Definition: A cash advance is an amount of cash borrowed against your credit limit. You can take out a cash advance in two ways. First, by using your PIN at an ATM. Or, you can use a convenience check that your credit card issuer sent to you.
Cash advances come with fees and typically have higher interest rates than the interest rate for purchases. The cash advance fee can be charged as a percentage of the cash advance. The percentage charged usually between 2% and 4%. Some card issuers charge a flat fee regardless of the amount of your cash advance.
Cash advances don't have a grace period, meaning interest begins accruing on the balance as soon as you borrow it. You'll always pay a finance charge on a cash advance even if you pay it in full when your billing statement comes. To reduce the amount of interest you pay on a cash advance, pay it as soon as possible, even before you are billed for it.
