There are times when you just don't have enough money between pay checks to make ends meet and a cash advance fee is necessary. Or, an emergency situation happens and you do not have the funds to pay for it. This could include a medical emergency, your car breaks down or a utility service that is pending disconnection. A cash advance fee is charged mostly due to the convenience of the temporary loan.
The cash advance fee is not reimbursed to the borrower. It is a transaction fee that is built into the loan. The convenience of being approved for a cash advance, without a credit check, and minimal information from the borrower can be risky. It is a risk that these lenders are willing to take. The cash advance fee helps them to recover any potential loss if a borrower defaults or refuses to pay back the loan.
In these cases the cash advance fee can help cover collection or legal costs that are involved when the lender has to pursue more expensive means of collecting the debt. Also, this cash advance fee enables them to continue to turn around money and loans much quicker.
As the cash advance fee is paid, along with the initial amount borrowed, this money is then available to be loaned out to other consumers. When you consider the hassle, the time and all the paperwork involved in getting money from a bank, the cash advance fee is well worth it. Consider also that even after all the trouble and time you put in with the bank that they can, and usually do, reject your request. Banks have much stricter lending requirements.
Also consider the amount of overdraft, over the limit and non sufficient funds fees that banks can charge. When your checking or savings accounts get hit with these fees, they can add up quickly. You can be held under the weight of these fees for days, weeks or months until they are paid back.
The cash advance fee and loan can be paid back gradually, as you have time and money available. They can meet your timeline for pay checks as well as ability to flex it if necessary. If you know in advance that the funds to pay it back are not available, simply contact the lender and they will allow more time.
A cash advance fee is worth the rate when compared to your electric, water or gas being shut off. Not only will you have to pay the amount that is past due in order to restore service, but also a very large amount to re-connect it, or another deposit. It is also a major inconvenience to have to go through the re-connection process.
You should never delay medical or dental care, especially in emergencies, due to your inability to pay. A cash advance fee just might give you the financial peace of mind when dealing with a health related issue. It is worth the cost when considering being able to receive the care you need.
