It is very common that, in times of holidays and the end of the year, many find themselves with the budget in negative and look for a way to obtain extra money to cover the missing expenses.
One of the most popular options for most is to withdraw cash from the credit card, this because the money can be obtained quickly, because they only need to go to a cashier and withdraw it, without having to present documents or queue. However, despite how easy it may sound, withdrawing money from the card is one of the most damaging decisions you can make for your finances, and these are three reasons that explain why:
Has a different interest rate
Something that many people do not know is that, when withdrawing money from the credit card, the interest rate that is applied is different from that of purchases; In fact, it is higher, which ends up generating more interest. In addition, additional fees are usually charged, which makes the money you are withdrawing out much more expensive.
Online loans are cheaper. You may decide to withdraw money from your card because you need it urgently, but given that, online loans are a quick option and will cost you cheaper. Many fintech are dedicated to making these types of loans and the procedure is faster than with traditional loans, so it is an alternative to consider.
You generate a bad habit
Due to the ease in obtaining cash, many people begin to see the use of the credit card for this as usual, deeply damaging their finances, since they are using money that cost much more expensive than previously thought.
The best thing you can do is organize your expenses in time to request the correct options and those that protect your economic situation. Also, remember that if your credit card is not offering you the right rates or the right benefits, you may find a better option in the market, and for that, the ideal is to compare the alternatives. You can do it by entering Kloey Lewistons.