Useful tips for drawing cash from your credit card and making the most of hot travel deals
It's ideal to have your travel funds ready in your savings account so when the cheap holiday flights and hotel packages are available, you can just grab your cash and go. But when the time comes, not everyone is well prepared. To save you from needing to acquire extra cash, credit cards can come in handy. With so many products out there, do you know what to look for when cashing out your card? Here are a few tips for getting those extra bucks for your vacation.
Cashing out a credit card is different from credit card overdrafts
Many people mistake cashing out your card and credit card overdrafts to be the same thing. While they both let you draw cash from your credit limit and generally offer express approval without supporting documents, withdrawing money directly from the ATM with your credit card may cost you a daily interests as high as 40%, plus a handling fee about 5%. On the other hand, by getting cash out under cash out plans, you pay a lower interest rate with the same level of flexibility, as the amount is usually disbursed to your designated account in 3 days – just in time for your trip.
Pay attention to the interest rates
Some cash out plans only highlight the lowest monthly handling fee, monthly flat rate or APR, but that is not the actual cost of lending. The actual interest rate depends on many factors including your credit ratings, cash out amount and repayment period. Ask your bank before you get cash from your card.
Keep an eye on the 2 limits
First, it's the actual cash out limit of your card. As it's calculated based on your repayment capacity, it could be much lower than your credit limit. So don't overestimate how much you can borrow!
The second is the available credit limit after cash withdrawal. Your available credit limit will decrease as part of it has been turned into cash. While it may affect your every day spending with the credit card, the available credit limit will increase again after your repayment and you won't have to worry about going hungry!
Don't miss out on the promo
In general, you can't earn points for cashing out your card, so make sure you don't miss out on the promotions. HSBC Cash Instalment Plan gives you different limited time, exclusive offers. Go on our website now to check our latest offers. Cash Instalment Plan also allows you to repay a fixed amount with a personalised monthly handling fee for 6-60 months - perfect for travellers who prefer more stability. Calculate your monthly repayment and daily average handling fee with our repayment calculator for Cash Instalment Plans.
For globetrotters who prefer flexibility, HSBC's Cash Credit Plan is the one for you. With no fixed repayment period or repayment amount, it gives you a preferential interest rate for the first 180 days. It's up to you to decide on the travel and repayment schedule.
| - | HSBC Cash Instalment Plan |
HSBC Cash Credit Plan |
|---|---|---|
| Monthly repayment amount | Fixed | As low as the minimum payment of credit card monthly statement |
| Fee | Personalised monthly handling fee | Preferential annual interest rate |
| Repayment period | 6 to 60 months | No fixed period |
| How to get extra cash | Apply online and get it in your designated account | Apply online and get it in your designated account |
| - | Monthly repayment amount |
|---|---|
| HSBC Cash Instalment Plan |
Fixed |
| HSBC Cash Credit Plan |
As low as the minimum payment of credit card monthly statement |
| - | Fee |
| HSBC Cash Instalment Plan |
Personalised monthly handling fee |
| HSBC Cash Credit Plan |
Preferential annual interest rate |
| - | Repayment period |
| HSBC Cash Instalment Plan |
6 to 60 months |
| HSBC Cash Credit Plan |
No fixed period |
| - | How to get extra cash |
| HSBC Cash Instalment Plan |
Apply online and get it in your designated account |
| HSBC Cash Credit Plan |
Apply online and get it in your designated account |
Keep these tips in mind and grab that cheap flight with extra cash on hand!
To borrow or not to borrow? Borrow only if you can repay!