Impact of CC cash withdrawals on credit rating

Indebted.Dunce

Hi all,

I have tried searching the forums for this so I do apologise if this has already been answered.

I am not looking to withdraw any cash on my CC but I have certainly done it in the past and I really want to try to understand the damage I have done.

I think everyone certainly understands that is very expensive as you get hit with a massive withdrawal fee and then are charged interest at a ridiculous rate from day 1, but does anyone know how it impacts your credit rating? I am assuming quite negatively, in a similar way as PDL, since it almost demonstrates that you are desperate for cash - question is, just how badly and how long does the impact actually lasts?

Also, linked to it, does anyone know where I can find a guide which would help me interpret the statutory credit reports? (I appreciate every lender will have their own criteria and potentially different ones depending on the product)

Thanks,

ID

chanz4

but then again, look at the clairty card from halifax or even the one nationwide did which encouraged cash withdraw

chattychappy

I do cash advances on Santander Zero all the time (at least monthly, sometimes weekly) - for me it's the cheapest way of getting cash abroad. I can still get new prime credit.

Even at standard rates, cash advances are not in the same league as pay day loans.

People also take cash advances for other reasons. They lose their debit card/forget the PIN, they put the wrong card into the ATM by mistake (I've done that), they get caught out one night etc etc. Indeed if you can't quite pay off your full balance it can be cheaper to take a cash advance to finance the difference rather than lose your "up to 56 days' interest free on purchases".

CCs offer cash advances as a service. It would be a nonsense if they took such a dim view of using the service. If they were that worried they wouldn't offer it at all.

Anyway - I suspect it is just one factor that by itself means nothing. But taken with paying minimums only, being close to credit limits, the odd missed payment etc, then it could prove negative.

droiderm

I mostly agree with that.
But i do think depending on the frequency and amount may have an impact in its own right. Especially for things like mortgages.
I have done the odd one in the past but only when my debit card has been eaten.

opinions4u

I wouldn't get cash advances in the three months prior to making a new credit application.

I'd apply that rule to Clarity, Zero et al too.

Some lenders factor it in to their scoring systems negatively.

Hazzinho

Multiple cash advances every month are not looked at favourably as it shows you are using it to fund your lifestyle rather than your bank account.The odd cash advance isn't really a problem though.

YorkshireBoy

Indebted.Dunce wrote: »

...does anyone know where I can find a guide which would help me interpret the statutory credit reports?

http://www.experian.co.uk/downloads/consumer/experian-YCRE.pdf

simax

... and remember not all credit card companies report cash advances on your credit report. Sygma/Creation cards certainly don't.

Indebted.Dunce

Thanks a lot to all of you for the helpful posts.

I have had "binge months" in the past where I would max out my cash withdrawal facility on all my cards! :eek::o Then there would be nothing!

I currently repay a combination of a bit more than minimum (0% cards) and a chunk (low LoB cards) so we will see how it goes. Hopefully by the time I am ready for a mortgage (2-3 years from now), none of the lenders will care (here is to wishful thinking )!

Thanks once again!