What is a cash advance and how does it work?

mm Paul Verbiton May 29, 2019
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Some credit card companies offer a “special” feature in your cards. It’s called, “Credit Card Cash Advance”, and it allows you to borrow money against your credit limit. In layman terms, your credit card company allows you to borrow money from them when you are running low.

A credit card cash advance can come in handy on a rainy day. It is among the most beneficial transactions offered by your credit card company, and it can save you in times of emergencies.

What Is a Credit Card Cash Advance?

As mentioned already, you withdraw advance cash against your credit limit. You can simply withdraw cash from any ATM by using your PIN. Later, you have to pay it back to the company with interest. However, the perks outweigh the debt, and you can easily maintain a healthy and a desired lifestyle.

How Can You Use the Cash Advance?

Cash advance can be used in the case of emergencies. Emergencies come unannounced, and your credit card can act as the backbone to support you during these times. You can pay off medical bills, medicine costs and hospital charges on the go.

Moreover, a credit card can also help you save face in moments of celebrations if you need fast cash, without the embarrassment. This way it can help you enjoy your life to the fullest.

What Is Your Cash Advance Limit?

Since the cash advance is issued against your credit limit, you will have to know your credit limit before trying to withdraw the money.

You can refer to the most recent copy of your credit card statement to find out your current credit limit. If you don’t have access to your recent credit card statement, alternatively, you can log into your online account and find your credit limit.

If you don’t have any balance on the credit card, you can withdraw money up to your credit limit. If you are already under some debt, then you can withdraw a lower amount of money.

How Can You Lower the Cash Advance Fee?

Credit card cash advances come with transaction fees and other service charges. However, you can reduce the fees and avoid having to pay too much with a few tips.

Since the interest starts accruing right away, you can minimize the interest payment by paying off as soon as possible. You should also try to minimize the cash advance to cater to your current and urgent needs. Don’t use cash advance for your extra-curricular activities and keep it strictly for emergencies.

What Do You Have to Say?

While credit card cash advance can help you in your times of emergencies and celebrations, the cash advance will always be there for you as a financial backbone to help you through your journey when you’re running low on money and you can easily pay off the balance at the end of the month, which makes cash advances an excellent option.

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Category: Blog, Lifestyle
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Paul Verbiton

I enjoy spotting opportunities and doing my best to grab them if I can. I am eager to see the world, I love taking photos and writing, coming up with topics that are pleasant to read, funny, and interesting at the same time.

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