Reply
Valued Member
johnnypinaz
Posts: 49
Registered: ‎04-16-2013
0

Cash advance VS. purchasing item for 2 times as much

I have a job in about 2 weeks. For the job I need to buy some equipment (music gear). If I buy new it is $1000. I can picked up the exact same item for $500 barely used. The job is going to pay around $2500 so I can pay off both immediately.

 

My question is, if I do cash advance there is a 3% fee plus 23% interest.

 

I always pay off everything right away so I dont understand interest charges. This is a Chase frrdom card.

 

So can someone please help me calculate, if I pay this off in 30 days how much is 23.9% (roughly) on my $1000??? I dont multiple 23.9% X $1000 do I? That would be roughly $300. The lady at Chase said it would be around $20 for the interest if paid off in 30 days. I dont get how that works. Can someone please expain.

 

PS... I dont have the cash or would just do that. But If I can save $300 or $400 by buying this thing used it will help me out a great deal.

 

Thanks ahead


Starting Score: 590
Current Score: 730
Goal Score: 750


Take the myFICO Fitness Challenge
Regular Contributor
broseph23
Posts: 150
Registered: ‎09-09-2012
0

Re: Cash advance VS. purchasing item for 2 times as much

The 23.9% is the yearly interest rate. Since you're paying it off in one month, you would be paying 23.9%/12 so roughly 2%. That's where the $20 came from. You should go for the used, that's totally worth paying the fee and interest charge.
Age: 22 | FICO: TU 757, EQ 736, EX 716 | FAKO: TU 751, EX 781 | Garden: 4/14 | Total History: 4yr 1mo | AAoA: 2yr 3mo | Util: 3%
........11500...............4000...............6000................7000................500..................5000................4500...............10000
Valued Member
johnnypinaz
Posts: 49
Registered: ‎04-16-2013
0

Re: Cash advance VS. purchasing item for 2 times as much

Perfect. Thanks for your help. I get it now

 

 


Starting Score: 590
Current Score: 730
Goal Score: 750


Take the myFICO Fitness Challenge
Valued Contributor
ryanbush
Posts: 1,299
Registered: ‎08-19-2012
0

Re: Cash advance VS. purchasing item for 2 times as much

the 3% fee on $500 would be an additional $15, still doing better than purchasing new though :smileywink:

Chase Sapphire Perferred | Chase Freedom | AMEX Platinum | AMEX Delta Platinum | AMEX SPG | Capital One Venture | Capital One Quicksliver | Discover IT | ABFCU Visa | Citi AA WEMC
Moderator
Shogun
Posts: 12,952
Registered: ‎04-15-2011
0

Re: Cash advance VS. purchasing item for 2 times as much

I agree with the above posters.  Would still be a substantial savings.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+