A cash advance is a type of short-term loan that allows you to quickly access cash, typically by borrowing against your credit card's credit line. Essentially, it lets you withdraw cash from your credit card account, either at an ATM, a bank, or sometimes by using convenience checks or money transfer apps. Here are key points about cash advances:
- When you take a cash advance, you borrow money against your credit card limit.
- Cash advances often come with higher fees and interest rates than regular credit card purchases.
- Interest on cash advances usually starts accruing immediately, with no grace period.
- There is typically a fee for cash advances, often 3% to 6% of the amount withdrawn or a flat fee, whichever is greater.
- The amount you can withdraw is usually limited to a portion of your credit card limit, for example, up to 30% of your credit line.
- Cash advances can be completed at ATMs (with a PIN), at bank branches, or over the phone (if your card issuer allows).
- Using a cash advance should generally be for emergencies due to the high cost involved.
Overall, a cash advance is a quick way to get cash but tends to be an expensive form of borrowing because of the higher fees and interest rates compared to regular credit card use. It is important to consider these factors before taking a cash advance. If used responsibly and only when necessary, a cash advance can provide immediate financial relief, but it should not be considered a long-term borrowing solution.
