Credit advice and loans.

Submitted by youngthibbs on Thu, 09/11/2008 - 14:21

I have an offer for a cash advance against my credit card limit at 4.99% until paid off. The card limit is $10,000 and I can get up to $13,000 advanced. I need about $10,000 for a student loan. Is it better to take the cash advance or apply for a student loan (I think I will get a rate between 5%-6%). My FICO is about 720. I am concerned if I take the advance my available credit to credit used will increase drastically and thus drop my credit score.


I am not sure how it will effect your score. There will be others that can tell you better than I can. What interest rate will you now paying on those student loans? You should be sure of the interest rate before making any commitments. Also be sure there isn't any fine print that you are over looking. You have a great credit score and you can maintain it by being credit wise.

Thu, 09/11/2008 - 16:31 Permalink

Hi youngthibbs
You can take a cash advance on your credit card upto $10,000 but this will affect your credit score adversely. This is because amounts owed contributes 30% in your credit score and if you take the entire credit limit available to you, your credit score may decrease. But if you take a student's loan, and repay the loan on time, your credit score would improve because of the good repayment history. So I think it is better to take a student's loan than going for a cash advance on your credit cards.

Fri, 09/12/2008 - 10:42 Permalink

You are right Youngthibbs . As far as I know, your credit score may fall below 650 points if you take the entire credit limit available as cash advance. Moreover, credit cards should not be used for taking cash advance and should only be used for making payments by swiping. Cash advance against cards should only be taken in case of emergency. Moreover, as Mary said, if you take a Students loan with this credit score, and make payments on time, your credit score can even cross 780 points. So I think that you should go for student's loan than going for cash advance on your card.

Fri, 09/12/2008 - 11:02 Permalink
youngthibbs1 (not verified)

Thanks guys. I had a funny feeling about the cash advance. I will go with the student loan.

Fri, 09/12/2008 - 18:07 Permalink

Hi Markdeviz
Taking cash advance always affects your credit score. This is because if you take a cash advance on your card, your credit to debt ratio will decrease. Now since 30% of your credit score depends upon the amounts owed, your credit score may get reduced as a result of the cash advance you take on these cards. So you should not spend more than 30% of your available credit limit as it may hamper your credit score.

Sat, 09/13/2008 - 10:14 Permalink

Wow Carol how are you so wise to all this? Do you work with these things? In any case thanks I just learned a few things I didn't know.

Mon, 09/15/2008 - 00:58 Permalink

I think taking a cash advance wouldn't be a good idea, either. A student loan gives you ALOT more 'flexibilty' if you start falling behind in payments. The way the economy is now, you shouldn't take an advance on ANYTHING.

Tue, 09/16/2008 - 11:16 Permalink
fscorponline (not verified)

If you max out you card or come close to it your going to drop your score dramatically. You should only have a 2 to 5% balance. I suggest the student loan route. It might take your score down a few points but nothing like a credit card will. 720 a good credit score must find ways that wont affect it.

Tue, 09/16/2008 - 13:21 Permalink

Hi Fscorponline
Since amounts owed contributes to 30% in your credit score, the more you spend on your cards and come close to the credit limit, the lower will be your score. But if you opt for a student's loan, your credit score may fall due to the hard inquiry, but not as much as it would have been, if you maxed out your credit card limit. This is because new credit contributes only 10% in your credit score. Moreover, hard inquiry listing stays on your credit report only for two years, but if you fail to repay the credit card debt timely, it will reflect in your credit report for seven years.

Fri, 09/19/2008 - 09:35 Permalink

I would gt a student loan ( I believe I made that same comment above..). I would search 'student loans' on the web. Then look them up on BBB site. If they are legit, the BBB would tell you. ALOT of the legit ones are 'backed' by the BBB. I know there are ALOT of 'ads' for student loans that come via the internet. However...becareful on which ones you choose.

Wed, 10/22/2008 - 14:50 Permalink

Thats pretty good advice SD. I like to make sure any company I deal with is BBB backed and it really is so easy to check.

Wed, 10/22/2008 - 16:05 Permalink

Just make sure that the Student Loan companies are legit. Thee are Federal laons and Private loans available. However....Private loans have a bit higher % rate than Federal ones.

Wed, 10/22/2008 - 17:21 Permalink

Tell me that there are also student loan places out there that are phonies. Why would we want to try to scam money out of young individuals trying to get a better education and do something with their lives.

Wed, 10/22/2008 - 18:02 Permalink

I agree. I'm a single mom and would like to go back to school. ALOT of my school was paid by the military ( I serve in the Army Reserves). But, that money is going to run out soon. ALOT of honest people who want to better their lives and go back to school.

Thu, 10/23/2008 - 17:06 Permalink
Anonymous (not verified)

Sd there may be programs in place to help pay for your schooloing since you are a single mom. Check with some of your local agencies and see what they can find. It is really hard being a single mom. I had to do this for a while and when the load is all on you it gets rough. Good luck.

Mon, 10/27/2008 - 00:12 Permalink

It DOES get tough, at times. Seems like there's 'no end in sight' with some issues. But..I'm hanging in there and doing ok. Oh, yeah....there's alot of programs, that I can go through here. Just have to research hem and see which ones are 'the best' for me.

Mon, 10/27/2008 - 00:46 Permalink

Yep...things will always get better. It is pretty bad out there for everyone right now. I think we all ust need to try to stay positive and hang in there as best that we can. You sound like a wonderful person and mother. I hope the best for you.

Wed, 10/29/2008 - 02:05 Permalink

Your score will get hit either way because of the hard inquiry placed on your credit. Also, your debt to credit ratios will take a hit. If you take the student loan you must offset that debt to credit ratio by applying for another credit card with a $10,000 credit limit to help maintain your credit scores. If you would like to apply for a credit card with no credit check go to

Wed, 10/29/2008 - 07:23 Permalink

CREDITPRO..I know you've put that same post, on a few other threads ( seems like good advice..though). You DON'T need a credit check for Cc's, from this site? Do they have anything besides CC's?

Wed, 10/29/2008 - 14:57 Permalink
Anonymous (not verified)

SDCHARGERS, what exactly is you point?

Wed, 10/29/2008 - 17:41 Permalink

GUEST........I think I made my point pretty clear. It was a question....usually 'you' know that when there's a question mark at the end of it.'re trying to say.....what, specifically? I'm sorry, Guest, I guess I din't get your 'name'. Please post it on the forum so we ALL can see who you are.

Thu, 10/30/2008 - 03:04 Permalink

The credit card available on the site that creditpro suggested is a card where you purchase THEIR products. It is not a Visa/Mastercard type of card. I got into a similar situation last year. Horizon sent me an offer to apply for a $500 credit limit, but when the card arrived, it was only to purchase items from their site. The initial offer was decieving. It did make you think you were getting an unsecured credit card that could be used everywhere.

Thu, 10/30/2008 - 15:30 Permalink

I am not surprised at all. I think most of these "off name" companies are worht it. I would stick with well known cards that are not such a risk. I tell you the whole credit world has went a little "shady"

Thu, 10/30/2008 - 23:43 Permalink

I would suggest a quick review of the post I started the other day about Credit Utilization Ratio.... Aside from the impact to THAT, there is also the issue of the exorbitant fees/charges associated with the use of credit card cash advances...

Do the math--- Is it better to get a cash loan with a ten percent rate, or use the credit card with a 20-30% rate...

Thu, 12/04/2008 - 13:20 Permalink

I think anyone who is even a little good a math should have no problem figuring that one out. This si one of the main reasons people end up having such high cash advance fees. If you read the small print you will find ut just how high some of the fees on these cards can be. We also have to relize that some people do not have the option of going to the bank and getting a loan. Which may leave them stuck wiht using this option. I would only advise it in a really tight situation.

Fri, 12/05/2008 - 17:07 Permalink