Cash advances are helpful for people who need to make sure that they have a larger sum of money than normal before their paycheck. This money could be to pay the co-payment for a hospital bill, for auto repair expenses, or for any other emergency where you need to have cash available. However, cash advances are not always the right decision for your personal financial situation. Here are some questions that you should ask yourself in order to determine if you should get a cash advance or seek another method of payment.
1. Does the Business Require Cash?
The first thing that you want to look at is if the business requires cash. If they do, then you are going to have to get a cash advance. If they don't, then you have a few options. You can either choose to use a credit card to pay for whatever you need, or you can use a cash advance. To determine if you should use your credit card or get a cash advance, you are going to need to look at their respective interest rates. If the interest rate for your credit card is lower than that of the cash advance, then you should use your credit card because you'll end up paying less money overall. If the cash advance has a lower interest rate, go for the cash advance.
2. Can You Pay the Entire Loan Off Immediately?
Cash advances are essentially mini, short-term loans. However, sometimes cash advances have higher rates if you don't pay them off immediately. As a result, it's best to get a cash advance if you can pay off the entire loan in less than a month in order to prevent higher interest rates from kicking in. If you're not sure that you're going to be able to pay the entire loan off immediately when you're paid, then you might want to consider other financial options such as asking friends for a short-term loan or trying to open up a second credit card to pay the expenses.
3. Will the Item You Purchase Make or Break Your Career?
Finally, if the item you purchase is absolutely necessary for you to do your job, such as a new car battery, then go with the cash advance, no questions asked. If the item is a luxury item and you just want to get it when it comes out, rather that wait until payday, you might be better off financially if you wait.
For more information, talk to a company that specializes in cash advances, like The Money Place.
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