Avoiding Expensive Cash Advance Fees

Cash advance fees make these emergency financing options the most expensive loans on the market. Instead of agreeing to these high fees, use specific strategies to minimize the costs of gaining your immediate financing. Whenever possible, elect other types of loans to avoid the fees altogether.

Lowering Cash Advance Fees

There are two main sources of expense associated with cash advance loans. The first is the cost of interest rate. You can keep your interest rate lower through several strategies to reduce the size of your actual loan. Borrow only necessary amounts, and keep the principal borrowed as low as possible. For example, instead of borrowing the entire cost you will require to pay bills this month, implement a strict budget to cover any debt you can possibly incur on your own. Even paying for a $30 electric bill yourself instead of borrowing the money will save you a lot in interest.

A second strategy to keep fees low is to ensure you pay all your debts off on time. This is an important thing to do for all loans. It is particularly important on cash advance loans because of the extremely high penalties for being late on a payment. Cash advances rarely have a prepayment fee. If you have the money to pay off the loan early, then you should do so. If you are afraid you will be late, contact the lender immediately to set up a payment plan or new payment schedule. Your cash advance should be your highest priority debt, meaning you pay it before any other bill next month. The high interest rate on the debt allows it to take the top seat.

Cash Advance Alternatives 

Businesses and individuals alike can locate alternatives to most cash advance options. First, try to secure a revolving credit line. Revolving credit lines typically take the form of credit cards. Since these loan options are so flexible, they will allow you to spend money only when you are in need and keep low to no balance when you do not need the credit. While interest rates on revolving lines are high, they are not nearly as high as cash advance fees. Further, they are better for your credit score than the very high risk cash advances, which can actually drop your credit even if you pay them off on time.

If a revolving line is not an option, then use other methods to make necessary payments until you can make ends meet. Most doctor’s offices, utility companies and even landlords will permit you to have a late payment on occasion. You must contact the company first, and many will require you make at least a small deposit in order to avoid a late payment notice. The key is always to contact the creditor prior to the time the bill is due. Once the bill or payment has gone into delinquent or default status, creditors are less likely to negotiate options with you and more likely to assess fees or report you to a credit bureau.