Hey there, and welcome back to Money Matters Unplugged — the podcast where we break down financial topics in a simple, practical way.
Hey there, and welcome back to Money Matters Unplugged — the podcast where we break down financial topics in a simple, practical way.
Today, we’re talking about something that seems like a convenient lifesaver when you’re short on cash — using your credit card to withdraw money.
It’s quick. It’s easy. But here’s the catch: it can also be surprisingly expensive.
Whether you’re withdrawing cash directly from an ATM or using what’s known as credit card cashing — there are a few hidden charges that most people overlook.
So, let’s break them down one by one.
The Cash Advance Fee
First up — the cash advance fee.
Every time you withdraw money using your credit card, the bank applies a one-time charge known as the cash advance fee. Usually, it’s between 2% and 5% of the amount you take out.
Let’s say you withdraw $500 — your bank could instantly add another $10 to $25 to your balance. It doesn’t sound huge, but it’s money you didn’t plan to spend.
And here’s the thing — even if you use 신용카드현금화 services, this fee still applies, because your credit card company treats it the same way — as a cash advance.
So before you swipe that card, always check your terms and conditions to know exactly what that percentage looks like for you.
The Interest Trap
Next, let’s talk about the interest rate — and trust me, this is where things can get tricky.
Cash advances typically carry much higher interest rates than normal purchases — anywhere from 18% to 25% annually, depending on your card issuer.
And unlike regular purchases, there’s no grace period.
That means interest starts accumulating immediately from the moment you take out the cash.
Even if you repay the money just a few days later, you’ll still owe interest for that period.
So if you make this a habit, those small withdrawals can quickly snowball into a big pile of debt.
The Extra Service Charges
Now, here’s something many people completely miss — the service or processing fee.
Some credit card companies — and especially third-party 신용카드현금화 agencies — may tack on additional costs for handling the transaction.
This fee is separate from your cash advance charge. It’s usually a small percentage of the total, but combined with other fees, it can quietly increase your total cost.
So before you use any credit card cashing service, it’s smart to ask upfront: “Are there any extra service charges?”
Sometimes, those “small fees” aren’t so small when everything adds up.
The Late Payment Penalty
And finally — the one fee that stings the most — late payment penalties.
If you delay paying your credit card bill, especially after a cash advance, you’re hit with a late payment charge.
And remember, you’re already paying higher interest on that withdrawn cash — so a missed payment just makes things worse.
Even if you’ve used a 카드깡 service to get instant money, you still owe that amount to your credit card company. So, paying it back on time is non-negotiable if you want to avoid compounding your debt.
Conclusion
So, what’s the takeaway?
Yes, cashing out your credit card can seem like a quick fix during emergencies.
But it comes with several hidden costs — cash advance fees, high interest, service charges, and penalties for late payments.
The key is awareness.
Know the fees, read the fine print, and only use this option when absolutely necessary. Because the convenience of quick cash can easily turn into a costly mistake if you’re not careful.
That’s it for today’s episode of Money Matters Unplugged.
If you found this helpful, share it with someone who might be thinking of using their credit card for cash.
And don’t forget to subscribe for more tips on managing money the smart way.
Until next time — stay informed, stay smart, and spend wisely.