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Understanding Cash Advances: Charges and Impact on Credit Balances

Learn how to calculate total finance charges on cash advances and credit card balances with cash advances. Understand the high fees and APR associated with cash advances. Practice examples provided for better comprehension.

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Understanding Cash Advances: Charges and Impact on Credit Balances

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Presentation Transcript

  1. Chapter 4, section 4 Cash Advances

  2. I can… • Calculate total finance charges on cash advances. • Calculate credit card balances that include cash advances.

  3. So what’s a cash advance? • When you get cash from an ATM using your credit card, or by using checks provided by the credit card company. • Charges for cash advances are HIGH!!! There is usually a fee and the APR is higher for a cash advance than for purchases. • Periodic charges begin on the day you withdraw money and there is NO grace period! • Example 1 • Check you understanding A & B

  4. So what happens if I make purchases & get a cash advance? • You must calculate your finance charges separately because the rates for each differ. • Example 2 • Check your understanding C & D

  5. Let’s practice • P. 151, 10-17

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