The best and worst ways to borrow money during the shutdown

Credit cards are one of the most common — and also one of the most expensive — ways to borrow money. Currently, credit card rates are at a record high, at an average of about 17 percent, according to Bankrate. The rate on a credit card cash advance is even higher.

For example, the Chase Freedom card has an interest rate of 16.74 percent to 25.49 percent, depending on your creditworthiness, but the cash advance APR is a flat 26.74 percent, according to Ted Rossman, an industry analyst at CreditCards.com.

In addition, consumers must pay a transaction fee — which is usually 3 percent to 5 percent of the cash advance amount — as well as interest on the loan.

“The truth is that a credit card cash advance can be among the best of a bunch of bad options when times get really tough, and a situation like the government shutdown can certainly be one of those times,” said Matt Schulz, chief industry analyst at CompareCards.com.

But before paying 30 percent interest or higher for a cash advance, “it’s much smarter to make purchases with the credit card itself, rather than taking out a cash advance,” added Ashley Dull, a credit strategist at CardRates.com.

Better yet, “consider taking a short-term loan from a credit union, where you can get much lower rates versus tapping into your personal line of credit,” Dull said.

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