Having the ability to obtain cash fast can be a benefit when you’re in a financial pinch, but it’s important to understand the cost when it comes to using a cash advance with your lender/bank.
What is a Cash Advance?
A cash advance is the action of withdrawing cash at an ATM or bank against your credit card limit. This is most commonly used in emergency situations. Although convenient, they come at a higher cost than the typical interest you would find on your normal credit card charge. They are often associated with fees such as ash advance transaction fees, ATM fees, and a higher interest rate that begins accruing immediately.
There are currently three main ways to use a cash advance.- ATM withdrawal: Withdraw cash from an ATM using your credit card. This is the most common method.
- Bank withdrawal: Visit your bank to withdraw cash directly against your credit card limit.
- Over the phone: Some credit card providers allow you to request a cash advance over the phone, with the funds deposited directly into your bank account.
Is the cost worth it?
Cash Advance Calculator
Frequently Asked Questions
A cash advance is when you withdraw cash at an ATM or bank using your credit card. Cash advances come with higher fees and interest rate.
Cash advances typically come with a base fee, often around 5% of the amount withdrawn, along with ATM or out-of-network fees ranging from $2 to $15, depending on the ATM.
To minimize fees, consider only using cash advances when absolutely necessary.
Cash advances can increase your credit utilization and the balance on your card, which may negatively affect your credit score.
Yes, cash advances are generally more expensive than regular purchases. They often have higher interest rates, making the cost of borrowing much higher.
