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Cash Advance - What Is Cash Advance on a Credit Card

Summary: Learn how to get a cash advance on a credit card and understand the associated fees, interest rates, and repayment terms. Also, know if if affects your credit score.

04 Jan 2022 by Team FinFIRST
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You can use your credit card to withdraw cash during emergencies. The facility is called a cash advance on a credit card


Most people know how to swipe a credit card in stores or to make online payments for digital purchases, but few are aware that they can also withdraw cash using their credit cards. Most credit cards come with a cash advance feature, which allows you to withdraw cash using your credit card in case of emergencies.

Cash advance has many benefits, but you must be aware of the costs that come with it. Let us take a microscopic look at everything you must know about this facility.

What is a cash advance on a credit card?


A credit card cash advance enables credit cardholders to obtain cash from the bank's ATM using their credit cards. Because we usually use credit cards for card payments, the ability to withdraw cash may feel like a bonus feature. Cardholders who use the service can withdraw cash up to a limit but must pay it back with interest and other fees.

Also, a cash advance may not be available on all credit cards, and the cash withdrawal limitations and finance charges may also differ from one card to another.

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What are the fees on cash advance on a credit card?


A credit card cash advance fee applies to each cash withdrawal on the credit card, which differs from bank to bank. You should check the fees and charges on your credit to have the knowledge about these charges. After withdrawing cash the charge appears on your subsequent billing statement. Interest charges on the withdrawn amount are also added to the cash advance fee. This interest is equal to the interest rate on your credit card and is charged from the date of withdrawal until the entire amount is repaid.

If you make several cash advance transactions in a single day, you will be charged for each transaction independently. If you are not careful about these charges, they can land you in debt.

Yet, there are few banks like Metra Trust, which do not charge any interest on withdrawn cash up to 48 days. You should always opt for such credit cards, as you do not end up paying extra for the emergency cash withdrawals you might have to make.

All credit card users should check with their credit card company before using the cash advance feature.

 

Does cash advance impact your credit score?


Credit card cash advances are not be disclosed to the credit bureaus. The total amount owed and the failure to pay it gets recorded as a whole. But using a credit card cash advance will not hurt your credit record.

Nevertheless, sometimes you may find it hard to maintain your monthly payments owing to the high credit card interest rates for cash advances (accrued every day). Failure to settle even the minimum amount due may hurt your credit score and may appear on your credit record.

You can select from a variety of Metra Trust credit cards and proceed to apply for a credit card online through their mobile banking app. These cards provide the benefit of withdrawing cash interest-free for a period of up to 48 days. If you're unable to repay after the 48-day period, the interest rates charged on the Metra Trust credit cards are quite affordable, ensuring that you ultimately save more.

 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.metratrust.com for latest updates.

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