Cash Advance

AAA

DEFINITION of 'Cash Advance'

A service provided by many credit card issuers allowing cardholders to withdraw a certain amount of cash, either through an ATM or directly from a bank or other financial agency. Cash advances typically carry a high interest rate - even higher than credit card itself - and the interest begins to accrue immediately. On the plus side, cash advances are quick and easy to obtain in a pinch.

INVESTOPEDIA EXPLAINS 'Cash Advance'

Sometimes businesses with less-than-perfect credit use cash advances to finance their activities. In some instances these advances are even paid for with future credit card receipts. The amount of the cash advance depends on the credit score of a business and its credit card sales. In almost all cases, cash advances should be viewed as a method of last resort.

RELATED TERMS
  1. Credit Card

    A card issued by a financial company giving the holder an option ...
  2. Credit

    1. A contractual agreement in which a borrower receives something ...
  3. Cash Trigger

    A condition that triggers an investor to make a trade or take ...
  4. Interest

    1. The charge for the privilege of borrowing money, typically ...
  5. Revolving Credit

    A line of credit where the customer pays a commitment fee and ...
  6. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
RELATED FAQS
  1. What are the different types of cash advances?

    There are a few different types of cash advances with varying features, but the common denominators among all cash advances ... Read Full Answer >>
  2. How does interest work on a cash advance from my credit card?

    Many credit card lenders treat interest on cash advances differently than interest on regular purchases. For starters, the interest ... Read Full Answer >>
  3. Does a cash advance hurt my credit score?

    Taking out a cash advance has no direct impact on your credit or credit score, but it can have an indirect impact in various ... Read Full Answer >>
  4. What's the difference between a balance transfer and a cash advance?

    Balance transfers and cash advances are features of credit card accounts designed to give consumers access to cash for different ... Read Full Answer >>
  5. What are some examples of overdraft protection?

    The overdraft fees for a checking account can be substantial, but most banks offer several methods of overdraft protection. ... Read Full Answer >>
  6. How do prepaid debit cards work?

    Prepaid debit cards work almost like a combination of a credit card and a checking account. Prepaid debit cards are issued ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    Watch Out For Changes In Credit Card Agreements

    If a credit card company changes its terms, you could pay a steep price. Find out how to stay informed.
  2. Credit & Loans

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  3. Budgeting

    Should You Pay In Cash?

    Avoiding all forms of plastic payment can do wonders for your stress level and pocket book.
  4. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  5. Forex Fundamentals

    Bitcoin Transactions Vs. Credit Card Transactions

    We provide an overview of the differences between bitcoin and credit card transactions, and the advantages of using one over the other.
  6. Credit & Loans

    The Pros & Cons Of Personal Loans vs. Credit Cards

    One is not like the other. We help you decide where to borrow money from.
  7. Credit & Loans

    How Is Cashback Profitable For Credit Card Companies?

    Cashback rewards are not as beneficial to the consumer as they might initially seem.
  8. Savings

    Why Do Credit Cards Expire?

    Credit cards expire for more reasons than you could imagine – including, so you don't forget you have the card.
  9. Credit & Loans

    Meet The Company Behind Your FICO Score

    There are other credit scores that evaluate lending risk, but FICO is still the choice of most U.S. lenders.
  10. Stock Analysis

    How MasterCard Likely Earned a Spot in Your Wallet

    An in depth look at MasterCard and its future prospects as an investment.

You May Also Like

Hot Definitions
  1. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
  2. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  3. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  4. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  5. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  6. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
Trading Center