All About Credit Card Cash Advance in Just 150 Words

  | Published: 02 October 2019 | Last Updated On: 15 January 2021

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The Cash Advance facility refers to the withdrawal of cash through a credit card at the ATM of the concerned bank. Since you generally use such a card for cashless transactions, this cash withdrawal option is an additional facility that the banks offer.

Now, just like everything else, even feature comes with a certain limit. Your bank allows you to make cash withdrawals only within the permissible limits. Moreover, you will have to make the repayment along with the interest and the other charges.

Not all credit cards come with this feature and the cash advance limit may vary from one card to another. Hence, you should be aware of such conditions applicable to your card.

In order to know the details of this cash withdrawal facility, you can go through the terms & conditions related to your card. Alternatively, you can contact the customer care representative of the bank.

As promised, we have explained about the cash withdrawal facility in just 150 words. If you need more comprehensive knowledge about this, continue reading.

How Can I Avail Cash Using this Facility?

Obtaining cash using your card is pretty easy. Let’s see what steps you need to take for the same.

Go Through your Most Recent Statement

You can go through your latest card statement for determining the amount of cash you would be able to withdraw. The limit on cash withdrawal is dependent upon the kind of card you possess.

Going through the Fine Print

Review the terms mentioned in the agreement and your credit card offers for understanding whether there are any charges involved in withdrawing cash. Typically, the bank charges a one-time fee along with an interest. You may find the cash advance rates to be higher than the rates charged on other transactions.

ATM Withdrawal

You can take out the funds through an ATM that accepts your card. You just need to select the option of ‘credit’ on the machine, when asked to choose between credit, savings, or checking account. Make sure you remember your PIN (Personal Identification Number) that was assigned to your card.

Withdrawal from the Bank

Other than the ATMs, you can also visit the concerned bank to withdraw cash against your cash advance limit.

What does a Cash Advance Charge and Limit Mean?

Your cash advance limit is the maximum amount of cash that you can withdraw through your card. Usually, this limit is included in the credit limit of your card. The bank will inform you about this limit while issuing your card.

The cash limit may differ from one card to another and also from one customer to another. This limit may change periodically as per the discretion of the bank. The changes may depend upon various factors such as your repayment behavior, patterns of spending using the card, payment-related defaults, and other details from your credit report.    

Cash advance charge is the fee levied on withdrawing cash through your credit card. Whenever you use your card for withdrawal, you will have to pay this fee, which is a certain percent of the amount withdrawn. Even if you have made more than one transaction in a day, the bank will levy this fees on each of these transactions depending upon the amount withdrawn.

How Good is this Cash Advance Facility for Me?

With the following points, you will know the benefits of this facility for you.

No Paperwork Needed

If you go for a personal loan, car loan, home loan, or other types of credit, you will have to submit your documents with the financial institution or the bank. Apart from that, you will have to wait for the loan to get approved. However, for a cash advance on your card, you do not need any kind of paperwork or approval.

Immediate Funds

Another major benefit of this facility is that you get the desired amount instantly, that too in the liquid form. Moreover, the facility is available round the clock because the ATMs are accessible 24/7 and are available in maximum locations across the Emirates.

Not-so-strict Withdrawal Limit

No late payments, good spending habits, and a decent credit score may help you in getting your credit limit enhanced. After your bank approves your request to enhance your credit limit, your withdrawal limit exceeds automatically.

Would this Cash Advance Facility Prove to be a Bad Idea?

Let us now see the drawbacks of this facility and how it can be a bad idea for some of you.

No-Interest Period

Cash withdrawals do not involve any interest-free duration, the interest keeps piling up until you do not make the repayment of the amount entirely. This interest is charged starting from the transaction date.

Rewards and Cashbacks

These cash transactions do not qualify for any kind of rewards. Irrespective of the amount of transaction, you do not get any rewards for such cash withdrawals.

Rate of Interest

Generally, the rate of interest charged on these cash transactions is quite similar to that charged on the card transactions. However, as discussed above, the interest on cash advance starts piling up from the transaction date till the time the entire repayment has been made.

Fees Charged

Whenever you avail this facility, you will have to pay the cash advance fees. This fees further involves finance charges that are charged from transaction date to the repayment date.

The Bottom Line!

Almost all the Best Credit Cards in the UAE come with the feature of cash advance. Making a cash withdrawal from the ATM using your credit card is no different from making a withdrawal via your debit card. All you have to do is visit the nearest ATM and follow the cash withdrawal instructions for obtaining the money.

Just make sure that you know the terms & conditions regarding this facility, along with the applicable fee and charges. And of course, do not forget about the cash limit available on your card. Hand down, with this feature, the credit cards have successfully revolutionized the loan facility for the card members.