What Is a Cash Advance on a Credit Card?
A cash advance on a credit card allows you to access funds through your credit card account, but not for free. Cash advance transactions typically include very high interest and fees. However, the tradeoff is that a credit card cash advance allows borrowers to easily gain access to the funds they need, more quickly than other types of loans.
How Do Cash Advances on Credit Cards Work?
Credit card cash advances involve borrowing against a cash advance limit on your account. Note that with this method, there is a cash advance limit that is usually smaller than your limit for purchases, which typically equals up to 30% of your credit line. For example, if you have a $3,000 credit line, you could potentially access up to $900 as a cash advance .You can find out your cash advance limit by looking at your credit card statement or calling your card issuer and requesting the information. Additionally, the APR for credit card cash advances is often several percentage points higher than the APR for purchases and balance transfers.
And although there is a grace period for purchases, which requires card issuers not to charge interest for at least 21 days after the payment due date, there is no grace period for credit card cash advances. Unfortunately, these types of transactions start accruing interest immediately after
How Can You Get a Credit Card Cash Advance?
When using a credit card, you have different options for taking out a cash advance.
- Online: Your card issuer may allow you to request a cash advance through its website or mobile app, saving you the hassle of taking a trip to request an advance.
- In person: If you have a credit card issued by a bank, you can take the card there and request a cash advance.
- At an ATM: You may be able to request a cash advance at your bank’s ATM. However, like most ATM transactions, you’ll need a PIN to be able to request a cash advance this way.
- Via convenience check: Your credit card issuer may also offer convenience checks, which you can write for the amount you need as a credit card cash advance.