A cash advance is a short-term loan you can obtain through your credit card. Instead of using your credit card to make purchases, you withdraw cash, which is then added to your credit card balance. It’s typically accessed through an ATM, bank withdrawal, or a convenience check provided by your credit card issuer.
Key points about cash advances: 1. **High Interest Rates**: Cash advances often come with higher interest rates than regular credit card purchases. Interest starts accruing immediately, without a grace period. 2. **Fees**: Many credit card companies charge a cash advance fee, usually a percentage of the amount withdrawn (commonly 3-5%). 3. **ATM Fees**: If you withdraw cash from an ATM, you may also face fees from the ATM provider. 4. **Limit**: Cash advances typically have lower credit limits than regular purchases, meaning you can't withdraw your entire credit limit as cash.
Due to the high costs associated with cash advances, they're generally seen as a last resort for accessing money quickly.