What is a mortgage and cash advances ?

Question

Don't laugh, I'm new and not great in math can you tell me in simple terms what a mortgage is and what a cash advance is, when referring to a credit card ?

Thanks

Answer 1

A mortgage is a loan on a house since most people don't have enough cash to buy a home.

Cash Advance means several things but it is borrowing. It used to always mean you went to your employer and said you were having financial problems and wanted an advance on your wages. This was usually before your first payday because you might have to work several weeks to get your first check or worse work a few days one pay period then wait until payday to get a tiny amount then wait another pay check to get a first full check. So after working a week or two and still having a week or more to wait you ask for an advance and they deduct it from your first paycheck.
Then credit cards started loaning money at high rates on your credit cards and calling it cash advance.
Now payday lenders are calling it cash advances and they charge you a high fee to have you give them a post dated check.

Answer 2

A cash advance is money that you basically charge to a credit card. Typically they have high rates of interest, so you should use them rarely if at all.

A mortgage is a loan for a home. They have much lower rates of interest (but of course you're borrowing a lot more money). They are tax-deductible, unlike your credit card cash advance.

I'm not aware of a mortgage tied to a credit card, but conceivably someone could offer one tied to an equity line (how much non-borrowed money you have for worth in the house) and make a card from it. I haven't seen it, but that doesn't mean it doesn't exist.

Answer 3

A mortgage (secured) is tied to physical property, a house or land, etc. that you agree to pay a payment to a bank on set terms over a period of time. You can also take cash advances on equity lines, but they are tied against your house.

Cash advance (unsecured) usually a credit card that you agree to repay. Interest rates are higher and not a great idea unless it's a live or die situation. You'll be paying for it!