Cash Balance reduction

Red_Rose_Exile

I have been going through my credit card statement (yet again!) to see how I can further reduce my outgoings. I have to admit that cc debt is hardly remarkable, but I have realised that I do have a problem, of my own making.

A year ago, I used my cc to get a cash advance. Doh! I can hear you all saying. Yes, I know, not particularly astute.

I am now more than aware that cash advances attract a higher interest charge than services/purchases, and obviously the CC company isn't into altruism.

I would like to pay off that cash advance, but I have noticed that, on the back of the statement, the cash balance is the last thing to be reduced in terms of allocation of payment.

My question, and thanks for reading this rambling so far, is this. Is it possible to get the CC company to change the allocation of payments so that the cash balance is reduced before the product/service balance and so reduce the overall amount that I pay back?

simongregson

It is not. However, if you have a good credit history, balance transfer the whole amount onto another card. This will cancel out the difference between the two amounts, meaning you can pay the whole lot off at one rate. See the article on balance transfers in the resource bar above. If you intend to pay the whole lot off at once, it is probably best to go for a card with no transfer fees, as you could pay it off straight away. Otherwise, get a 0% or LOB deal, although you will have to pay a fee of around 3% of the amount for this.

As far as I know only Nationwide applies money paid to your credit card to cash before cheaper debts.