How to Reduce the Costs of a Cash Advance

If you already have a credit card, it’s super easy to get a cash advance.

But it can also be super expensive. Before you borrow money from your credit card, make sure you understand how a cash advance works, how you can minimize cash advance fees, and if there are any better alternatives.

How Do Cash Advances Work?

A cash advance is a way to borrow cash from your credit card company. You can initiate your cash advance online, through cash advance checks sent with your credit card statement, or through an ATM.

To take money out of an ATM via a cash advance, you will need the PIN number associated with your credit card. You’ll then have to agree to all the cash advance fees before you can get your money. You might also incur ATM fees .

If you initiate the cash advance online, you can set it up to be directly deposited into your checking account via ACH transfer. You will have to agree to all the cash advance fees before getting your money this way, too.

Another way you might be able to take out a cash advance is with convenience checks that your credit card issuer sends with your statements. These might come with every statement, every few months, or once a year at renewal depending on your credit card issuer. As soon as you sign and hand over the check, you’re agreeing to the terms of the cash advance.

Your cash advance limit is likely to be smaller than the purchase limit for your credit card. Check your documentation or contact your card issuer to find your credit limit for a cash advance.

What Makes Credit Card Cash Advances so Expensive?

Cash advances are an extremely expensive way to borrow — even more expensive than using your credit card to make a purchase. Cash advances come with extra transaction fees, and higher APRs than regular credit card purchases. And that APR starts accruing immediately unlike credit card purchases .

Transaction Fees

The first expense to take into account is the transaction fee. This fee is usually…

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