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Do you know what Credit Card Cash Advances are?

Even for the most organized and prepared people, a personal financial crisis can come as an unpleasant surprise. It’s at those times, when you need cash quickly, that Cash Advances can be a very helpful alternative.

Credit Card Cash Advances
Source: Google

A Cash Advance will provide you with the money you need quickly, however you should exercise caution as a cash advance over time can be very costly.

For this reason, you should act carefully when applying for a loan. If you act responsibly and pay your cash advance on time, they can be an excellent tool for emergencies.

What is a cash advance?

A cash advance works like a short-term loan, provided as a lump sum of cash. It can be used to cover an unexpected expense or emergency that may come your way.

Unlike a cash withdrawal from your bank account, a cash advance must be paid back.

In other words, a cash advance is like using your credit card to “buy” money in a similar way to how you use your credit card to buy goods or services.

There are three types of cash advances available:

  • Credit card advances
  • Payday loans or payday advance
  • Personal loans or personal loans in installments

All these options can provide you with money quickly, however they have different characteristics from each other. Since our main focus is on helping you build a good credit history, in this article we will cover credit card cash advances.

How does a credit card cash advance work?

A cash advance can be requested from your credit card issuer easily. If your credit card has a PIN, you can get cash advances directly from an ATM, just like using a debit card. You also have the option of taking your card to a bank that offers an advance through your card’s payment network, such as Mastercard or Visa.

How much can you borrow and how much does a cash advance cost?

A credit card cash advance allows you to withdraw money from your credit card. The amount you can withdraw will be determined by the cash advance limit available to you. This limit will be visible to you on your recent copy of your credit card statement or on your online account.

It is also important for you to know that the cash advance limit on your credit account is often lower than the credit limit for purchases.

While it’s relatively easy to get a cash advance, it’s one of the most expensive ways to get some cash. This is because cash advances can come with a lot of fees. So always pay attention to the fine print so you don’t have any unpleasant surprises.

Written By

Copywriter/Editor and finance expert known for concise and informative articles on investing and wealth management. With experience simplifying complex topics, Roberto empowers readers to make sound financial decisions.

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