A cash advance is borrowing cash directly against your credit card's credit limit — at an ATM, bank branch, or via convenience check. Cash advances carry a higher APR than purchases, have no [[grace-period]], begin accruing interest immediately, and include an upfront fee — making them one of the most expensive forms of short-term borrowing.
Credit card cash advances are a distinct transaction type from purchases. Most cards charge a cash advance APR of 25–30% — several points higher than the standard purchase APR — plus a transaction fee of 3–5% of the amount advanced (minimum $5–$10). Unlike purchase balances that enjoy a [[grace-period]] when you pay your [[statement-balance]] in full, cash advances begin accruing interest at the cash advance APR the moment the transaction posts. Payment allocation rules matter: under the CARD Act, issuers must apply payments above the minimum to the highest-APR balance first. However, the minimum payment is applied to the lowest-rate balance first — meaning if you carry both a purchase balance and a cash advance balance, your minimum payment goes to purchases, leaving the high-rate cash advance balance growing. For consumers who need short-term liquidity, lower-cost alternatives include personal loans, paycheck advance services (regulated under state laws), or borrowing from family. For business owners, a [[business-line-of-credit]] or [[working-capital]] loan is substantially cheaper than card cash advances.
No, but both are high-cost short-term credit. A cash advance is against your existing credit card limit. A payday loan is a separate small-dollar loan, often with annualized costs exceeding 300%. Both should be last resorts.
Not directly as a transaction type, but it increases your [[credit-utilization]] ratio and outstanding balance, which can lower your score. Struggling to repay it — missing payments — will have a direct negative impact.