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Many
credit cards can also be used in an
ATM
to withdraw money against the credit limit
extended to the card but many card issuers charge
interest on cash advances before they do so on
purchases. The interest on cash advances is
commonly charged from the date the withdrawal is
made, rather than the monthly billing date. Many
card issuers levy a commission for cash
withdrawals, even if the ATM belongs to the same
bank as the card issuer. Merchants do not offer
cashback
on credit card transactions because they would pay
a percentage commission of the additional cash
amount to their bank or merchant services
provider, thereby making it uneconomical.
Many
credit card companies will also, when applying
payments to a card, do so at the end of a billing
cycle, and apply those payments to everything
before cash advances. For this reason, many
consumers have large cash balances, which have no
grace period and incur interest at a rate that is
(usually) higher than the purchase rate, and will
carry those balance for years, even if they pay
off their statement balance each month. |
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