Cash advance vs Balance Transfer

[gen-specific]

So apparently I've been thinking about this wrong

I thought the only way to get cash from a credit card was to do a cash advance, where each card had a cash advance limit separate from the general credit limit.

But now I'm starting to understand that a balance transfer is both cheaper and available for the entire credit limit. I had previously thought that balance transfers were only useful for moving limits to different credit cards with lower interest rates during promotional periods.

For illustrative purposes, lets take my American Express. This has a $30,000 credit limit, and a paltry $2,500 cash advance limit. This is the most extreme difference in limits that I have. With a balance transfer I could have $29,000 in a checkings account (with a 2-3% surchage) compared to $2,500 in a checking account with a 5% surchage + higher interest rate accrued daily?

I probably wouldn't have gotten the line of credit if I knew about this, but its interesting, if I understand it correctly.

Thanks. 

[compassion101]

Depends on the terms of the balance transfer checks. Some allow you to write a check to yourself and put it in your bank, others do not. Most of the ones I seem to get (Barclays, Discover, CapOne) do allow this

[LexieCat]

Yeah, each offer is different.  In fact, I've gotten different balance transfer offers for the same card.  Before you accept ANY balance transfer offer, read ALL the terms and conditions carefully, and if you have any questions about the offer, call CS.  Sometimes, for example, it isn't clear how new purchases will be treated once you have a BT.  Or even previous balances--I had used Apple's Barclaycard to purchase a Mac (using deferred financing) and found out that if I took a balance transfer the entire amount of the original financing amount would have to be paid off immediately to avoid interest on the original purchase.  So it pays to ASK first and not take advantage of any offer (no matter how good it looks) until you are POSITIVE you understand EXACTLY how it will work.

[takeshi74]

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@gen-specific wrote:

I thought the only way to get cash from a credit card was to do a cash advance, where each card had a cash advance limit separate from the general credit limit.

But now I'm starting to understand that a balance transfer is both cheaper and available for the entire credit limit. 

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Read the terms.  Cash advance and credit limit aren't always different.  BT's can't always be done for the credit limit.  Offers vary so you need to be aware of the specific details for the card you're looking at versus relying on broad, sweeping generalizations.

Also consider any BT fees.  If you BT to the limit you'll go overlimit with the fee.

Further, consider utilization.  Even with a BT 30% max still applies.  You don't want prolonged high utilization as that puts you at risk of adverse action.  You definitely don't want to max a card and leave it maxed or at high utilization for a long time.

[gen-specific]

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@takeshi74 wrote:

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@gen-specific wrote:

I thought the only way to get cash from a credit card was to do a cash advance, where each card had a cash advance limit separate from the general credit limit.

But now I'm starting to understand that a balance transfer is both cheaper and available for the entire credit limit. 

---

Read the terms.  Cash advance and credit limit aren't always different.  BT's can't always be done for the credit limit.  Offers vary so you need to be aware of the specific details for the card you're looking at versus relying on broad, sweeping generalizations.

Also consider any BT fees.  If you BT to the limit you'll go overlimit with the fee.

Further, consider utilization.  Even with a BT 30% max still applies.  You don't want prolonged high utilization as that puts you at risk of adverse action.  You definitely don't want to max a card and leave it maxed or at high utilization for a long time.

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okay thanks guys, yes you're right

I had called one CS after posting this and it is a hit or miss thing

[Imperfectfuture]

Interesting discussion, will be receiving my BCE by next week, with 0% BT for 15 minths. I DON'T think they mean for cash, but will read the terns and conditions when the stuff comes.

Don't have a high enough balance to transfer at this point in time.

[gen-specific]

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@Imperfectfuture wrote:
Interesting discussion, will be receiving my BCE by next week, with 0% BT for 15 minths. I DON'T think they mean for cash, but will read the terns and conditions when the stuff comes.

Don't have a high enough balance to transfer at this point in time.

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yeah I called AMEX about that card. They don't allow balance transfers to a checking account at all, and the only time you can balance transfer is during a promotional period, and then its just to the AMEX card

so "balance transfer" has like 5 different meanings each with at least 3 different implementations.

this has been educational, at least for me to know that I shouldn't have assumed I knew what it meant

[JSS3]

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@compassion101 wrote:

Depends on the terms of the balance transfer checks. Some allow you to write a check to yourself and put it in your bank, others do not. Most of the ones I seem to get (Barclays, Discover, CapOne) do allow this

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I was told by a Discover rep that they do not give BT checks. Their website also states you're not allowed to direct deposit into your checking online.

Cap1, Chase, Citi definitely allow BT checks into checking. Others have stated Barclays and BoA too.