How do cash advances on credit cards work?

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How do cash advances on credit cards work?

Postby acctingman69 » Tue Sep 21, 2010 5:38 pm

I see all these 0% APR for the first year. Is this ONLY on purchases?

Let's say I have a $2k limit. I get a $2k cash advance. Do I start paying interest on that (plus the standard 3-5% fee) right away, or am I given the 12 month grace period w/o accruing any interest.

My guess is that interest is accruing the day after my first billing cycle, so, I'd have to pay that $2k back in (25ish days)?


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Postby Generallisimo » Wed Sep 22, 2010 11:29 am

Actually, with most cash advance agreements that I have read, they start charging interest the moment you withdraw the money. Additionally, it should say on the agreement (the page that gives you all the information about fees and such) whether the promotional 0% APR also applies to cash advances (which it probably doesn't). Furthermore, there is usually a fee associated with a cash advance, so I would definitely ask them directly or just read the agreement very carefully (the one presented to new applying customers should provide all this information). Finally, your cash advance limit is always never more than half of your actual credit card limit. So if your limit was 2k, then your cash advance limit most likely will be 1k.

Unless you absolutely need that cash right now, try not to use a cash advance, or just pay with credit if you can! But at least their terms and rates are much better than anything you could get from a payday loan.

However, if you have Discover, you can withdraw money from pretty much any grocery store or target/walmart and it is counted as a purchase, not a cash advance.
Last edited by Generallisimo on Wed Sep 22, 2010 11:33 am, edited 2 times in total.

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Postby Mogul of Pineapples » Thu Sep 30, 2010 10:00 pm

As Generallisimo the interest starts accruing the same day. It never makes sense to do cash advances on credit cards unless it's an absolute emergency and there are no other options at your disposal.
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