Credit cards are now found to be used regularly in Korea for payment and purchasing. A unique feature of credit cards in Korea is the ability to withdraw cash advances from the card. The feature, which is sometimes referred to as “credit card cashing,” allows the cardholder to withdraw the money that, in turn, adds to the debt with credit cards.
Cash credit cards give Korean customers the freedom to withdraw money with ease and flexibility. It has some specified risks. This paper will review the pros and cons of cashing in Korea. Cashing alternatives on credit cards in cash allows Korean customers to make more informed decisions when it comes to this specific credit card feature.
Pros Of Credit Card Cashing
If the credit card is used for cash, then the process has some pros.
The cash is with you on all occasions
Cash credit cards offer a practical and speedy method to withdraw cash at all times through the use of ATMs instead of wasting time in the long lines of the bank teller. It allows turning in touch with quick funds for meeting emergencies outside banking hours.
Rewards on every purchase
Credit cards offer rewards schemes that allow the accumulation of points or cash back on the entirety of the purchases. A customer can get to collect priceless reward points on every purchase that he makes.
For emergencies and unforeseen circumstances
Credit card cash advance offers an efficient approach to making funds available for emergencies or planned expenses that do not give advance notice.
An option for an alternative payment using cash
Credit cards that use cash offer an easy alternative to escaping the ATM to withdraw cash the whole time.
Get rewards through frequent Credit card cashing
Credit card cashing is used several times to make money and obtain cash producing more considerable reward points on the card in their thousands. Points can later be cashed for cash-back deposits or gift cards to popular shops or services.
Flexibility of credit line to both parties
In contrast to debit cards, which are linked to the balance of a bank account, credit cards get a set limit that can be used to get cash through ATM withdrawals. This gives more flexibility to the access of money than that available from depending on money in checking or savings accounts.
Cons Of Credit Card Cashing
There are cons to consider when using credit cards for cash.
A higher rate of Interest is charged on cash advances
Interest is levied on the cash advance from a credit card starting from the transaction date. Rates can run over 20% and may be too high. This means that it will become more expensive even if one takes small amounts.
Risk of accruing debt from cash withdrawals
If one does not pay off the complete balance while resorting to cash withdrawals using credit cards, he will keep accruing debt and, thereby, higher interest costs on cash balances.
The expense of obtaining cash Advances
Many cards generally charge interest rates when cash is obtained from the credit line through cashing, usually between 3-4% of the advance amount. The withdrawal of anonymous money makes it difficult to trace specific expenses, so making it cumbersome to set and achieve budget and savings goals.
Final Thoughts
신용카드 현금화 is convenient and flexible for Korean consumers in the sense they can get cash using credit cards. With much valid financial risk involved, high-interest charges, rise in debt, and falling credit scores in this course, it is not worth the advantages in most cases. The matter of using credit cards is to draw out money. Considering both the pros and cons, it is probable to make a wise decision on when and how to withdraw credits, taking into account the requirements and situations.
