4 ms·

In the UK, doing a cash advance on a credit card will hose your credit rating. Is that not true in the US?

ci5er 9y ago
It does not hose your credit rating in the US (assuming you pay your CC bill on time). It doesn't even show up as an event on your credit rating, as the decision to extend credit up to your limit has already been approved.
- drkstr 9y ago
  It can actually, although perhaps a little indirectly. Off the top of my head, the credit card balance is a direct I put to both the Debt to Income Ratio (small affect), and Percentage of Revolving Credit Available (much larger affect). These are not deal breakers, but did lower the score at both places I worked where this mattered.
  - ci5er 9y ago
    Well, certainly if your carried balance goes up as a percentage of revolving credit, that will affect the score. But this would hold true whether you did a cash-advance or bought a TV, no? EDIT: IIRC, the Debt-to-Income ratio calculation (if you were to apply for a mortgage, for example), is based on your aggregate credit-card limits (used or not), on the assumption that you could be that exposed. I remember when I were a young lad, I had to kill a card (or two?) that I wasn't even using in order to get the mortgage rate I was looking for because of this effect.
  - bencollier49 9y ago
    Okay, so just to explain the way this works in the UK - a cash advance shows up directly against the card and month it was taken. Credit scorers typically treat it as a sign that you're living outside your means, and so it has a very serious effect on your ability to get credit. There are certain types of payment which are also classed as a cash advance and sometimes catch people out, such as to gambling sites.
ghaff 9y ago
I have no reason to think it hoses your credit rating in the US if you pay your bill (or at least the minimum) on time. What it does do though AFAIK--it's been a long time since I've done it--is to start the clock on paying whatever extremely high interest rate your card has on the total balance on the card. Including your regular charges that would otherwise be carried interest-free until the payment due date. So it's generally a very bad idea to get a cash advance on your credit card, especially a credit card that you also use to charge other purchases.

It does not hose your credit rating in the US (assuming you pay your CC bill on time). It doesn't even show up as an event on your credit rating, as the decision to extend credit up to your limit has already been approved.

drkstr 9y ago
It can actually, although perhaps a little indirectly. Off the top of my head, the credit card balance is a direct I put to both the Debt to Income Ratio (small affect), and Percentage of Revolving Credit Available (much larger affect). These are not deal breakers, but did lower the score at both places I worked where this mattered.
- ci5er 9y ago
  Well, certainly if your carried balance goes up as a percentage of revolving credit, that will affect the score. But this would hold true whether you did a cash-advance or bought a TV, no? EDIT: IIRC, the Debt-to-Income ratio calculation (if you were to apply for a mortgage, for example), is based on your aggregate credit-card limits (used or not), on the assumption that you could be that exposed. I remember when I were a young lad, I had to kill a card (or two?) that I wasn't even using in order to get the mortgage rate I was looking for because of this effect.
- bencollier49 9y ago
  Okay, so just to explain the way this works in the UK - a cash advance shows up directly against the card and month it was taken. Credit scorers typically treat it as a sign that you're living outside your means, and so it has a very serious effect on your ability to get credit. There are certain types of payment which are also classed as a cash advance and sometimes catch people out, such as to gambling sites.

ghaff 9y ago

I have no reason to think it hoses your credit rating in the US if you pay your bill (or at least the minimum) on time. What it does do though AFAIK--it's been a long time since I've done it--is to start the clock on paying whatever extremely high interest rate your card has on the total balance on the card. Including your regular charges that would otherwise be carried interest-free until the payment due date. So it's generally a very bad idea to get a cash advance on your credit card, especially a credit card that you also use to charge other purchases.