01-07-2014 01:06 AM
01-07-2014 01:12 AM
Since it appears cc balances are reported to bureaus as of the statement date, can you show low utilization by paying a card down right before the statement date then taking out a cash advance right after the statement date?
You like paying fees? What are you trying to accomplish?
01-07-2014 01:13 AM
01-07-2014 01:14 AM
I wouldnt see where you couldnt do something like that, but i def would not do it myself. Because the APR is usually much higher for cash advance and it starts the date that you take it out in most cases. Could end up costing you a lot more money in the end.
01-07-2014 09:28 AM - edited 01-07-2014 09:29 AM
I was just referring to a situation where say you can pay your cc down to a $1000 balance on its statement date, but instead for a better score/lower utilization you pay it down to zero for the statement date, so you think you might need that $1000 in your chequing account until your next payday, you can simply take a cash advance for the next 10 days or so rather than leaving the $1k balance on your credit card. This way you can show zero utilization and the cost would only be interest on $1k at 10 days so about $5 so I'm not concerned about it.
01-07-2014 09:36 AM
There is typically a 3-5% fee for cash advances, so you'd pay $30-50 for the $1000. The fee is not refundable, even if you pay back the cash advance immediately.
The exception is the fee-free cash advances offered by various CU cards and USAA.
But even without fees, I don't think I'd recommend this approach. It might be better to use an LOC if you need to do this sort of thing.
01-07-2014 10:07 AM - edited 01-07-2014 10:08 AM
ok I wasn't aware of additional fees for cash advances above the interest rate, I dont think my card has that but I can double check.
I only think this approach is good if say you want to maximize your score next month because you know you'll be applying for something, and don't want to leave a balance on one of your cards and will be cash-short if you pay it off completely, you can simply pay it right before the statement date then withdraw the cash after the statement date. I think it would only cost a few bucks like I said, or even if there is a 3-5% fee if its a few tens of dollars it still might be worth it. I pay $40 a month just for my two credit monitoring subscriptions, so even if I had to pay something similar to maximize a score before an important app as a one-time thing I'd say its definitely worth it, to me at least