencies is generally fine, buying foreign currency or cryptocurrency with your credit card is considered a cash-like transaction. Use a debit card or cash to avoid cash advance fees.

4. Wire Transfers

Using a credit card for wire transfers is treated as a cash advance because you’re using the issuer’s funds to transfer money.

5. Money Orders

Purchasing a money order with a credit card is considered a cash advance. Some locations may require you to take out a cash advance first.

6. Person-to-Person Money Transfers

Sending money through apps like Venmo, PayPal, or Cash App using your credit card may be considered a cash advance by your card issuer.

7. Overdraft Protection

Using your credit card for overdraft protection is treated as a cash advance since the issuer is transferring cash to prevent overdrafts.

Frequently Asked Questions

What Is a Cash Advance?

A cash advance allows you to use your credit limit to access cash, often at a higher cost than regular purchases.

How Much Does a Cash Advance Cost?

Cash advances typically come with high interest rates and fees, making them an expensive option.

How to Avoid a Cash Advance

Avoid using your credit card for transactions that are considered cash advances. Use debit cards or cash instead.

The Bottom Line

Without understanding cash-equivalent transactions, you might unknowingly use your credit card for a cash advance. Even when convenient, cash advances are not a cost-effective way to use your credit card. For more affordable financing options, check your credit report and score to build a positive credit history.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

“`