When you own a business, sometimes you need a lump sum of money and you need it as soon as possible. At times, access to working capital is imperative for the daily operations of your business, especially in these modern times. You could approach your credit card company for a cash advance, but be prepared to pay some heavy fees for your loan. Americard Payment offers a cash-in-advance program to our clients, so let’s explore this topic further.
What Is A Cash Advance?
Credit cards offer their members cash advances, which are basically loans that you can borrow up to a certain limit. Each card contains a different loan limit, but it is usually significantly lower than your credit limit. The upside to cash advances is that you can obtain cash quickly and easily by withdrawing it from an ATM or by filling out a convenience check that your credit card company could occasionally send you.
Why Cash Advances From Credit Card Companies Can Hurt You
Of all the ways to obtain a loan, credit card cash advances are one of the most expensive methods. In fact, you will be charged a large fee for your cash advance, which could be as much as 5% of your transaction. Additionally, if you use an out-of-network ATM, you will also have to pay ATM fees as well.
Not only is a significant fee involved, but you also have to pay a higher-than-normal interest fee for your cash advance. Unfortunately, credit card interest rates can be high to begin with, such as 12 to 15 percent APR, but cash advance interest fees could be as high as 24 percent!
Oh, wait! There’s more: when paying off your cash advance, you have no grace period in order to avoid paying any interest fees. When you make a purchase with your credit card, you usually have about a month to pay back the money without being charged interest. Unfortunately, that grace period is not available for cash advances, meaning that you will have to pay high interest fees no matter what (and that’s on top of your transaction fee).
Loans From Lenders
If you are in need of a loan, you could approach a traditional lender for money, but they may or may not decide to lend you the money.
Americard Payment’s Cash-In-Advance Program
Our payment solutions company offers a cash-in-advance program for our clients, which features a variety of benefits. Our program allows you access to a loan much quicker than a traditional lender because our company does not concern ourselves about the reasons you may be seeking a loan.
How It Works
You decide upon the loan amount that you need, and basically “sell” that dollar amount to our payment processing company for future credit card sales. We then send you the money in a lump sum of cash, and a small percentage is taken out of each future credit card sale until your cash advance is paid in full. Your monthly statements will provide details about your remaining balance, your account status, and how much money you received from each sale. Once the payment is fully collected, you are eligible for another cash advance if needed. In order to be eligible for our program, you must prove that you’ve been in business for over twelve consecutive months. You must also demonstrate that your monthly credit card transactions total more than $2500.
Are you interested in participating in our cash-in-advance program? Contact Americard Payment to learn more about our program. We also provide payment processing services, ATM machines, and POS equipment.