Definition
Borrowing cash against a credit card at an ATM or bank counter. Cash advances usually carry an upfront fee, a higher APR than purchases, and no grace period: interest starts the moment the cash is dispensed.
Why it matters
It is one of the most expensive ways to borrow that is legal to advertise. Needing one regularly is a signal the budget or emergency fund needs attention more than the card does.
Example
A $400 cash advance charges a 5% fee ($20) immediately, then accrues interest at a 28% APR from day one, about $9 in the first month alone, even if the rest of the card is paid in full.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.