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How does a cash advance impact my billing cycle?

Curious about credit card billing cycle

How does a cash advance impact my billing cycle?

A cash advance is a feature offered by some credit cards that allows you to withdraw cash from your credit card's available credit limit. It is important to note that cash advances typically have different terms and conditions compared to regular credit card transactions, and they can have an impact on your billing cycle in the following ways:

1. Higher interest rates: Cash advances often have a higher interest rate compared to regular credit card purchases. The interest on cash advances may start accruing immediately, without any grace period, meaning interest charges can accumulate from the day you make the cash advance.

2. Separate interest calculation: The cash advance balance may be subject to a separate interest calculation method, such as a higher daily or monthly interest rate. This can result in interest charges accumulating more quickly on cash advances compared to regular purchases.

3. No grace period: Unlike regular credit card purchases, cash advances may not have a grace period. This means that interest charges can start accruing immediately after the cash advance is made, rather than allowing for a grace period where no interest is charged if the balance is paid in full by the due date.

4. Potential fees: Cash advances may also be subject to additional fees, such as a cash advance fee or ATM withdrawal fee. These fees are typically a percentage of the cash advance amount or a flat fee, and they will be added to your overall credit card balance.

It is important to carefully consider the costs associated with cash advances and to use them sparingly, as they can be an expensive way to access funds. If you are considering a cash advance, it is advisable to review your credit card agreement or contact your credit card issuer to understand the specific terms, fees, and interest rates that apply to cash advances on your card.

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