How To Avoid The Credit Card Cash Advance Fee/Interest

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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How To Avoid The Credit Card Cash Advance Fee/Interest

Postby undutchable » Wed May 25, 2011 6:39 pm

I was so oblivious about credit card cash advance fees! So i have $1800 balance on my credit card. I am taking advantage of 0% APR so i just pay minimum amount each month. I try not to use up more than 30% of my credit limit, though.

Then i noticed there's cash advance interest that they charge me each month for a Money Gram transfer I did a few months back. I guess it qualifies under Cash Advance category.
It also charged me one-time transaction fee for $15.

In one of the tables it states that my Balance Subject to Interest Rate is $350 (which is more less the amount of my Money Gram transfer).
So my understanding is, until I pay off my cash advance, I will keep being charged interest on my credit card for Cash Advance every month. Am i right?

Now my question: if i pay it off $350 (apart from minimum payment each month), how do they know that it is for Cash Advance balance that I am paying?
Does they payment automatically erase my cash advance balance? (given the condition that it is bigger than Balance Subject to Interest Rate).

Thank you!

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Postby jeffysdad » Thu May 26, 2011 6:57 am

You need to contact them and ask them specifically how to pay off that balance. There may be a different payment address. I think they are required to allow you to pay this balance separately from your no-interest balance, but they aren't required to make it easy.
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Postby Mogul of Pineapples » Sat May 28, 2011 5:37 pm

If the cash advance has the highest interest rate then by law, your payments should automatically be applied to it first, before it is applied to any other balances, like purchases, with lower APRs.

Something to keep in mind is the credit card cash advance fees start immediately, because there is no grace period on cash advances. I think that might be what's happening here.
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Postby big37guy » Tue Jun 21, 2011 5:07 pm

The law is actually that any payments above the minimum are applied to the highest interest items first. Minimums can be applied however the credit card issues sees fit (straight to the lower interest).

By only paying the minimum, you are being charged interest on the cash advance every month. What's more, the interest you are charged on the cash advance is at the cash advance rate as well, which is why your balance subject to the higher interest has probably been steadily going up since the cash advance.

Pay the $350 above the minimum and the credit card company will have to apply it to the higher interest balance. Next month there will be some remaining interest due so pay above the minimum in that amount and you should be set.


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