Thinking of taking a cash advance on your credit card? There's something you need to know before punching in your pin.
There are surprise fees that you may not know about.
Consumer Joseph Seguna knows about the pitfalls of credit card cash advances.
"I took the max. I think it was $4,000, and they charged me 10 percent to take it," Seguna said.
Seguna spiraled downward into deeper debt.
"I was in a hole. Every month and it kept coming and coming," Seguna said.
Seguna ended up paying $6,000 on his $4,000 loan.
Cash advances on a credit card may seem like a good idea when you're in a pinch, but a new survey by CarditCard.com finds they are loaded with hidden fees.
"The longer you go without paying these off, the more interest you accrue," said CarditCard.com’s Matt Schultz.
CarditCard.com says with most credit cards, the advance fee is typically 5 percent. So on a $1,000 loan, with an average interest rate of about 24 percent (if you pay it off in a year) you'll end up paying almost $185 in fees alone.
Consumers may not even realize they're being charged extra.
Paper checks, ATM withdrawals, wire transfers, money orders, legal gambling purchases and bail bonds are also often treated as cash advances if paid through your credit card.
"You're charged interest immediately when you make these cash advance purchases as opposed to your regular credit card purchase," Schultz said.
Financial experts say while credit card cash advances are cheaper than payday day loans and more convenient than a personal loan, they're something you should avoid. They recommend you always read the fine print of your credit card agreement so you know which fees you'll be paying.