If you need to borrow quickly to cover an unexpectedly expensive car repair or something more urgent, you have several options. The alternative most people probably get in the head is to apply for a loan in the form of a high-cost credit as a fast loan. Which option feels most appropriate is usually determined by the size of the amount that needs to be borrowed. A unsecured loan, a private loan, can be an option if you need up to USD 100.00. However, there is one additional option, and that is to avail the credit on a credit card.
Cheaper than a loan
If you have a credit card with a credit line, you can withdraw from any ATM in the same way that you withdraw money with a credit card directly linked to your account.
The costs incurred for your loan / withdrawal need not be more than one withdrawal fee (see below). However, for the sake of this, we should also count on the annual fee you pay for the credit card. Of course, you should also be clear that your withdrawal will be repaid sooner or later. How long interest-free credit you have is determined by what card you have, but normally the interest-free period is at least 45 days.
Note that you cannot use this “method” to borrow if you have a pure credit card, ie a card where you have to pay your entire debt according to invoice and cannot split the payment.
Compare withdrawal fees
If you already have a credit card, you will have to deal with the terms that apply to it when you make a withdrawal. If you do not have a credit card, and are considering purchasing it – perhaps specifically to be able to make “loans” in the form of withdrawals – it may be an idea to compare cards with regard to withdrawal fees. There are quite large differences between different cards.
If you choose a major bank, you will have to pay at least an amount in the order of USD 35-40 per withdrawal. At BES, for example, you pay USD 35 if you have a MasterCard and 3% (at least USD 40) of the amount withdrawn if you have a USDcard. For MasterCard, a fee of 2% of the withdrawal applies (at least USD 40). If you choose one of the niche banks instead, you may not have to pay anything at all.
Compare interest rates
Of course, there are more things to compare when choosing a credit card. The annual fee is a factor, but the interest rate is probably all the more important. If you need to take advantage of the possibility of credit for a longer period than the interest-free period, a relatively high annual interest rate runs on the amount. At the time of writing, the difference between the cheapest and the most expensive card is almost 10%. The major banks are at the top, while a couple of niche banks that act as credit market companies offer the least favorable interest rates.