Cash Limit Ratio Poll

rosmersholm

I'm not sure if this topic has been posted about before but I think it would be useful to know more about cash limits as part of credit cards. I could never understand why CapOne were quite happy to let me take all of my credit limit as cash and yet Amex had a strict 20% of credit limit set as my cash allowance.

I know the "cash limit" problem is fundamentally one of risk. For example, newbies to credit would be less likely to be granted a 100% cash limit for fear of withdrawing it all and running off to the hills, but the discretionary (almost arbitrary) decisions about the ratio would be interesting to know more about.

SO - I have created a poll in a naive attempt to understand what is the most common cash limit (as a proportion of credit limit) to work out the median cash limits across credit cards. If enough people take part, it might become pretty clear what the industry decides on.

esuhl

I'm not sure, but I do know one thing: I have never withdrawn cash using a credit card and never intend to - it costs a fortune! It's always (in my experience) been better to buy stuff directly with the credit card and to withdraw cash (free of charge!) from my current account.

rosmersholm

It is ridiculously expensive to take any form of cash advance and the number of cash advances now appears on credit reports, as as a sign of "panic" or "easy profit" (cynical Rosmersholm!) to prospective lenders.

The interest rates on cash are also unusual - some credit cards have given me the same interest on cash as purchases - and some give massive APR for cash in contrast to purchases.

Of course, official advice is never to take cash advances at all - unless an emergency - but it strikes me as interesting to discover how much "risk" the companies are willing to take. If only I could do a poll indicating which bank of CC company.

chattychappy

esuhl wrote: »

I do know one thing: I have never withdrawn cash using a credit card and never intend to - it costs a fortune!

rosmersholm wrote: »

It is ridiculously expensive to take any form of cash advance and the number of cash advances now appears on credit reports, as as a sign of "panic" or "easy profit" (cynical Rosmersholm!) to prospective lenders.

Of course, official advice is never to take cash advances at all

Not sure what this "official" advice is all about.

It depends. For most cards it IS a very expensive form of credit.

Getting cash on a credit card is often the cheapest way if you are overseas and use Zero, Clarity, Sainsburys Gold.

I probably make 20 such withdrawals a year in Asia. Always get the "cash advance" marker on my report. Given I can still get credit, it's hardly a sign of panic. My guess is it's combined with other factors.

rosmersholm

By "official" - I mean the standard "line" of MSE(!)

As far as abroad cash advances - it is probably the safest way (and cheapest w/ Clarity) to draw cash. However, cash advances can be seen (away from specialist cards such as the ones you mention) as signs of panic to CC providers - which is surely why they are included in credit reports nowadays, listed monthly.

However, like my cynical conclusion before, it could be a sign to a prospective lender that the person favours convenience over cost - and their eyes would light up at a potentially profitable customer.