Make a cash advance with credit card It is a way to get out of emergency situations or to have capital for intervention, for certain users. However, not knowing the mechanisms of progression is considered bad financial practice because of the negative consequences it can have.

The first thing you should know is that your credit card hasthe deadline by which you can settle your obligations for the month. After that date, they start to accumulate interest due to a late payment and end up paying more money than you originally owed.

Snowball or avalanche? Four strategies for paying with a credit card

This may not be a problem at minimum values, but the more money you owe and the longer it lasts, you will end up paying more interest.

The same thing happens with credit card cash advances. Banks charge about 15-20% interest for each advance, so if you withdraw $100, you would end up paying $120. The value will increase depending on how many months you postpone the loan.

‘Incentive system, but criminal’: this is how credit card theft works in Ecuador

How to responsibly give a cash advance

Before you ask for an advance, consider whether the occasion justifies it. Many users tend to make advances every month to cover last month’s debt, which becomes counterproductive to keeping their finances stable.

If it is an emergency or if you are sure that you will be able to repay the money to the bank, proceed with the advance payment.

‘A cyber attack can be as simple as a malicious email’: Diego Beltrán, cyber security expert

Note that when you apply, you will be informed of the interest rate and you must choose how long you can pay it. It is desirable that, within its possibilities, Choose a shorter term to pay less interest.

Once you’ve made progress and resolved the emergency, make a plan to pay off the loan. Consider paying as much as you can each monthto get out of debt faster.