Imagine taking out a loan against your credit card. That’s what a credit card cash advance is. A cash advance allows you to withdraw cash from your credit card from either an ATM machine or via a check provided by your credit card issuer. It kinda puts you in the mind of a short term loan. Grab your tea cups while we break down the REAL on credit card cash advances!
Transaction fee: The credit card issuer will charge you a transaction fee each time cash is withdrawn from your credit card.
ATM fee: There may be an ATM fee if you’re withdrawing cash from an ATM that is not that of your credit card issuer.
Cash Advance fee: You would be charged a fee that’s either a minimum flat rate or a percentage of the cash that was advanced to you, whichever is greater.
Separate Interest Rate: The cash advanced may have it’s own interest rate which may be a separate rate from the regular transactions made on your credit card. .
Higher Interest Rate: Cash advances will most of the time have a higher interest rate than your regular purchases.
No Grace Period: Most credit cards do not offer a grace period on the actual cash advance. This means you won’t get a complete billing cycle to pay the balance in full to avoid a finance charge.
🛑 Check with your credit card issuer(s) in regards to their rules on cash advances.
It’s suggested that credit cash advances be used for extreme financial emergencies. The fees associated with credit card cash advances beats getting a payday or title loan. .
If you’re using cash advantages for everyday living expenses such as groceries, gas, or to pay bills, then it is time to go create a budget, go over your budget, or evaluate your spending habits.