NerdWallet: What’s a credit card loan? It’s likely cheaper and better than a cash advance—here’s how it works.

by | Feb 14, 2023 | Stock Market

This article is reprinted by permission from NerdWallet.  When you lack the money in your bank account to deal with an unexpected cost, a credit card cash advance is one way to get quick access to needed funds — but there are some major downsides. You’ll be on the hook for cash advance and ATM fees, along with interest that begins to accrue the moment you get the money.

And about that interest: According to data from the Federal Reserve of St. Louis, average APRs among cards that charged interest reached 20.4% in November 2022. That’s already pretty high, and in many cases, interest rates specifically for cash advances are even higher than that. In other words, that cash advance is going to cost you.  However, you may have other, less expensive options, thanks to credit card loan programs that let you borrow against your card’s existing credit limit — which is essentially what you do when you request a traditional cash advance. But unlike a cash advance, these newer loan programs have several benefits:
A fixed interest rate for the life of the loan. 

No separate loan application or credit check is required.

No fees in many cases, beyond your interest payments (or any potential late payments).

A transparent process that lets you see what options you’d be eligible for and what the monthly cost of each option would be.

New ways to borrow against your credit limit Among major lenders, both Chase
and Citi
offer these types of loans to qualifying cardholders. You can see what you’d potentially be eligible for by logging in to your account online or th …

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