Cash advances are sometimes the definite convenience of choice, especially when the need for the cash precursors an important event. Dinner at a favorite restaurant; getting those coveted movie tickets; being impromptu and taking a quick cruise around town. These are all reasons why you would find it necessary to have cash on you or at least quick access to cash to spend. Little conveniences like accessible ATM machines make being spontaneous and having both flexible and doable.
Possibly one of the biggest drawbacks to this ATM cash withdrawal spontaneity would be those often steep fees that come with withdrawing cash. Small ticket items like dinner out, or gas for a road trip may not require significant cash withdrawals. However there are some purchases and some situations that require you to access your cash in large sums. A cash advance transaction allows a person to withdraw cash from their bank accounts or ATM machines in large amounts. Very often however, a person would need to go inside of their financial institution to make a cash advance since it would be necessary to sign the appropriate paperwork before being given the money.
Cash advances are treated in many ways like small, personal loans, and often have a significant interest rate fee attached to them. Fees can vary significantly from one institution to the other, but they generally stay around the same percentage rate in order to stay competitive with other banking facilities. If an individual has a major credit card, he can use that card to make a withdrawal against the card and receive cash in a transaction. The convenience of using an ATM machine to access their credit line is what is so attractive for this type of convenience.
Using the credit card works essentially the same way that it does for the holder of a debit card. They simply insert the card into the ATM machine, enter their PIN number onto the keypad and continue with his transaction. Whether that transaction is to withdraw money or transfer funds, the transaction is handled just like a personal loan, and the person making the transaction would have to agree to the terms stated before they’re allowed to continue with their transaction.
Now, just because the convenience of the transaction is so simple does not negate the other things that have to be done before the transaction is complete. There is still the need for the banking system to verify that the funds that are requested are indeed available for the person to withdraw. This means, that if the person who is attempting to make the withdrawal does not have enough available cash in the account, they are denied access to the funds. The same thing of course happens with transactions that are going to involve moving money from one account to another or any variation of that type of issue. However, if the customer has allowed for another type of access service on his account, he can in fact withdraw the money if the requested amount is not available in his deposit account.
Making a cash advance, which is an advance against the person’s major credit card, can still access the cash withdrawal where the money is not readily available. The cash that is withdrawn is charged to the person’s credit card account and statement, and a date is set for the person to repay back the withdrawal amount.
Economic conditions have caused cash advances to steadily become a preferred convenience item, and banks and ATMs profit from that convenience with their fee policies. And although the fees can vary and can be somewhat high, that does not deter the need or preference for individuals to use that route.