Borrowing a certain amount of cash as an advance is possible in most credit cards. You cannot likely borrow up to your regular limit though your cash advance limit maybe a few hundred dollars or thousands of dollars. By contacting your card issuer or by looking at your credit card statement, you can find how much is your limit for a cash advance.
The credit card company typically charges fees and interest on the cash advance since you are borrowing money. You don’t withdraw it from a checking account where you already have the funds and compared to a regular purchase, the rate is usually much higher. Your credit utilization ratio or the percentage of available credit you’re using will ding especially if you’re using it for a cash advance and you push its limit too high.
Choose the card you can pay off the fastest or with the lowest cash advance interest rate if you have multiple cards. Also, cards that already have a high balance should never be used for cash advances.
There are a few different ways to get a cash advance if you think it is the best solution for your current situation:
A steep price tag usually comes with credit card cash advances. Compared to the interest you would pay on a standard credit card purchase, typically you will pay more and sometimes several percentage points more. Cash advances’ interest rates can top 25%. Know all the associated costs and read your cardholder agreement before you take out a cash advance.
It would be best to consider alternative options first before getting a credit card cash advance because the cost of borrowing one can be so high.
Cash advances are usually fast and easy to obtain if you have a credit card. But the cost of borrowing is so steep due to the sky-high interest rated and fees. If you are in a true financial emergency and have exhausted other more affordable options, that is the time you can turn to a cash advance. Be sure also to check if you can repay it quickly and on time.
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