Most credit cards give you the option of withdrawing a cash advance from your line of credit on your card. You just go to any ATM, and use your credit card to withdraw cash as if it were a debit card. This might seem like an attractive option—sometimes cash is just handier than using plastic. In theory, it seems like it should be the same as using your credit card to purchase goods for an equivalent amount. Unfortunately, people who use their cards to get cash advances while under this impression are in for a big shock.
Do you think you really know how to shop? How do you calculate how much you pay the next time you take a loan? Do you have a system whereby you know how much is it that you can afford the next time you buy a car or a house?
You just bought a car. The installment is around $650 a month and you are determined that you can afford to pay the installment. You calculated the interest rate, term of loan and depreciation value and you are very sure that you can afford to maintain the car. After six months driving your car, you feel the pinch of paying your installment and you have a lot of bills, parking tickets and fines that you have not settle.