Debt Reduction Advice | Debt Reduction Advice

It’s tempting, in February, to look toward cash advances as a way to escape the winter blues. Even if you don’t live in a state with a cold climate, February isn’t exactly the friendliest month. The holidays are long gone. The credit-card bills from them aren’t. And there’s little to look forward to after the Super Bowl. It’s human nature to desire a vacation, maybe a three-day trip to Las Vegas or a short stay at a nearby water park with the family, to chase away the blahs. Here’s the problem, though: If you can’t afford to take this trip right now, and pay for it in cash, don’t make the mistake of either paying for your lodging and entertainment with your credit cards or taking out cash advances to cover the costs. You may have fun on your trip, but you won’t be smiling once it’s time to pay back the money you borrowed.

Expensive Money

Cash advances have their purpose. So do credit cards, of course. But both of these financial vehicles are best used for financial emergencies. If your car breaks down when you’re miles from home, putting the repairs on your credit card is a sound financial move. If the electric company is threatening to turn off your power and your next paycheck is weeks away, a cash advance can help you keep the lights on. But both credit cards and cash advances are expensive. Credit cards come with an average interest rate of over 16 percent today, according to the Web site IndexCreditCards.com. And cash advances often come with high origination fees and interest rates. Neither is a cheap way to borrow money.

Emergencies Only

Cash advances, especially, should be reserved for emergencies only. And, no, a case of the February blues does not constitute an emergency. An emergency is when you have no money to pay for groceries, your car’s gas tank is empty and your next paycheck isn’t due to arrive for 14 days. An emergency is when your landlord wants your rent now, and is getting ready to post that eviction notice.

Fees Are Too High

Simply put, the fees associated with both cash advances and credit cards are too high to justify using them unless you absolutely have to. In a perfect world, consumers would buy everything with cash. Unfortunately, our world is far from perfect these days, what with the national unemployment rate still above 10 percent as February began. People, then, will need to rely on their credit cards and cash advances. Just make sure, though, that you only turn to these financial vehicles when you need them most.

It’s tempting, in February, to look toward cash advances as a way to escape the winter blues. Even if you don’t live in a state with a cold climate, February isn’t exactly the friendliest month. The holidays are long gone. The credit-card bills from them aren’t. And there’s little to look forward to after the Super Bowl. It’s human nature to desire a vacation, maybe a three-day trip to Las Vegas or a short stay at a nearby water park with the family, to chase away the blahs. Here’s the problem, though: If you can’t afford to take this trip right now, and pay for it in cash, don’t make the mistake of either paying for your lodging and entertainment with your credit cards or taking out cash advances to cover the costs. You may have fun on your trip, but you won’t be smiling once it’s time to pay back the money you borrowed.

Expensive Money

Cash advances have their purpose. So do credit cards, of course. But both of these financial vehicles are best used for financial emergencies. If your car breaks down when you’re miles from home, putting the repairs on your credit card is a sound financial move. If the electric company is threatening to turn off your power and your next paycheck is weeks away, a cash advance can help you keep the lights on. But both credit cards and cash advances are expensive. Credit cards come with an average interest rate of over 16 percent today, according to the Web site IndexCreditCards.com. And cash advances often come with high origination fees and interest rates. Neither is a cheap way to borrow money.

Emergencies Only

Cash advances, especially, should be reserved for emergencies only. And, no, a case of the February blues does not constitute an emergency. An emergency is when you have no money to pay for groceries, your car’s gas tank is empty and your next paycheck isn’t due to arrive for 14 days. An emergency is when your landlord wants your rent now, and is getting ready to post that eviction notice.

Fees Are Too High

Simply put, the fees associated with both cash advances and credit cards are too high to justify using them unless you absolutely have to. In a perfect world, consumers would buy everything with cash. Unfortunately, our world is far from perfect these days, what with the national unemployment rate still above 10 percent as February began. People, then, will need to rely on their credit cards and cash advances. Just make sure, though, that you only turn to these financial vehicles when you need them most.