Q&A: is there a difference between a cash advance credit card debt and a regular purchase debt?

Question by Nicolas R: is there a difference between a cash advance credit card debt and a regular purchase debt?
Like, if I owe a lot of money to 3 or 4 credit card companies (like 4k each) on cash advances I know the interest rates are higher by a lot but is there a difference if the debt was for regular purchases? will they come after me more than if they weren’t cash advances? Can I still file bankruptcy to get out of the debt?

Best answer:

Answer by Koku
Absolutely! Your cash advance debt is billed at a much higher rate, and your payments to each card will be applied to the lower debt rate.

Say, you cash advanced $ 1000 at 24.99% APR but had an existing balance of $ 3000 at 9.99% APR

When you get ready to pay the bill, and attempt to pay the total cash advance balance, you’ll be in for a rude awakening. The credit card will apply the $ 1000 (+ fees) to the lesser APR, and if you continue to take out cash advances, eventually all of your debt will consist of the cash advance rate.

Also, your cash advance fees are more than likely immediate– unlike carrying a traditional balance where you can avoid the finance charges if you pay before the bill date. Cash advances should be a very last ditch, emergency option. They will increase your debt tenfold if you’re unable to manage them.

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