A smart credit card cash advance method that you need to know: make the most of your turnover!
Have you ever encountered cash shortages during hard times? If you hold several credit cards, have you ever considered using credit card cash advance methods for cash turnover? Well, there is actually a better way to deal with your urgent needs than credit card cash advance.
The normal credit card cash advance method is certainly a quick option if cash turnover is suddenly needed. Additional supporting documents are not required and cash will usually be available within a week. Furthermore, your credit rating will only potentially affect the annual interest rate and repayment period if you apply for a new credit card. However, if you really are in urgent need of cash flow, you should definitely consider Reap—an even more convenient and more flexible payment platform. In this article, I will analyze and compare the advantages and disadvantages of credit card cash advance as opposed to Reap to help you make the most of your savings:
- What is credit card cash advance?
- How does Reap’s payment platform work?
- Top ten comparisons between credit card cash advance and Reap
- Method of cash remittance
- Interest rate and service charge
- Loan period
- When will the cash arrive?
- Maximum loan amount
- Documents to be submitted
- Can the repayment period be extended?
- Credit card cash advance vs. Reap payment platform: the TL;DR Guide
What is credit card cash advance?
Credit card cash advance allows you to turn your credit limit into extra cash, which can be used for short-term cash flow. As opposed to private loans, ordinary cards are cashed out according to the credit limit of the credit card itself, most of which do not require submission of income and identification. Compared to private loans, the amount you can get by cashing-out an ordinary card is less, and the upper limit is the current remaining credit limit of the credit card.
Similar to private loans, the limits and interest rates of each credit card are different. However, cashing out of ordinary cards is a pain. The credit rating of the cardholder is an approval condition, which means that if your credit score is not good, then your repayment rate and your loan amount will also be affected.
How does Reap’s payment platform work?
The Reap payment platform links to your credit card. In addition to being used as a daily payment method, you can also use the credit card transaction to pay large fees. This works even if the other party does not accept credit card payment or does not have a Reap account so that as long as they have a bank account, you can remit the necessary amount you need to pay your bills and fees with ease.
Top ten comparisons between credit card cash advance and credit card payment through Reap
1. Method of cash remittance
With the credit card cash advance method, cash will first be transferred to your bank account, and then you can use cash to repay other bills or payments. With Reap, you don’t have to wait at all. Simply set up the payment object in advance and it will be automatically transferred to the other party’s account within 3 working days for maximum convenience and efficiency.
2. Interest rate and service charge
When using the credit card cash advance method, you should pay attention to the actual annual interest rate of different banks and credit cards, with the average annual interest rate ranging from 3.76% to 10%. It is also necessary to consider whether there are any additional handling charges before cashing in the card. In addition, the annual interest rate will also be adjusted according to the credit rating of users.
On the other hand, Reap’s platform utilizes credit card transactions as a cash-out method. Therefore, there is no need to pay an interest rate when repaying within the interest-free repayment period of up to 58 days. Users only need to pay a service charge as low as 2.6%. After the exchange, the average monthly service charge is 1.3%.
3. Loan period
The repayment period for credit card cash advance payments varies in length, with the longest period extending up to 60 months. This all depends on the credit rating of banks and users.
Reap’s repayment period is relatively simple and can be calculated according to the longest 58-day interest-free repayment period of your credit card.
4. When will the cash arrive?
Normally, it takes about three to seven working days to check the amount and interest rate with the bank. If cash flow is needed urgently, more time must be reserved for waiting.
The procedures of Reap are relatively simple. In most cases, it only takes three working days to pay bills.
5. Maximum loan amount
In addition, the credit rating of users will directly affect the loan amount, interest rate, and repayment period.
But with Reap, there is no fixed maximum amount. For larger bills, you can even use several credit cards.
6. Documents to be submitted
Credit card cash advance does not require any supporting documents but only requires confirmation of the interest rate and amount with the bank.
The Reap platform requires users to upload the supporting documents of bills to be paid for examination before withdrawing funds.
No cash or other reward can be earned by the cash advance method. In contrast, as a result of Reap’s advance payment credit card transactions, users can directly earn their own Asia Miles or obtain a cash rebate.
8. Can the repayment period be extended?
The repayment period for credit card cash advances cannot be extended and the interest rate for overdue repayment is quite high. Using Reap, you can apply for installment payment to the bank for individual transactions, making the repayment period more flexible.
One of the problems of using ordinary credit cards to cash-out is that each card-issuing bank has its own annual interest rate and repayment period, which requires more of your time for comparison and consideration. The amount of cash that can be cashed out is limited by the credit limit of the credit card itself. The amount, annual interest rate and repayment period will also be adjusted according to the credit rating of the holder. Therefore, it is necessary to communicate with the bank when applying.
The fees and procedures of Reap are much more direct. Besides certain fixed procedures, there is no additional charge and your credit rating will not affect your cash turnover. Reap will also help you transfer the specified amount to the bank account of the designated recipient.
When using the cash advance method, banks usually have specific people handle and check the cash-out procedures.
When using Reap, users can log in and complete all procedures by themselves. Customer service is also available in case you encounter any problems.
Credit card cash advance vs. Reap payment platform: the TL;DR Guide
|Credit card cash-out method||Reap payment platform|
|Cash remittance method||Remittance to cardholder's bank account after approval||After approval, automatic transfer to payee's bank account|
|Interest rate and service charge||- Depends on the bank and credit card
- Average annual interest rate is 3.76-10%
- Or you need to pay a service charge
|- No annual interest rate
- Only 2.6% commission required
|Loan period||Depending on cardholder's credit rating||According to the credit card interest-free repayment period, up to 58 days|
|When will the cash arrive?||3 to 7 working days||3 working days|
|Maximum loan amount||The maximum amount is the maximum credit amount of the credit card||You can combine several credit cards to pay a large bill|
|Required documents||No supporting documents are required||If you need to upload supporting documents for paying bills, such as paying rent, you will need to upload the lease|
|Bonus||None||In most cases, you can earn Asia Miles or cash rebate|
|Can the repayment be extended?||No||You can apply to the bank for the installment payment|
|Limits||- Different card issuers have their own annual interest rate and cashing amount
- Personal credit rating will directly affect the annual interest rate and the repayment period
|- Credit rating does not affect the amount
- It is convenient to remit the amount to the bank account of the payment object on behalf of the user
|Programs||Bank services||Self-help; customer service can answer any questions you may have|
In critical moments, cash turnover requires careful consideration before action. Credit card cash advance can help you solve your short-term turnover problems quickly, but before you decide to use this method, it is important to know all the relevant details and your repayment ability. It’s better to compare the different cash turnover methods on the market to make the best plan for the present and the future.
Do you have more questions about how to solve the problem of enterprise turnover in an economic downturn? Register with Reap for free today for more wealth management and smart savings packages, and subscribe to our blog for the latest advice on SME management, cash flow, and other practical tips.