How Does a Credit Card Cash Advance Work?

How Does a Credit Card Cash Advance Work?

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Credit cards are accepted more places than ever before, but there are still a few places where you may need cash. If you’re in a bind, a credit card cash advance can seem like a good way to get quick cash. But should you do it?

The reality is that credit card cash advances can be very expensive — and they often cost a lot more than you initially realize. Although they can occasionally be better than the alternative, you should consider a credit card cash advance only as a last resort. Here’s what you need to know before you use a credit card cash advance.

On This Page

  • How to get a credit card cash advance
  • The high costs of a credit card cash advance
  • Cash advances that aren’t actually cash
  • How to pay off a credit card cash advance
  • When should you get a credit card cash advance?
  • Alternatives to a credit card cash advance
  • Still have questions?

How to get a credit card cash advance

At its most basic, a credit card cash advance is like taking out a small loan from your credit card issuer — a small, but very expensive loan (more on that below). You only withdraw cash up to your card’s cash advance limit, which you can find on your credit card account page (or app) or in your cardholder agreement.

Your credit card cash advance limit will typically be lower than your credit limit, with a typical limit falling between 20% to 50% of your total spending limit. For example, if you have a $5,000 credit limit on your card, your cash advance limit will likely be less than $2,500. Cardholders with higher credit scores tend to have higher spending and cash advance limits.

You can get a credit card cash advance at a regular ATM, provided you have your cash advance PIN. In most cases, you’ll need to proactively request your cash advance PIN from your issuer. Some issuers may provide your cash advance PIN through your online account, but you may need to call. The card issuer will likely send your cash advance PIN by mail if you make the request by mail or phone.

Before you even consider a credit card cash advance, make sure your credit card issuer actually allows them. You can see if your card can be used for a cash advance by checking your cardholder agreement.

In addition to getting a credit card cash advance through an ATM, you can also use what’s known as a convenience check. Often sent in the envelope with your card, convenience checks can be used just as you would a personal check (we offer a quick guide to writing a check if you’re from the cards-only era).

The high costs of a credit card cash advance

The allure of credit card cash advances is no mystery; when you need quick cash, the convenience of hitting an ATM with your credit card is no small thing. But you should be aware of all of the costs before you start punching in PINs.

As soon as you get a cash advance with your credit card, you start getting charged — and from two directions. First, the transaction itself will come with a cash advance fee. This fee will generally be a percentage of the cash advance amount, with 3% to 5% fees being typical.

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