Credit card users 'should try to avoid cash advances'

Mozo

Monday 14 March 2011

Credit card users have been advised to try not to withdraw cash with their plastic on a regular basis.

'Avoid cash advances on credit cards'

Speaking to News.com.au, financial analyst Peter Arnold said individuals – including those who want to compare credit cards online – should consider only using their plastic to make direct purchases.

He explained that cash advances can incur interest that is up to ten per cent higher than the usual card rate and this is often charged immediately.

"A cash advance is a way of getting hold of money in an emergency or when other accounts are empty but the practice is fraught with danger, particularly if you are making a habit of it," he warned.

Aussies considering going online to compare credit cards might also want to heed his advice about interest-free periods.

The expert noted that it is important to be aware how many interest-free days are available on a card and to work out when payments need to be made.

This comes after frequent flyer points collector Alana Wright told the Sydney Morning Herald that she tries to compare credit cards every three years to ensure she has the best deal.

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