Within the limit allocated to the credit card, cash advance withdrawals can be made and the urgent cash need can be met in a very short time. However, the most important disadvantage of this effortless loan product is that interest rates correspond to contractual interest rates.
In this context, consumers are charged 5 thousand USD, etc. he must know how much he will repay when he withdraws the cash advance and once again consider how urgent this particular cash need is.
What is Credit Card Cash Advance?
It is possible to express the cash advance feature of credit cards in the simplest form by using the credit card limit as a credit. In this context, consumers who withdraw from the ATM to meet their cash needs within the limits of their credit cards should pay a set interest rate. It is not necessary to apply in advance or submit a document for cash advance usage.
How many installments with a cash advance can be withdrawn?
In accordance with the Bank Cards and Credit Cards Regulation, it was announced by the BRSA that cash advance withdrawals can be made in installments for a maximum of 12 months. In this context, consumers who withdraw cash advances are obliged to make a refund within a maximum of 12 months regardless of the amount.
How Is Cash Advance Interest Determined?
Almost all banks apply the contractual interest rate, expressed as the shopping or cash interest rate announced by the Central Bank, to customers, although the cash advance may vary depending on how many months the installments are made with installments.
Contractual interest rate refers to the highest interest rate applicable to banks or financial institutions operating in the market, excluding delay penalties. Therefore, it is necessary to know that the highest possible interest is the contractual interest rate.
Installment Cash Advance Calculation
The contractual interest rate announced by the Central Bank of Turkey for the year 2020 is 1.44% and in this context, the calculation has been made over this rate. Almost all banks allocate 1.84% interest for their customers’ cash withdrawals.
How much is refunded when 5 thousand USD cash advance is taken from a credit card.
Within this scope, consumers who withdraw 5000 USD cash advance:
- For a 2-month maturity, it should pay 2583 USD each month and a total of 5166 USD,
- For a 3-month maturity, it should pay 1741 USD each month and 5222 USD in total,
- For a 4-month maturity, it must pay 1320 USD each month and a total of 5279 USD,
- For a 5-month maturity, it is required to pay 1067 USD each month and 5336 USD in total,
- For a 6-month maturity, it has to pay 899 USD per month and a total of 5393 USD.
- For a 7-month maturity, it has to pay 779 USD per month and a total of 5451 USD.
- For an 8-month term, he has to pay 689 USD each month and 5509 USD in total.
- For a 9-month term, he has to pay 619 USD per month and 5568 USD in total.
- For a 10-month term, he has to pay 563 USD each month and a total of 5627 USD.
- For an 11-month term, he must pay 517 USD per month and a total of 5686 USD.
- For a 12-month term, he has to pay 479 USD per month and 5746 USD in total.
Banks may deduct interest rates for cash advance transactions to be made from credit cards from time to time.