If you hold a credit card, you likely receive an offer in the mail on monthly basis for a credit card cash advance.  It’s tempting to use one of their checks – or, to go to an ATM to get a credit cash advance on the spot – but each comes with extra costs.  Know before you borrow:

• Fees from a credit cash advance can vary, but in all cases they add up.  Typically, a fee of 1% to 4% is charged, but often a flat fee is added to that amount.

• Grace periods are eliminated in credit card cash advance loans.  In other words, make a purchase with a credit card (cash advance not your objective) and somewhere between one and 30 days can pass without a charge.  Credit cash advance interest begins to accumulate on the first day – and borrowers who are late with payments end up paying upwards from 20% interest, in addition to late fees.

• Use your card for a credit cash advance at an ATM and you end up paying even more to the bank that owns the machine.

• The only advantage over a payday loan may be about 24 hours – credit cash advance loans may arrive immediately from an ATM (see previous paragraph), whereas a payday loan takes one business day from application to transfer electronically into your checking account.  But even this advantage is eliminated if the credit card cash advance is made by hardcopy checks – the kind you receive in the mail.  These need to be physically presented to your bank, then cleared before being available for use, a delay of several days in most states.

Payday loans come with their own fees, clearly spelled out upfront.  Opt for an online payday loan company where the terms are spelled out on their website – providing clear points of comparison and differences from credit card cash advance offers.  Other online payday loan advantages: easy application, privacy, security and customer support.

An informed borrower can save significantly from understanding these differences.