Credit card cash advances are cash withdrawals from your credit card account.  They’re immensely helpful in certain situations, such as emergencies that require urgent, short-term access to cash.

Read on to learn about the main aspects of credit card cash advances.

Credit Card Cash Advance Fees & Interest Rates Differ From Regular Transactions

If you’re looking to take out a credit card cash advance, we recommend checking the fees and interest charged by your bank. This is because the interest on credit card cash advances is typically higher than the one you’re used to paying for regular transactions made using your credit card.

Credit card cash advances are also subject to a fee worth a certain percentage of the amount you withdraw. It’s important to keep this in mind in order to stay within budget.

Credit Card Cash Advances Don’t Have Grace Periods

One of the most important aspects of credit card cash advances is the lack of a grace period. In other words, banks won’t waive the fees and interest on credit card cash advances like they do with regular credit card transactions—irrespective of why you can’t pay back in time.

Credit Card Cash Advances Strongly Impact Credit Scores

Credit scores refer to a three-digit number that notifies lenders of your default history and risk. Taking out a credit card cash advance lowers your credit score because it’s a high-risk loan. This is why we recommend using this method as a last resort during emergencies.

With that said, paying off your credit card regularly increases your credit score. In other words, the solution to preventing your credit score from dipping is to take out a credit card with solid benefits and stay on top of payments instead of avoiding credit cards altogether. 

Wondering what kind of credit card will give you the best terms on cash advances? Great Canadian Rebates can help you find out.

We offer detailed information on the top credit cards in Canada for online purchase rebates, rewards, points for air tickets and hotel stays, and more. We also give members exclusive rebates for transactions with partner merchants. Visit Great Canadian Rebates to learn more about the exciting rebates we offer.