Cash advances are a simple method to borrow money quickly, but they frequently have high fees that overshadow any advantages.
Review the terms before obtaining a cash advance so that you are informed of the possible high fees that you will pay.
APR for cash advances: Compared to purchases or balance transfers, cash advances have a different, frequently higher, interest rate.
For 18 months, the Citi® Double Cash Card, for instance, offers a 0% introductory APR on balance transfers.
After that, the variable APR ranges from 15.49 to 25.49 percent, although cash advances have a variable APR of 26.74 percent.
Cash advance fee: Your card issuer normally levies a cash advance fee, which ranges between 3 and 5 percent of each cash advance you request.
For instance, a $250 cash advance will run you $12.50 with a 5% fee.
You can anticipate paying a fee for obtaining a cash advance whether you use an ATM or go to a bank.
No waiting period:
There is no benefit to a grace period for cash advances.
This means that you will start to be charged interest as soon as you withdraw a cash advance.
That differs from when you use your card to make a purchase because the issuer often provides a grace period of at least 21 days during which, if your amount is paid in full before the due date, you won’t be charged interest.
Cash advances frequently have a separate credit limit that is less than your total credit limit.
It’s possible that you can only withdraw a few hundred dollars.
Although a cash advance may seem like a simple way to borrow money quickly, the interest and costs associated with one can add up quickly.
Make sure you are informed with the terms before taking out a cash advance to avoid getting caught off guard.
Better yet, steer clear of financial advances entirely.
The fundamentals of a cash advance are discussed below, along with better options for receiving cash quickly.
How cash advances operate
A cash advance is essentially a brief loan provided by the company who issued your credit card.
When you obtain a cash advance, you are borrowing funds from the available credit on your credit card.
A cash advance is often available in the following ways:
At an ATM: If you have your credit card’s PIN, you can acquire a cash advance there.
If you don’t have a PIN, you can ask your card’s issuer for one.
Remember that getting a PIN could take a few business days and that there are frequently cash withdrawal limitations at ATMs.
On the spot:
Check for convenience
Convenience checks that you can use to make a check to yourself may have come with your credit card.
Then you can deposit it or cash it out.
Terms and costs of cash advances
Cash advances are a simple method to borrow money quickly, but they frequently have high fees that overshadow any advantages.
Review the terms before obtaining a cash advance so that you are informed of the possible high fees that you will pay.
APR for cash advances: Compared to purchases or balance transfers, cash advances have a different, frequently higher, interest rate.
For 18 months, the Citi® Double Cash Card, for instance, offers a 0% introductory APR on balance transfers.
After that, the variable APR ranges from 15.49 to 25.49 percent, although cash advances have a variable APR of 26.74 percent.
Cash advance fee: Your card issuer normally levies a cash advance fee, which ranges between 3 and 5 percent of each cash advance you request.
For instance, a $250 cash advance will run you $12.50 with a 5% fee.
You can anticipate paying a fee for obtaining a cash advance whether you use an ATM or go to a bank.
No waiting period:
There is no benefit to a grace period for cash advances.
This means that you will start to be charged interest as soon as you withdraw a cash advance.
That differs from when you use your card to make a purchase because the issuer often provides a grace period of at least 21 days during which, if your amount is paid in full before the due date, you won’t be charged interest.
Cash advances frequently have a separate credit limit that is less than your total credit limit.
It’s possible that you can only withdraw a few hundred dollars.
