What You Should Know About Direct Cash Advances

Direct cash advances are convenient ways to access funds without a bank account, but they can also be expensive. Make sure you have enough available credit to pay off the amount owed and understand the fees before taking out a cash advance. While the amount owed on a cash advance is a fixed percentage of your overall credit line, interest charges begin accruing immediately. It is also important to understand how the cash advance works and to consider other options. If you are a merchant, you may want to consider using another option.What Is a Credit Card Cash Advance?

Direct cash advances are different from payday loans, auto loans and other forms of online financing. A cash advance is a small loan obtained in minutes and is not tied to a consumer’s next paycheck or a check deposit direct cash advances. Consumers with bad credit typically use direct cash advances in emergencies when traditional loans are not possible. Direct cash advances carry high interest rates, but they do fill a vital need for online consumers. If a credit card advance had turned out to be a bad deal, a consumer could face severe consequences.

Merchant cash advances are short-term loans made possible through a merchant’s credit card sales. A merchant cash advance can be as much as 20% of the business’s available credit limit. Because the money is automatically withdrawn from the business’s credit transactions, slow months won’t impact their ability to repay the loan. Additionally, the funds are typically available in as little as a few days. It is essential to understand the costs and risks involved with a merchant cash advance before committing to one.

Another important aspect of merchant cash advances is their interest rate. Unlike traditional loans, merchant cash advances are not subject to many regulations or interest rate caps. They are often tied to an extremely high annual percentage rate. Also, they may include terms that bind your business to certain restrictions. You might not be able to switch credit card processing companies, change locations or revise your hours of operation without paying a higher APR. If you are unsure of which type of merchant cash advance is right for your business, you should contact a merchant cash advance company and request more information.

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