The cash advance option your credit cards offer may seem convenient, but cash advances can be expensive in the long run. On the positive side, being an informed consumer and knowing how to use credit card cash advances wisely can save you money.

If you find yourself in a real bind for some quick cash, consider the following factors before taking a cash advance:

1. Interest rate. The interest rate for cash advances is higher than a credit card's interest rate for purchases. Unlike the purchases you make with your credit card, you begin accruing interest charges for a cash advance as soon as you withdraw the cash. Also, the lower your credit score, the higher the interest rate you will pay on cash advances. However, if you need to access cash quickly, the fees and interest rate you pay for a credit card cash advance is less than what you would pay for a payday loan.

2. Cash advance fee. Fees are in addition to the money you pay in interest. The card company will charge you a minimum flat fee or a percentage of the amount of the advance you take. You also will pay an ATM fee when you take out the cash. Since credit card companies vary in the terms and fees they charge, it's important to read your card agreement carefully before you sign it so you know what's involved should you ever opt to take a cash advance.

3. Length of time to repay the advance. If you're looking for a short-term loan that you plan to pay off quickly, a credit card cash advance can come in handy. And you won't be hit so hard with interest charges if you repay the money within a month. But the longer it takes you to pay back the advance, the more interest you will pay.

4. Amount of advance. If you take a small cash advance, you will pay less in fees and interest. Regardless of the amount, however, carrying over a balance increases the total cost of the advance. Any unpaid balance each month that rolls over into the next billing period continues to accrue interest.

5. Reason for the advance. Because of the high cost, it's not practical financially to take cash advances to pay your usual expenses and bills. If money is that tight, you need to seek help with your finances. Using the money to cover in an emergency situation is a different story, especially if you can repay the advance quickly.

6. Balances at different interest rates. Credit card issuers generally apply the minimum payment you make to balances on your card with the lowest interest rate (normally the balance for purchases). The cash advance balance, which is charged a higher interest rate, won't decrease until you pay off the balance for purchases. If you want your card company to apply money each month to your cash advance balance, you need to pay more than the minimum monthly payment. Under federal law, card companies must apply any amounts you pay over the minimum payment due to the balance with the highest interest rate.

Need more help? Have other questions? Contact a company like USA Cash Services to learn more.