A cash advance is a term used to describe a feature or service that are inherently included in credit cards. This is the option of cardholders to borrow actually money against their current credit card balance. Usually, the amount of money that can be taken for a cash advance is a percentage of the total credit limit of the credit card. When the credit card statement is issued, the bank or credit card company will usually provide separate figures for the credit limit and the cash advance limit.
Getting a cash advance is relatively easy. A credit card owner usually just need to go to an ATM to withdraw money. Most automated teller machines are configured to give credit card users the ability to withdraw cash using their credit card, much like an ATM card. As long as the credit card user withdraws money within the stated cash advance limit, the ATM will dispense the money. The ATM will electronically relay that the credit card user has made a cash advance and this will be reflected in the next credit card statement.
Cash advances are still an important service. Even though debit and credit cards have become very popular, there are still establishments and services where one has no choice but to pay in cash. Getting a cash advance against the balance of the credit card is a better alternative to getting a small loan to pay for a product or service that requires a cash payment.
It should be noted though that a cash advance can be expensive because of the cash advance will immediately incur an interest and other finance charges. This can prove to be a burden especially if the credit card user is not able to pay back the cash advance in full.