Cash advances very bad for credit rating?

EliziumX

I sat in the bank yesterday going over my credit file and my account manager told me this:

'Although you've not missed any payments on any of your credit accounts you have a cash advance on your credit card in June which makes banks think you're desperate for cash.

Lloyds bank for example will refuse you a loan even if you only took £10 as an advance in the last 2 years.'

This seems crazy, is this true? Or is the account manager misinformed?

My credit card has every month as 'satisfactory' since it was new.

(As for the advance I believe I forgot my cash card on a night out and needed some money.)

What if I take an advance abroad because the machine won't take my cash card?

Extremely worrying and seems almost underhand - surely there should be very clear warnings on your statement that doing this can affect your credit file.

Marricked

I work for a credit card company and have never heard of this before, but I see why companies would look down at cash withdrawals, as alot of people who withdraw cash on credit cards havn't done so in the same circumstance as yourself, but because if someone is withdrawing cash on their credit card it indicates they have low funds in their bank account. If they are just managing to pay their credit cards minimum payment how will they manage to pay additional payments off a loan?

I can't see it been a problem though, as it is clear in your case it was a one off situation, if you do get refused for that reason, you could always appeal it

Chris

hax_2

Barclaycard, Capital One, GE Money, HBOS and MBNA share this data:

http://www.ukpayments.org.uk/media_centre/press_releases/-/page/698/

henrik1971

A bit shocking in some ways, but good to know all the same.

I bought my last two cars in in 2004 (£750) and 2008 (£850) using cash withdrawals on two credit cards. Both times set it up so that a few weeks later the balances were transferred onto a third card at 0%, so thought I'd been clever. In truth it worked out fine. Good cars, quick cash and no interest (other than the small amount of commission you pay when getting cash from an ATM).

S'pose from now on, just need to plan it a bit better. Use my visa card for all my monthly spending and then use the unspent money in my current account to finance these sorts of purchases.

Then again, I could just save up!

Joe_Bloggs

This kind of behaviour could occur if your main debit cards that you normally use for ATM cash withdrawals is lost, faulty, out of date, a victim of fraudulent behaviour, or a suspect transaction. You could be stranded in a distant location and your debit card facilities have been suspended due to apparent irregular spending activity due to your present location.

It is always good to have a back up plan should the !!!!!! hit the fan. I have a modest personal collection of ten and twenty pound notes for use in emergencies. Why are five pound notes so hard to find these days ?
J_B.

henrik1971

Joe_Bloggs wrote: »

It is always good to have a back up plan should the !!!!!! hit the fan. I have a modest personal collection of ten and twenty pound notes for use in emergencies. Why are five pound notes so hard to find these days ?
J_B.

I have a friend who says exactly the same thing. He collects them whenever possible.
I think cash machines should dispense fivers a lot more, like they did back in the 1980s. So many ATMs that I use now only have £20 notes in, and you know what they say about once you break into a note, the change, however much it is, just seems to evaporate, but you're never quite sure how.

The banks are learning from the Vegas casinos. If you use an ATM inside a casino, the minimum withdrawal is $100, and I think you get like 2x50 dollar bills.

gedebage

I don't think getting a cash advance will affect your credit rating or the way credit card suppliers will assess you.

The reason I say this is that my wife who has only joined me here in the UK during the last 12 month did not have any credit rating. She applied for a Barclaycard in her own name and was approved and given a £1500 credit limit.She uses the card a lot and has never paid the balance in full, however she does make her payments on time and always over the minimum payment required.

A couple of months ago she withdrew £200 cash using her credit card. I was a bit annoyed with her as I thought it may affect her credit rating in the future. Only yesterday we checked her credit card statement online to find that her credit limit has been increased to £2500.

Just one more thing, she is not on the electoral roll, neither am I, still waiting for it to appear.

LoopyPrune

It has never effected me in anyway although as stated a number of times its probably one of the worst ways to borrow money, but dam its so easy at times. If it really annoyed lenders, would you not think they would remove the offer.

Personally I thinking staying within your credit limit upto 90%, paying more than the minimum payment before the due date, and occasionally clearing the balance in full is what interests them.

Only ever been refused 1 credit card with Abbey National (strange cause A&L offered me a £100k mortagage previous to that) and since then I have had cards with Virgin, ASDA, Halifax and my most recent card is Sainsburys.

withnell

henrik1971 wrote: »

I think cash machines should dispense fivers a lot more, like they did back in the 1980s.

Simple reason - if they did they would run out of money too quickly! If you take inflation into account, that £5 would probably buy about the same amount as £20 today

TBeckett100

on equifax it shows now how much you paid per month, what your balance was at the time, any cash advances and whether it was just the min payment.

henryg_2

Mozette wrote: »

would imagine taking cash on a credit card would adversely affect your credit rating because you would surely only do it if you were desperate

Yes I agree they know it's not going to be your first choice of accessing cash ..