What a credit card cash advance gives you
A credit card cash advance lets you withdraw cash quickly from your card when you need money fast. It can be useful in an emergency — the money is available immediately and doesn’t require a bank transfer or loan approval.
How it works
Cash advances are treated differently from regular purchases. You can take money from an ATM, a bank, or sometimes via a convenience check supplied by your card issuer. The amount you can borrow is usually limited by a separate cash advance limit on your card.
Costs and drawbacks
- High interest rates: Cash-advance APRs are typically much higher than the rate for card purchases, and interest starts accruing right away.
- Transaction fees: Issuers commonly charge either a flat fee or a percentage of the amount borrowed, or both.
- No rewards or grace period: Cash advances usually don’t earn points, miles, or cash back, and they don’t benefit from the interest-free grace period that many purchases have.
- Possible ATM and foreign fees: Withdrawing cash from an ATM or abroad can add extra charges on top of the card issuer’s fees.
When it makes sense — and when it doesn’t
A cash advance can be sensible for a short-term emergency when you need cash immediately and have no cheaper options. It’s generally a poor choice for planned spending or ongoing expenses because the costs add up quickly.
Practical tips for using and repaying a cash advance
- Borrow only what you need: Keep the amount small to limit fees and interest.
- Repay quickly: Interest accrues immediately, so paying the balance as fast as possible reduces total cost.
- Check your cash limit: Know the separate limit and fee structure before withdrawing.
- Consider alternatives: Look at a short-term personal loan, balance transfer, or tapping an emergency savings fund if those options are cheaper.
Bottom line
A credit card cash advance can solve a short-term cash crunch, but it comes with high costs and few benefits. Use it sparingly, understand the fees and interest, and prioritize fast repayment or a lower-cost alternative.