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What is a Cash Advance?
A cash advance is one of the features offered by credit card services whereby the card holder is able to withdraw money from their current balance. Usually the amount that can be borrowed in the form of cash as cash advance is a certain percentage of the credit limit on the card. In every billing statement both the existing credit limit and the cash advance limit is stated.
The means of utilizing the cash advance facility is very convenient as one has to go no further than the neighborhood ATM to withdraw the cash advance amount desired. A card holder is entitled to withdraw cash advance upto the limit specified as cash limit. In case this limit is exceeded, the ATM may still dispense the cash but electronically flag the transaction. Cash advance in excess of the specified limit is usually treated as exceeding the credit limit in purchases with extra charges.
Cash advance in credit cards is an extremely expensive option of obtaining cash. It is therefore advisable to seek other alternatives first and when all the others are exhausted, only then should the cash advance option be resorted to. Credit card info.com reports:
In the world of credit cards, a cash advance is an option cardholders can use to borrow actual currency against their current balances. For most credit card users, the amount of cash available for a cash advance is a small percentage of their overall credit limit. Statements issued by the bank will generally provide two sets of numbers: the credit limit and the cash advance limit.
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