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Credit Card Cash Advance Information from Bank of America Learn what a credit card cash advance is with information on cash advances and credit card cash advance fees from Bank of America. credit card cash advance, cash advance on credit card, credit card cash advance fee
Credit Card Cash Advance Information from Bank of America Learn what a credit card cash advance is with information on cash advances and credit card cash advance fees from Bank of America. What is a credit card cash advance? Bank of America credit card cash advance, cash advance on credit card, credit card cash advance fee

Understanding credit card cash advances A credit card cash advance is a withdrawal of cash from your credit card account. Essentially, you’re borrowing against your credit card to put cash in your pocket, which can be convenient when you are occasionally short of funds. That said, there are costs to taking a credit card cash advance, and in some cases, limits on certain cash advances. Here’s what you need to know before you choose to make a cash advance with your credit card. The two kinds of cash advances Bank cash advance: This is when you use your credit card account for a loan by withdrawing cash in a branch or at an ATM or by transferring funds from your credit card for overdraft protection or immediate use. A bank cash advance can also include the purchase of foreign currency, money orders or traveler's checks from a nonfinancial institution, as well as person-to-person money transfers, bets, lottery tickets, casino gaming chips or bail bonds with your card or account number (including through the use of an enabled mobile device), which are referred to as cash equivalents. It’s important to know that bank cash advances have a transaction fee, generally have a higher annual percentage rate (APR), and often have a limit called a cash credit line, which is only a portion of your total credit line. Direct deposit and check cash advances: These cash advances include writing credit card checks, calling your bank or going online to transfer funds directly from your credit card to a deposit account. Unlike bank cash advances, there is generally no cash credit line or limit for direct deposit and check cash advances as long as they do not exceed your total credit limit. Direct deposit transactions from a credit card account may take up to five days to process, so you likely won’t receive funds immediately. Also keep in mind that by accessing cash this way, your money will be subject to the cash advance APR, and may be subject to transaction fees. When to consider using a cash advance Cash advances can be an important source of funds in an emergency, or a way to help you avoid overdraft fees. Here are a few other instances when you might want to take out a credit card cash advance. You need to pay by cash or debit and you don’t have enough money in your checking account Your short-term expenses are higher than usual because of an emergency or unplanned purchases Your paycheck is late or smaller than usual Factors to consider before using a credit card cash advance One thing to keep in mind when considering a credit card advance is that they often have higher APRs than purchases made with your credit card. They also typically have transaction fees. So before making a withdrawal, it’s a good idea to consult your credit card agreement to make sure you know any rules and fees. Transaction fee: You will pay a transaction fee for credit card cash advances APR: The APR for cash advances is often higher than for credit card purchases Interest-free period: Cash advances often begin accruing interest at the time of the withdrawal, meaning there’s no grace period Ways to limit the fees associated with a cash advance Limit transaction fees. Some transaction fees are a percentage of the overall advance; in that case, you could limit the fee by withdrawing only as much as you need. Other transaction fees may be a flat rate or a combination of a flat rate and percentage of the transaction. In this case, if you take all the cash you think you’ll need at once, instead of making multiple smaller transactions, you only pay the flat fee once. Plan your repayment. Remember, your repayment will be accruing interest until the amount is paid off. Always try to have a plan for how and when you’re going to pay back the advance. How to avoid taking a cash advance Make purchases with your credit card. If you have the option, you can often limit interest and transaction fees by charging purchases to your card rather than getting a cash advance. Avoid unnecessary purchases. Ask yourself if the purchase you intend to make with your cash advance is worth the extra fees, or if it can wait. Check your balance. Don’t use a cash advance as a buffer just because you’re unsure how much money you have in your bank account. Use Mobile BankingFootnote1 to check your balance and monitor when bills are deducted. Create a budget. A budget will help you compare your income to your costs, so you know how much you can save to cover unexpected expenses in the future. Build an emergency fund. Occasionally you’ll need to pay for things that aren’t in your monthly budget, such as car repairs. By building an emergency fund when things are going well, you may be able to avoid having to use credit card cash advances for these transactions. For more information about bank cash advances and direct deposit and check cash advances, refer to your credit card agreement or your credit card statement. You can also contact your credit card company for more information.

What is a credit card cash advance?

Understanding the ins and outs of a cash advance on a credit card

Understanding credit card cash advances

A credit card cash advance is a withdrawal of cash from your credit card account. Essentially, you're borrowing against your credit card to put cash in your pocket, which can be convenient when you're occasionally short of funds. However, there are costs to taking a credit card cash advance and, in some cases, limits on certain cash advances. Here's what you need to know before you choose to make a cash advance with your credit card.

The 2 kinds of cash advances

A credit card cash advance can be a real life-saver. But the fees and interest can be costly. So be aware of the advantages, downsides and your alternatives.

  • Bank cash advance: This is when you use your credit card account for a loan by withdrawing cash in a branch or at an ATM or by transferring funds from your credit card for overdraft protection or immediate use. A bank cash advance can also include the purchase of foreign currency, money orders or traveler's checks from a nonfinancial institution, as well as person-to-person money transfers, bets, lottery tickets, casino gaming chips or bail bonds with your card or account number (including through the use of an enabled mobile device), which are referred to as cash equivalents. It's important to know that bank cash advances have a transaction fee, generally have a higher annual percentage rate (APR) and often have a limit called a cash credit line, which is only a portion of your total credit line.
  • Direct deposit and check cash advances: These cash advances include writing credit card checks, calling your bank or going online to transfer funds directly from your credit card to a deposit account. Unlike bank cash advances, there is generally no cash credit line or limit for direct deposit and check cash advances as long as they don't exceed your total credit limit. Direct deposit transactions from a credit card account may take up to 5 days to process, so you probably won't receive funds immediately. Also keep in mind that by accessing cash this way, your money will be subject to the cash advance APR, and may be subject to transaction fees.

When to consider using a cash advance

Cash advances can be an important source of funds in an emergency or a way to help you avoid overdraft fees. Here are a few other instances when you might want to take out a credit card cash advance.

  • You need to pay by cash or debit and you don’t have enough money in your checking account
  • Your short-term expenses are higher than usual because of an emergency or unplanned purchases
  • Your paycheck is late or smaller than usual

Factors to consider before using a credit card cash advance

One thing to keep in mind when considering a credit card advance is that they often have higher APRs than purchases made with your credit card. They also typically have transaction fees. So before making a withdrawal, it’s a good idea to consult your credit card agreement to make sure you know any rules and fees.

  • Transaction fee: You will pay a transaction fee for credit card cash advances
  • APR: The APR for cash advances is often higher than for credit card purchases
  • Interest-free period: Cash advances often begin accruing interest at the time of the withdrawal, meaning there’s no grace period

Ways to limit the fees associated with a cash advance

  • Limit transaction fees. Some transaction fees are a percentage of the overall advance; in that case, you could limit the fee by withdrawing only as much as you need. Other transaction fees may be a flat rate or a combination of a flat rate and percentage of the transaction. In this case, if you take all the cash you think you’ll need at once, instead of making multiple smaller transactions, you only pay the flat fee once.
  • Plan your repayment. Remember, your repayment will be accruing interest until the amount is paid off. Always try to have a plan for how and when you’re going to pay back the advance.

How to avoid taking a cash advance

  • Make purchases with your credit card. If you have the option, you can often limit interest and transaction fees by charging purchases to your card rather than getting a cash advance.
  • Avoid unnecessary purchases. Ask yourself if the purchase you intend to make with your cash advance is worth the extra fees or if it can wait.
  • Check your balance. Don’t use a cash advance as a buffer just because you’re unsure how much money you have in your bank account. Use Mobile BankingFootnote1 to check your balance and monitor when bills are deducted.
  • Create a budget. A budget will help you compare your income to your costs so you know how much you can save to cover unexpected expenses in the future.
  • Build an emergency fund. Occasionally you’ll need to pay for things that aren’t in your monthly budget, such as car repairs. Build an emergency fund when things are going well and you may be able to avoid having to use credit card cash advances for these transactions.

For more information about bank cash advances and direct deposit and check cash advances, refer to your credit card agreement or your credit card statement. You can also contact your credit card company for more information.