If you ever need cash, but you’re only carrying a credit card, you can get something called a cash advance. A cash advance is when you get cash from a bank or an ATM, but instead of withdrawing from a checking or savings account, you’re charging it to your credit card.
This can be really convenient, but that convenience comes at a cost. There are usually fees – as much as five percent of the amount you’re taking out. So if you’re getting a cash advance of one hundred dollars, expect to see a charge of one hundred and five dollars.
Then there are the interest rates, which are often much higher than your normal interest rates on your credit card. And the interest on a cash advance starts accruing immediately. There’s no grace period until your next statement like with normal purchases.
All things considered, I recommend staying away from cash advances. If I had to get one, I’d pay it back immediately to avoid the interest charges.
Have you ever gotten a cash advance? What was your experience like? Let me know in the comments.