Cash Advance: What You Need To Know About This Credit Card Feature


There are times when you need a quick financial bailout. You can sell your stuff, borrow from family and friends or take a payday or emergency loan. But now, you also have the option of taking a cash advance on your credit card.

The advance is a loan against your card balance. The main advantage is that you get the money instantly. While before you could only get money from the ATM using your debit card, it is now possible to get cash using your credit card.

What Is Cash Advance

In simpler words, cash advance is a loan that you can borrow depending on your credit limits. It’s paid back with interest. It’s a feature that you’ll find in some credit cards. With this feature, you will get a PIN which you can then use to access money from an ATM.

You may be wondering how to get cash from a credit card? Well, just think about it in the same way as using a debit card, but in this case, you use your credit card.

The money you get is from a credit line, and the charge will go to the balance on your card. It will, therefore, not affect your bank account balance.

Factors to Note When You Want to Withdraw Cash From Your Credit Card

The first thing you should note is that, you can only withdraw within the limits of your card. The issuing body will set a cap on the amount of cash you can access with the advance cash feature. It is, therefore, important that you look at your documents with a keen eye to know how much you are eligible for.

In most cases, the advance limit will be lower than the card limit. The more your credit card limit goes up, the higher the advance you can get. You can get the necessary information from the issuer of your card on how you can increase your limits if need be.

If you are withdrawing from an ATM, you need to remember that you cannot remove more than a certain amount every day. Most ATMs have a limit on the number of transactions per card.

What Are The Benefits Of Credit Card Cash Advance?

  • Convenience

The benefits of being able to get money on your credit line are numerous. The most obvious being the convenience of accessing money quickly and easily. You may be traveling within or outside the country and may be wary of carrying cash.

With a credit card, you have the benefit of paying for your purchases or services, as well as getting hard cash when you need it.

  • Emergencies

Life has a way of throwing curveballs at us, and sometimes you may need to bail yourself out of a situation that you did not plan for. it is, therefore, great to know that you can get cash off credit cards using the advance feature.

  • Backup Plan

Living paycheck-to-paycheck can be difficult, and you may sometimes run low on cash. Having access to advance cash from your credit card will save you from having to take the costly payday loans. You also do not need to go through a lengthy loan approval process; all you need to do is find an ATM and get your cash.

The Cost Implication of Taking Cash Out of a Credit Card

Despite the bells and whistles of advance cash from a credit card, you need to be very careful. Remember, every shilling you take out is a loan. A loan that can accrue a lot of interest if you are not careful. If you’re not able to pay, it may have an impact on your credit report.

Let’s go back to our original point of looking at the documents keenly. There are certain fees that you are liable to incur with the advance feature. The fees vary depending on the issuer, so research properly before you sign up with a particular provider.

By signing up, you may pay a fee within the range of 5 to 10%. Not paying the advance balance will also result in a fee. The interest on the advance cash is also separate from that which you will pay on your purchases using the same card.

Also, note that every time you use the ATM, there is a fee that you will incur. While the fee may not be too high, it will be like a leaking tap. Every drop counts, so every shilling out of your account matters.

 Important Things to Note Before Taking an Advance

It can be tempting to be able to access hard cash every time you need. You, however, need to take note of certain things including:-

  • Only use it as your last resort, the lure of easy money could land you in financial problems
    • The advance will attract interest and will have an impact on your credit line.
    • You do not get to enjoy rewards like cash-back offers that come with credit cards
    • The interest rates and fees are normally higher
    • The advance will attract interest from day one. You do not get to benefit from the one month grace period that credit cards have.
    • You may want to consider alternatives to using the advanced feature on your credit card. A personal loan may be cheaper, or you can borrow from your family or close friends.

To Take or Not to Take an Advance on Your Credit Card

To take or not to take a cash advance is the question. Some will argue that it may not be the best option, however, it is important to take each case on merit. Some situations may arise that make it necessary for you to take a loan, and the advance from the credit cards can help.

Have financial discipline and make sure that you are up-to-date on your payments so that you do not affect your credit score. Do get in touch with us, so that one of our financial experts can answer any questions you may have on credit card advance cash. We will also share with you excellent tips on how to avoid falling into credit card debt traps.

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