A cash advance is a loan service provided by many credit card and charge card issuers. Also known as PayDay Loan. The service allows cardholders to withdraw cash, either through an ATM, Point of Sale (POS) agent, or over the counter at a bank or other financial agency, up to a certain limit; for a credit card, this will be the credit limit.
Examples of Cash Advance include ATM withdrawals and cash out.
Using your credit card to withdraw money from an ATM or at the checkout is a cash advance. Additional fees could also apply if you use your credit card at a non-network ATM.
Cash advances often incur a fee of 3 to 5 percent of the amount being borrowed. When made on a credit card, the interest is often higher than other credit card transactions. The interest compounds daily starting from the day cash is borrowed.