What is a Cash Advance? What is a Cash Advance on a Credit Card? How to Get Cash Advance from Credit Card?

 

What is a Cash Advance? A Cash Advance is a financial service that allows you to borrow money from a lender or financial institution. often in the form of cash for a short period. It is typically used for urgent or immediate financial needs. Main features of a cash advance include:

Immediate Access to Cash: A cash advance provides you with quick access to funds, which can be helpful in emergencies or situations where you need cash.

Higher Costs: Cash advances usually come with higher fees and interest rates compared to traditional loans. The cost can be in the form of a flat fee or a percentage of the amount you borrow. Example: John who needs $100. He has two options for obtaining the money: a traditional personal loan and a cash advance on his credit card. Traditional Person Loan John goes to a local bank for a traditional personal loan. The bank offers him the loan with a 10% annual interest rate (APR). The loan term is 1 month. Interest: ($100 x 10% APR) / 12 months x 1 month = $0.83 Total Cost: $100 (loan principal) + $0.83 (interest) = $100.83 Cash Advance on Cash Credit His credit card company charges a cash advance fee of 5% and an interest rate of 20% APR. There's no grace period, so interest starts accruing immediately. Cash Advance Fee: 5% of $100 = $5 Interest: ($100 x 20% APR) / 12 months x 1 month = $1.67 (Note that interest starts accruing immediately) Total Cost: $100 (cash advance) + $5 (cash advance fee) + $1.67 (interest) = $106.67   Comparison: The traditional personal loan (Option 1) cost John $100.83. The cash advance on his credit card (Option 2) cost him $106.67.

No Grace Period: Unlike regular credit card purchases, where you may have a grace period to pay the balance without incurring interest, cash advances often start accruing interest immediately from the date of the transaction.

Short Repayment Period: Cash advances are usually short-term loans, typically due by your next billing cycle. This means you must repay the borrowed amount, fees, and interest quickly.

Sources: You can obtain cash advances from various sources, including credit cards, Credit Apps, payday lenders, or banks. Each source may have its terms and conditions.

 

 

What is Cash Advance on Credit Card? A cash advance on credit card is a specific financial service offered by credit card issuers that allows cardholders to withdraw cash from their available credit line. Here's how it works:

Credit Card Usage: You can use your credit card to withdraw cash from an ATM or visit a bank and request a cash advance.

Credit limit and Cash Advance limit: Your credit card has a total credit limit, which is the maximum amount you can charge on the card for purchases. In addition to your credit limit, your card may have a separate cash advance limit, which is usually lower than your credit limit. This limit sets the maximum amount you can borrow as a cash advance.

Fees and Interest: Cash advances on credit cards typically come with costs, such as a cash advance fee (usually a percentage of the amount you're borrowing) and higher interest rates. Interest on cash advances often begins accruing immediately from the transaction date.

 

 

How to Get a Cash Advance from a Credit Card? ATM Cash Advance: Step1 Locate an ATM that accepts your credit card. This information is often found on your credit card provider's website or by contacting customer service. Step2: Insert your credit card into the ATM and enter your Personal Identification Number (PIN) to verify your identity. Step 3: Select the "Cash Advance" or "Withdrawal" option and specify the amount you want to withdraw. Step 4: Confirm the transaction. The ATM will dispense the cash you requested, and your credit card balance will be increased by the amount of the cash advance.

Bank Cash Advance:  Step 1: Visit a bank branch where you hold a credit card or where your credit card issuer has a branch. Step 2: Provide your credit card and identification to the bank teller to request a cash advance. Step 3: Specify the amount you want to withdraw and sign any necessary paperwork. Step 4: The bank will process the transaction, and you'll receive the requested cash. The bank teller will update your credit card balance accordingly.

Online Cash Advance: Step 1: Log in to your credit card issuer's online account portal. Step 2: Look for the "Cash Advance" or "Request Cash" option. Click on it to start the process. Step 3: Specify the amount you want to withdraw and confirm the transaction. Step 4: The requested funds will be deposited into your linked bank account or made available for you to pick up at a designated location, depending on your credit card issuer's policies.

Over the phone Cash Advance: Step 1: Call your credit card issuer's customer service number, typically found on the back of your credit card or on your billing statement. Step 2: Follow the automated prompts or speak to a customer service representative. Step 3: Request a cash advance, specifying the amount you need. Step 4: Provide any required information, such as your credit card number, social security number, and personal details. Step 5: The representative will process your request, and the funds may be deposited into your bank account or made available for pickup, depending on your issuer's procedures.