Credit Card Glossary
Cash Advance Fees
This fee represents the cost of cash advances from your credit card. The main drawback of getting a cash advance is that the interest rate is always considerably higher than what you pay as interest for purchases on your credit card.
This means that if you take a cash advance to buy something it is more costly to you to pay for it with a cash advance rather than just pay the item directly through your card. Not only that but the credit card company can assess an additional fee of anywhere between two percent and four percent of the amount you are obtaining as a Transaction fee for cash advances.
Another drawback of cash advances is that there is no grace period until interest starts to accrue it. Interest on your cash withdrawal starts earning from the minute it is withdrawn.
Yet another issue is the way that most credit card companies will not apply your monthly payment towards a high interest cash advance until the entire amount of any outstanding balances that you have made using your credit card is paid off.