Since your advance starts accruing interest the same day you receive your cash, start repaying the amount you borrow as soon as possible. Set the goal of refunding the amount in days rather than weeks. A cash advance allows you to use your credit card to get a short-term cash loan at a bank or ATM. Unlike a cash withdrawal from a bank account, a cash advance should be returned just like anything else you deposit on your credit card.
Think of it like using your credit card to buy cash instead of goods or services. You may have to pay a service fee if you request a cash advance at an ATM like you do for any other transaction. Your bank may also charge a fee for requesting a cash advance in person. A cash advance may seem like an easy way to get cash quickly, but it can cost you a lot of money in interest and fees.
If you have applied for a loan online, you may have granted an ACH authorization for the lender to electronically access your checking account for payment on the loan due date. Credit card cash advances allow you to access your line of credit to get cash when you need it, but it's important to understand the costs of a cash advance and know how credit card cash advances work before you withdraw them. Check your credit card terms to find out what your cash advance limit is and how much credit you have available for a cash advance. You see, your cash advance balance is separate from other balances you have on your credit card, including the purchase balance and the amount you owe on any balance transfer.
If your need is large, you can request a cash advance from a credit card, for example, without considering the interest on the cash advance and how you will pay it. A cash advance on your credit card may seem like a quick way to get money, but there are fees and risks to consider. Instead of taking a cash advance at an ATM, consider overdrawing your checking account with your debit card. A cash advance may still make sense compared to other ways to get a quick loan, such as a payday loan, which usually needs to be paid back before your next paycheck.
If nothing else, strive to make more than your required minimum payment each month as you work to repay your cash advance. As soon as you receive a cash advance with your credit card, you'll start charging yourself, and from two directions. Credit card companies like cash advances partly because they treat cash advances differently than buying interests. The reality is that credit card cash advances can be very expensive and often cost much more than you initially imagine.
In addition to getting a credit card cash advance through an ATM, you can also use what is known as a convenience check. Unfortunately, this means that you will have to pay interest on the cash advance even if you pay all the cash you withdrew when your statement arrives.