A cash advance may seem like an easy way to get cash fast, but it can cost you a lot of money in interest and fees. Before you take out a cash advance, familiarize yourself with the terms, so you're not hit with an unpleasant surprise. And better yet, avoid a cash advance altogether.
Below, CNBC Select reviews the basics of a cash advance: what it is, the terms and fees, as well as better alternatives for getting cash quickly.
A cash advance is basically a short-term loan offered by your credit card issuer. When you take out a cash advance, you're borrowing money against your card's line of credit. You can typically get a cash advance in a few different ways:
Cash advances are an easy way to get cash fast, but they often come with hefty fees that outweigh any benefits. Before you take out a cash advance, review the terms so you're aware of the high charges you'll likely incur.
Cash advances have numerous terms and fees, as mentioned above, but you may wonder how much the whole thing may cost. Here's an example:
You wind up paying $99.50 in interest and fees if you took out a $500 cash advance and only paid $50 a month.
Taking out a cash advance may seem like a good idea in the moment, but it can quickly lead you to rack up debt. We recommend avoiding a cash advance altogether and opting for some alternative options that have better terms.