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A cash advance lets you withdraw cash using your credit card, usually through an ATM. While it seems convenient, it’s one of the most expensive ways to access money. Cash advances typically have higher APRs than regular purchases, often exceeding 25%. Worse, they begin accruing interest immediately, with no grace period. This means you’ll owe interest from the very day of the transaction. On top of that, issuers often charge a cash advance fee—commonly $10 or 5% of the amount withdrawn.
Because of these downsides, financial experts recommend avoiding cash advances unless absolutely necessary. Alternatives like using a debit card, personal loan, or even asking your bank for overdraft protection are usually cheaper. If you must take a cash advance, paying it off as quickly as possible is essential to minimize costs. For most consumers, cash advances are best seen as a last resort rather than a regular option.
By Quiz Coins
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