Cash Advances

Cash Advances

A cash advance is a short-term loan from a bank or an alternative lender. The term also refers to a service provided by many credit card issuers allowing cardholders to withdraw a certain amount of cash. Cash advances generally feature steep interest rates and fees, but they are attractive to borrowers because they also feature fast approval and quick funding.

KEY TAKEAWAYS

• A cash advance is a type of short-term loan, often issued by a credit card company, and usually involving high interest and fees.
• Other types of cash advances include merchant cash advances, which are alternative loans for businesses, and payday loans, which have exorbitantly high rates and are prohibited in many states.
• A credit card cash advance won't directly hurt your credit score, but it will hurt it indirectly by lifting your outstanding balance and your credit utilization ratio, which is a factor in credit scores.