One of the major advantages of credit cards is their convenience.  With a card or two to your name, there is no need to carry cash around in your wallet, and you are able to make purchases that can be paid off at a later date.  Everything is pretty straightforward with credit cards, as long as you stay out of debt trouble.  But what about using your credit card for cash advances?  For one reason or another, people sometimes need to get their hands on cash (perhaps for a major purchase, a rent payment or for an emergency while traveling outside the country).  Credit cards are happy to oblige them with cash advance services.  But the fees and interest rates associated with cash advances are often much, much higher than standard fees and interest rates for regular “swipe” purchases.  Here are the dirty details of cash advances, and some ideas to help you avoid the negative aspects of using your credit card to make a withdrawal from an ATM.

Here are some things to consider when stepping up to an ATM to get a cash advance.

1. Fees are usually not a flat rate.  This means that you can be charged 2% to 5% of the amount that you withdraw as a one-time, upfront fee.

2. Interest rates start as soon as you withdraw the money.  That means that you will be paying interest right away, not when the next statement comes.  So even if you are able to pay off the balance for the cash advance before the next statement period, you will still be saddled with interest charges.

3. Speaking of interest rates: credit card providers charge a higher interest rate for cash advances than for regular purchases.  Though this rate varies from a few percentage points more to almost double the usual rate, it is always (with a few rare exceptions) higher than the standard APR.

4. Credit card companies are required by law to tell their customers about the rates and fees associated with getting a cash advance.  So, at the very least, consumers can make themselves aware of the overall cost of their cash advance before they visit the ATM.

Cash advances are not always a bad idea.  People who need a very short term loan that they can pay off within a few days or even a few weeks will avoid the most serious interest charges.

Also, with so many other alternatives out there, it is not usually necessary to rely on a cash advance.  Here are some alternatives to tying yourself into high interest rates and excessive fees.

1. Paypal is an extremely useful alternative to cash when making peer-to-peer transactions.  Many people who accept cash for payments may also be able to accept payments over Paypal, though they may not advertise that fact.  If a Paypal user balks at your request to pay via Paypal, you can offer to pay the processing fee, which will still most likely be lower than the fee that is levied for a credit card cash advance.

2. Some cards, such as the PenFed Platinum card, do not have cash advance fees.  However, these cards are generally only reserved for people who already have stellar credit and are unlikely to need cash advances anyway.

3. If you have a few days, you can use your credit card to pay yourself via Google Checkout, Paypal or some other payment processor and then withdraw the money to your bank account. Withdrawing can take a day to three days, sometimes longer depending on your bank.  PayPal, however, has a debit card that allows users to withdraw their money from an ATM immediately after a transaction is approved.  There is only a $1 fee (plus any fees levied by the bank that operates the ATM).

With these other options, cash advances are less and less useful.  However, for a very short term loan, they are still a viable choice.

Choosing a credit or debit card to use while traveling might not be as easy as it sounds.  Yes, the main question is obviously: which card in your wallet belongs to the payment processing network that is widely used in the places that you plan to visit.  Any card with the Visa logo usually wins this contest, because Visa has a truly global payment processing network.  MasterCard is a close second, with American Express a useful, but sometimes unacceptable, runner-up, and Discover a very limiting option for people traveling internationally.

Yes, the acceptance variable is important, but so other variables that travelers often forget to consider.  Most cards carry a foreign transaction fee that is levied every time that you use your card when you are out of the country.  These fees can range from 1% to 5% of the total transaction.  This can turn out the be a significant cost if you use your credit card to pay for a hotel, car rental or airline ticket while abroad.  These fees could easily total $100 when all is said and done.  Many cards also charge ATM fees or, worse, treat ATM withdrawals like cash advances and tag them with super-high interest rates.  Even debit cards are not immune from foreign transaction fees and hefty ATM surcharges.  In fact, many banks now charge a percentage of the overall ATM withdrawal amount (this fee usually amounts to 1%-3% of the total transaction).  This makes choosing the correct debit card as important as choosing a fee-free credit card.

There is a bit of irony when it comes to ATM withdrawals.  Bank of America, one of the banks that created a huge stir with its debit card fees in the US, offers fee-free withdrawals in many foreign countries.  As long as the ATM is owned by a bank that is part of the world-wide group known as the Global ATM Alliance, money can be withdrawn fee-free.  Citibank offers fee-free withdrawals for all Citi account holders at its international locations (there are a significant amount of international branches – with one in almost every major city).  The no-ATM-fee rule does not carry over to debit card purchases, which almost always carry foreign transaction fees.  In fact, in countries where chip-and-pin cards are used, US customers may find it impossible to even get their debit cards accepted by retailers.

It should be noted that many other banks, including smaller banks, will waive fees on international ATM withdrawals for their premium customers (i.e. people who keep a high balance in their checking account or have significant savings or investment accounts with the bank.  This varies by institution and is sometimes not openly advertised, so you’ll have to ask if you think you fall into this category.

The Chase Sapphire Preferred, Citi ThankYou Premium, and American Express Platinum card all waive foreign transaction fees. The other cards can basically be considered premium travel-oriented cards; they are not cards that will prove useful for casual travelers.  The ThankYou Premium and Sapphire Preferred offer a variety of travel perks and points earning potential, but, since they all charge annual fees, they are mainly for serious travelers who have a strategy for getting the most out of these cards.

Despite the fact that advertising makes it seem like anyone can reap the benefits of rewards cards, most cards are only really “rewarding” for people who use them all the time or use them for multiple major purchases each year.  Card-holders who are not using their cards multiple times each week are probably not raking in the rewards or are not earning enough rewards points to cash in before their points expire.  Even people who are moderate users of rewards cards will probably only pick up $50 or $100 in rewards during a year-long period.

Some cards allow users a chance to earn a significant amount of points before they get bogged down in one-point-per-dollar spending.

The basic strategy for earning points without putting in the day-after-day work of making purchases with a rewards card involves finding cards that have good introductory bonus offers.  Most of the best bonus offers will give new customers a generous amount of points (usually with a value of $100-$200, sometimes much more) if they spend a certain amount of money in the first month or three that they have their card. Then, all that is required to get the bonuses is using the card for a major purchase or for all your day-to-day purchases for  a month or two (or three, depending on the details of the introductory offer).  After getting their intro rewards, users can choose to cut up their card or keep it in their wallet for an emergency or for casual use.  It is good to keep in mind that using cards for their intro bonuses and then canceling them can have an adverse effect on a person’s credit score.  However, people who decide to reap the intro rewards and then cancel occasionally (as in once over year or two) probably won’t feel any adverse effects as long as their other cards and loans are well-managed.

So where can you find these worthwhile bonus deals?

The Chase Freedom has a bonus offer with a low spending threshold.  Users only need to spend $500 in the first three months after opening their account in order to qualify for $100 worth of rewards points.  If you do that math, that’s akin to 20% cash back for the first $500.  The Citi Dividend Platinum is also offering this type of deal.

The Citi ThankYou card has a few worthwhile introductory bonus offers.  The card requires a bit more spending ($1,000-$2,000 in the first three months), but it also offers slightly better bonus rewards (worth between $150 and $250).  While it is not worthwhile to make extra purchases in order to get the rewards, if card-holders can cross the spending threshold by charging all their regular purchases or necessary major purchases (that they would have made anyway), then it is worth it for them to attempt to exploit this strategy and earn fast rewards from the Citi ThankYou card.

People who are a little more card-savvy might even consider a card that has an annual fee.  Many of these premium cards, like the American Express Gold or the Chase Sapphire Preferred, offer yearly bonuses that can cancel out the cost of the annual fee.  For travel cards, the perk might be a companion ticket worth the cost of the annual fee.  Another option could be some sort of discount at a retailer or other affiliate that is associated with the card.  In these cases, it is best to not get caught up in the counting of points and miles, but to simply focus on the value that the annual perks have to you: will you get the full value out of the discounts or companion tickets (i.e. will you use them every single year)?  If the equation works out in your favor, then perhaps, an annual fee card is right for you.

Traditionally, rewards card users have to wait until they build up a significant amount of points before they receive any rewards.  As credit companies try to lure in new customers, they have begun to offer more and more upfront perks.  Usually, these are in the form of a special discount that is only offered to cardholders.  The card company partners with a retailer and offers a significant discount (usually) to people who are willing make the purchases at that business with the company’s credit card.  The business gets a bit of free advertising and, hopefully, an increase in sales, while the credit card company gets more income from processing fees.  It seems like a winning proposition for everyone involved.

To find these deals, cardholders can troll around online, looking through their different credit card brands’ websites.  Or, they can turn to social media.  Like many other industries, the credit card industry is beginning to embrace social media as a way to communicate with and advertise to their customers.  This is great news for card-holders who want to take advantage of these new upfront discounts.  They can simply interact with the company on social networks and get the latest information and deal announcements without having to spend time sifting through various websites with the hope of maybe finding something worthwhile.

For local shoppers, the best bet might not be Facebook or Twitter, but the business-oriented site Foursquare.  American Express has launched a significant campaign on the upstart social network, offering deals via local businesses.  Cardholders can find businesses that are offering deals and then take advantage by simple shopping at the retailer (or restaurant or service provider) using their American Express card.  To take full advantage, AmEx users have to link their card to their Foursquare account, and then “load” a specific deal on their card (achieved by clicking the aptly-named “load to card” button), and then use their card to make the purchase.  More recently, AmEx has begun a similar campaign on Twitter.  Users can sync their card with their Twitter account and take advantage of deals offered by the card company.  The Twitter/AmEx alliance is still in its testing state, but it seems successful, so you can expect it to be a regular feature in the future.

And, of course, if these early forays into social media are super-successful, you can expect other credit card issuers to jump on board in one way or another.  Even if you are not a customer of a card company that is already using social media marketing, you can keep up with deals and special promotions via your credit card’s social media page.  Chase has launched several specials and promotions via Facebook and has even created fan pages for some of their more noteworthy promotions (such as those offered to Chase Freedom card-holders).  Users who follow Chase can not only keep up with upcoming offers, but can also interact with the company (by doing things like “liking” a certain promotion’s fan page) to earn extra rewards.

When following a credit card company via social media, it is best to do a bit of research so that you can avoid exposing yourself to too much irrelevant information.  Some cards may have specific social media accounts for a specific brand of card, while others may only have one account for all their card brands.  A card company may have one Facebook account but different fan pages for each specific card, for example.  Becoming a fan of the specific credit card, rather than befriending the card company itself, can lead to a more streamlined flow of information that can help you get the most out of the social media interaction.  And streamlining the deal-searching is the reason that card-users turn to social media in the first place.

There is a new fad in the rewards credit card game.  With the popularity of the Chase Freedom Visa and the Discover More card, cards that give 5% cash-back rewards on rotating categories of purchases, other companies are scrambling to launch their own rotating-category rewards cards.

On the surface, these cards sound great: you get 5% cash-back on purchases in certain categories and 1% on all other categories.  With category examples like “restaurants,” “Amazon.com purchases,” and “airfares,” the More, Freedom, and their peers can seem super useful.  However, these cards are not without their drawbacks.  Each category lasts for three months, after which they are rotated out in favor of new, unrelated categories.  This might force some people to spend more than they normally would in a given three month period because they are trying to get the most out of their favorite category before it changes.

Are there any times when these cards are worthwhile?  Well, considering that most basic cash-back rewards cards offer 1% cash-back on all purchases, users of the Chase Freedom and its category-happy peers are not losing anything by opting for these cards instead of standard one-point-per-dollar cards.  For most consumers, considering the 5% a nice perk, and nothing more, is a good approach to these types of cards.  One way that can get users into trouble is if they start justifying unnecessary purchases by telling themselves that they need to take advantage of the fleeting 5% bonus.  The amount of rewards points or cash-back bonuses is not enough to justify spending more than you usually would.  You might earn a few dollars in rewards, but you’d lost a lot more than that in unnecessary spending, meaning you’d be losing money overall.

One exception to this rule might be waiting until your preferred category comes up before making a major purchase.  Getting 5% cash-back on most travel that you already plan to make anyways is a nice perk – even better thanv the earning rate that many travel-related rewards cards can offer.  So waiting until a travel category comes up before purchasing your tickets and booking your hotel could be worthwhile.  Again, this is the case as long as you are not booking anything that you wouldn’t otherwise book.  Spending an extra $200 to upgrade to business class will earn you $10 worth of rewards.  So you’ll have gained $10, but lost $200 in the process.  Any way you look at it, the math is not in your favor.

What about a multiple card strategy?  If you have several category rewards cards, one is bound to have something that you need at any given time.  This strategy might work, but only if you can manage multiple accounts at one time and will actually use the card with the most advantageous rewards-to-dollars-spent ratio.  However, other strategies, like having rewards cards for specific types of purchases (a gas rewards card, a travel card, and a store-specific shopping card, for example) can accomplish a similar thing without forcing you to worry about keeping track of ever-changing categories.

Still, having the Freedom, More or other category card in your wallet couldn’t hurt.  The good introductory offers for these cards (0% APR period for the More and a new-user cash-back bonus for the Freedom) might be enough to sway people who are still on the fence.  At least they will get something out of the card at the beginning even if they find that the category-chasing game isn’t for them in the long run. That said, if you are in the market for a new rewards card and want something simple, these changing category cards might be worth a look.  You can think of them as basic cash-back cards with an extra perk of 5% cash back on the rare occasion when your regular purchases happen to fall into one of the bonus categories.

Prepaid debit cards are becoming more and more popular, both amongst people who do not have standard bank accounts and people who do are just in search of an extra way to pay.  The type of cards that people usually associated with the “prepaid” industry are re-loadable prepaid cards.  These cards are very similar to basic bank accounts; users make deposits and then use their cards after the deposit is verified.  Non-re-loadable cards are also part of the prepaid marketplace.  These can be used like other debit cards, but they cannot be reloaded.  These one-and-done cards are often given as gift cards, which many people prefer because they can be used at more the one store.

It is also possible to use these cards like a disposable version of a standard, re-loadable prepaid debit card.  The obvious disadvantage of this approach is the inconvenience of having to purchase a new card every time instead of simply depositing the money in a prepaid account.  The advantages are that these cards can be used in complete anonymity and users are not exposed to hidden fees that come from not using or making the minimum deposit required by a standard re-loadable prepaid debit card.  With non-re-loadable cards, fees are paid upfront when you purchase the card.

Unlike standard prepaid debit cards, non-re-loadable cards do not require you to give any information to the company prior to depositing money and using the card.  This means that non-re-loadable cards can be obtained quickly, even with cash, and can be used almost immediately.  Privacy-conscious users will also appreciate the anonymity that these cards bring.

Fees for loading these gift cards might be more or less than the fees associated with standard prepaid debit cards, depending on how much is loaded.  Fees for loading and activating a Visa gift card range from $4.95 to $9.95.  Without direct deposit, this is the same fee range as a standard Visa re-loadable prepaid debit card.  So people who do not plan to use their prepaid card as a stand-in for a bank account might actually be better off with a non-re-loadable card because they can use it quickly after activating and aren’t really losing anything in terms of fees compared to regular prepaid cards.

People who like the anonymity and convenience of non-re-loadable cards, but don’t mind sacrificing a little flexibility, might actually be better off going with store-specific gift cards.   These cards usually come with no fees (as long as they are used in a specific period of time – usually no less than one year).  Of course, the catch is that gift cards can only be used at one place while the cards with the gift cards with the Visa logo can be used anywhere.  Individual consumers will simply have to decide for themselves if the convenience is worth five or ten dollars worth of fees.

MasterCard also has gift card options, with some, like the Key Bank MasterCard, actually allowing users to withdraw money from the bank’s ATMs.  Discover has some of the best options in the entire pre-paid, non-re-loadable marketplace.  Card fees do not change for values up to $500.  All fees are $3.95.  That can actually make these cards cheaper than regular prepaid debit cards after all the fees are counted.  American Express Gift cards carry the same $3.95 fee, but also have a shipping charge when bought online.  Cards bought in person with cash are not subject to these shipping fees.

All these cards can be bought with cash at participating stores.  However, the amounts and purchasing procedures vary by retailer, so often, buying online is a more convenient option, especially for larger amounts that stores might not sell.  Some banks make sales of these non-re-loadable cards in larger amounts (some allow you to deposit up to $3000).  However, this varies by bank.

With low fees, these non-re-loadable cards are not only useful as gift cards, but as more-anonymous, more-short-term stand-ins for standard prepaid debit cards.

The US is no longer a cash-based society, like many places around the world still are, so it is generally easy to use credit cards virtually anywhere.  Until a few short years ago, cards were not accepted at some fast-food joints and convenience stores.  Even the most out-of-the-way McDonald’s and the most remote drug store now have card processing terminals that allow customers to swipe and run.   Peer-to-peer payment processing tools like PayPal, and even smart-phone-top credit card readers, make it possible for literally anyone to accept payment with a credit or debit card.  Even farmers market vendors and baseball-park hot dog sellers can accept cards on the spot.

But even the most modern retailers might not accept every type of card.  And what about people who travel out of the country frequently?  Certain cards are not as widely accepted as others.  This might have to do with differing swipe fees between cards or simply a smaller processing network that some cards are saddled with.  Or it could be a mere mater of preference for the retailer.

At home or abroad, Visa and MasterCard are the most accepted brands.  Other brands, namely Discover and American Express, are widely accepted in the US, but perhaps less so abroad.  Because of their higher swipe fees, some retailers in the US may still choose not to accept AmEx or Discover, though most major chain stores are on board with all brands of credit card.

Especially when traveling, a card with a MasterCard or Visa logo is generally the best fall-back.  However, this does not mean that these two payment processors are always the best option.  Some AmEx cards and all Discover cards do not have foreign transaction fees, making them a cheaper choice for traveling abroad, if you can figure out how to use them effectively.  Discover and American Express rank very highly when it comes to customer service, so navigating your way to card services, even overseas, may prove much easier with these cards compared with Visa and MasterCard plastic.  A simple phone call could lead you to a place where you can get a cash advance with your AmEx or Discover so that you can make a purchase even if the vendor does not accept these brands in their store.

American Express, known for its higher swipe fees, has been making in-roads with small businesses, giving them a chance to promote their business by offering discounts and special deals to American Express card-holders.  This has helped widen the number of places that accept AmEx.  Both Discover and AmEx have debit cards that can be used to compliment their credit cards.  If a particular vendor does not accept the credit card, the user can visit a nearby ATM and withdraw cash to pay for heir purchases.

Of course, the most practical way to avoid standing at the counter without a card that is accepted by the cashier is to keep a back-up in your wallet.  Many people keep both a Visa and MasterCard so that they are prepared for any type payment processing scheme.  A vast majority of debit cards carry a Visa or MasterCard logo, so this is not even an issue for most debit card transactions.  This can also work for American Express and Discover card holders.  A back-up Visa can be used any time that their preferred credit card brand is not accepted.  With this strategy, users can rely on their favorite card without worry because a back-up can step in if it is not accepted.  Why not just get a Visa or MasterCard and forget it.  Discover and AmEx have built loyal followings with their customer service (they are ranked #1 and #2 almost every year when it comes to customer service) and also offer more generous rewards programs compared to the competition.  So for many people, it is worth keeping a back-up in their wallet if it means that they can keep relying on their favorite card.

For most frequent travelers, airline rewards credit cards seem to be the best way to get the most value out of traveling.  The problem is that the rewards from these cards can usually only be spent on more travel.  That means that road warriors an only spend their points on airline tickets, or on some other travel-related expenses like hotels or car rentals.  Where does this leave people who want to use their travel to earn points that can be redeemed for other, non-travel-related spending?  Frequent travelers can really rack up the rewards points because flying is generally quite expensive.  Wouldn’t it be nice to at least have the option to use all those points on something besides flying?  And wouldn’t it be even nicer to be able to get the full value out of your points if you decided that you didn’t want to use them on travel, but on something else?  While most travel-focused cards and airline-specific cards generally only offer full value for rewards that are spent on travel, a few cards are a bit more flexible when it comes to redeeming rewards.

What cards are the best for earning rewards from travel that can be spent anywhere?

Cash-back cards offer the most flexibility, and no one has more cash-back options than Discover.  Even cards that are geared towards travel still have a cash-back option.  Miles by Discover sounds like an airline miles card, and it is.  Miles doubles rewards for any travel or restaurant spending.  These rewards miles can be redeemed on a number of airlines.  However, the “miles” can also be converted into cash or statement credit, meaning that the rewards can be used for things other than travel.  Users can also choose to accept their rewards in the form of a gift card from one of Discover’s retail affiliates.

Escape by Discover is another option that is geared towards earning travel rewards.  Like the Miles card, it doubles the miles earned on travel-related purchases.  Also, like the Miles, the Escape’s points can be used for travel, but also for gift cards from corporate partners of Discover and for cash-back rewards.   This flexibility makes both these Discover cards good options for travelers who want to spend their hard-earned rewards miles on something besides travel.

The HSBC Premiere World MasterCard has a very flexible rewards program that allows users to choose which categories that they want to receive their rewards in.  This is a useful card for traveling internationally because it does not charge any foreign transaction fees.  The Premiere World only has a one-point-per-dollar earning ratio, but points are doubled for the first six months of card ownership, and the lack of an annual fee, combined with the lack of foreign transaction fees, makes this a good choice for travelers looking for some value and flexibility when it comes to travel-related rewards.

American Express offers some of the most customer friendly rewards cards for travelers.  Their premium cards are basically focused on offering perks to frequent travelers and those seeking a high-end travel experience.  However, the fee-free Blue Sky and low-annual-fee Blue Sky Preferred are options that offer good travel rewards that have to be spent on travel.  However, the rewards are given in the form of statement credit, so users are free to choose whatever type of “travel” related spending that they want.  So while they may find some restrictions on what they can redeem their points for, overall, the Blue Sky cards act like regular cash-back cards in most situations.

The most important question that most rewards-seeking travelers can ask is not how many miles that they can earn, but how much flexibility they have when it comes to spending their earnings.

Cash back rewards cards are gaining popularity because of the relatively simple, straightforward way that they allow users to earn and redeem rewards points.  Cash-back cards give users their rewards in statement credits or perhaps in gift cards or other cash-like awards.  In the minds of many consumers, these simple cards trump airline rewards cards and other specialty rewards cards because they have fewer restrictions and a more straightforward way of redeeming points for cash.  Plus, the cash value of cash-back rewards is, obviously, more consistent than other non-cash awards that might be valued at a price that is higher than they are actually worth.

Getting the most out of a cash-back rewards card requires the correct approach and a good strategy for spending (and paying off balances).  First of all, even the best cash-back rewards card is not going to provide any sort of financial windfall.  Most successful rewards program users consider a cash-back card like having a coupon in their wallet for everything that they buy.  The 1%, 2%, or even 5% that they get back is a discount, but not one that is going to change their shopping habits or help them reach a higher income tax bracket.  This seems obvious, but many people put huge effort into gaining rewards points and even make extra, unplanned purchases just so they can earn extra points.  However, people who consider the cash-back rewards as a nice little perk that can save them a few dollars and cents each week will actually get more value out of their cards in the long run. This is because they do not use their cards in a way that changes their spending habits.

The advantage of cash-back rewards cards is that they can be used to earn points anywhere.  However, most cards award users with extra points for purchases made in a certain category and for purchases made through the credit card’s online shopping portal.  Again, the extra points on restaurants or gas or a certain department store are nice, but not nice enough to seduce you into spending more in a certain category or in a certain store than you would otherwise spend.  If you already eat out every Saturday, for example, a card that gives 3% cash back on restaurant purchases is worthwhile.  If you have to fill up your SUV every week to the tune of $100,  gas-centered cash-back card can be a good deal.  As long as the card does not make you change your spending habits, it is worthwhile.  Most cards offer 1% cash back on all purchases, regardless of which category they fall into, so users who use their cash-back cards for all general purchases are still earning points.

Credit card shopping portals are seldom worthwhile, unless cardholders are already looking to make a purchase of something that is on-sale through the portal.  Unfortunately, many listing on these sites are not very generous, and most amount to free shipping on purchases over a certain amount, which is something the retailers often offer on their website anyway.

Whatever your chosen strategy for getting the most out of your cash-back card, it pays to read the fine print.  “Cash-back” is defined in different ways.  The best option is usually a card that gives you your reward automatically as a credit on your account.  Some cards try to take their program in another direction, offering the full reward bonus only if the card-holder accepts a gift card from a specific list of retailers.  This could work out well if the gift card is for a retailer that you regularly shop at anyway, but non-statement-credit programs do limit your flexibility when it comes to accepting rewards, and limitations are exactly what most people try to avoid by getting a cash-back card.