Recently, I recalled an email from one of my credit card companies regarding a “credit-on-credit” service. So, I quickly called their customer support, and honestly, I was surprised at how easy it was.
After a brief verification, I was approved for a cash loan that amounted to 90% of my credit limit. The best part? For a limited time, the interest would be zero for the first six months, and I just had to pay a small processing fee. Just two business days later, the money appeared in my account—no paperwork, no hassle.
What is “cash on credit”?
Cash on credit refers to a pre-approved loan option available from many credit card issuers. This allows you to borrow money using your card’s available credit limits, often at lower interest rates than typical card purchases, or even with zero interest during special promotional periods.
Here’s a brief overview: The loan amount can reach up to 90% of your available credit limit.
So, say your credit limit is DH10,000; you could access up to DH9,000 in cash.
There’s usually a one-time fee ranging from 1% to 3% of the loan amount, which is typically added to the first monthly payment.
You can select from various repayment terms—like 3, 6, 9, or 12 months. The loan total and any processing fees are divided into equivalent monthly installments (EMIs). Depending on the specific offer, you might qualify for a zero-interest EMI plan or a low fixed rate. It’s convenient since these options are pre-approved, meaning no extra paperwork or credit checks.
When should you consider this option?
If you’re in need of quick, short-term cash without the wait or paperwork associated with personal loans, using cash on credit could be a smart choice, particularly if there are promotional rates involved.
This approach can help you avoid dipping into emergency savings or prematurely cashing in long-term investments. Just be sure to make your EMI payments on time. If you miss a payment, your EMI plan could be canceled, and any remaining balance might revert to standard credit card charges, which could lead to high interest. When used wisely, this feature can transform your credit card from a possible financial burden into a handy backup plan.
