Bail Bonds and Credit Card Cash Advances???

Over the years, a few of my clients have experienced their credit card company categorizing our bail bond premium as a cash advance. This is clearly a misunderstanding by the credit card companies as to what type of transaction has taken place. They assume that the cardholder is receiving cash in order to post a bond at the jail. This could not be further from the truth. Moreover, when this mixup occurs, the cardholder believes that we as the bail bond agency has some sort of control as to how the charge is sent through...not true again! We put this through as a normal charge. We don't even have an option to assign a charge as a cash advance, and we never give cash back to the cardholder.

Here is an explanation regarding how cash advances work as written in WiseGeek.com...

In the world of credit cards, a cash advance is an option cardholders can use to borrow actual currency against their current balances. For most credit card users, the amount of cash available for a cash advance is a small percentage of their overall credit limit. Statements issued by the bank will generally provide two sets of numbers: the credit limit and the cash advance limit.

Receiving a cash advance can simply be a matter of using a credit card at the nearest ATM. Many electronic banking machines offer credit card users the option of a cash advance. As long as the requested amount does not exceed the current cash advance limit, the ATM or other electronic banking machine should dispense real currency. If the amount of the cash advance does exceed the current limit, the ATM may still dispense the money but also electronically flag the exchange. An unauthorized cash advance might be handled in the same manner as a purchase over the credit limit.

Even in a world where debit and credit cards have almost replaced cash, there are still some services and vendors which require immediate cash payments. Taking out a personal loan for a relatively small amount of cash could prove expensive, while debit cards can only supply what currently exists in a savings or checking accounts. During a cash emergency, such as paying the deductible on emergency dental work or a visit to the veterinarian, the best option may be to take out a cash advance against the balance of a credit card.

Using a cash advance option can prove to be expensive, so it's always best to explore other payment methods before incurring more debt. Any money gained through a cash advance will be added to the balance owed to the bank, which includes interest payments and other finance charges. Interest on some unsecured credit cards can reach 23% at times, which can quickly swallow up any benefits of a cash advance. This is why consumers should only borrow enough cash to resolve their financial obligation and make a sincere effort to pay back any cash advance quickly.