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. 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.
A cash advance allows you to borrow a certain amount of money against your credit card line of credit. You usually pay a fee for the service. A credit card cash advance is a withdrawal of cash from your credit card account. Basically, you're borrowing with your credit card to put cash in your pocket.
However, accepting a cash advance by credit card has costs and, in some cases, limits on the amount you can withdraw. You can only withdraw cash up to your card's cash advance limit, which you can find on the credit card account page (or app) or in the cardholder's agreement. When you're faced with an unexpected expense that your bank account can't handle, one way to get extra money is to get a cash advance on a credit card. There are many reasons why you might need quick and easy access to cash, and thankfully there are some alternatives to paying the high fees and interest associated with cash advances.
Your high-interest cash advance loan could last a long time if you don't manage it properly. 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. In addition to getting a credit card cash advance through an ATM, you can also use what is known as a convenience check. Not only does interest start to accrue immediately, but many credit cards also charge a higher APR on cash advances than on purchases and balance transfers.
Keep in mind that there are other transactions that could be considered cash advances, even if real cash never touches your hands. But cash advances come at a price, so don't rush into this decision without evaluating all other alternatives. If nothing else, strive to make more than your required minimum payment each month as you work to repay your cash advance. We recommend avoiding a cash advance altogether and opting for some alternative options that have better conditions.
If you plan to request a cash advance, you may want to look for a card with lower cash advance fees and a more competitive interest rate, as they may vary by issuer. While they may charge a processing or convenience fee, it should be cheaper than a credit card cash advance. Generally, this cash advance has a different APR than regular credit card transactions plus additional fees. Instead of taking a cash advance at an ATM, consider overdrawing your checking account with your debit card.
Generally speaking, the transaction fee, immediate interest, and high APRs associated with a credit card cash advance mean you should avoid them if possible.