A cash advance is an option for credit card users to borrow actual currency against their current balances. As a rule, the amount of cash available for a cash advance is a small percentage of the overall credit limit of most cardholders. There exist two sets of numbers provided by bank statements: the credit limit and the cash advance limit.

In the world of credit and debit cards there are still some merchants which require immediate cash payments. During cash emergency, such as paying the deductible on emergency dental work visiting the veterinarian, a relatively small amount of money is required; so taking out a personal loan can be expensive. Debit cards are also not the best solution since they can only supply what currently exists in a savings or current account. Therefore, taking out a cash advance against the balance of a credit card is considered to be better option.

Since any amount of money received through a cash advance as well as interest payments and other finance charges will be added to the balance owed to the bank, a cash advance option can prove to be expensive. Interest rate on some unsecured credit cards can reach 23% at times, which can quickly swallow up the benefits of a cash advance. That is why it's always best to delve other payment methods before getting into debt. It is always better to borrow enough cash to resolve your financial obligation and try to repay quickly.

How to receive a cash advance

Since many electronic banking machines give credit card users the opportunity to receive a cash advance, the process of receiving money is simplified by your using a credit card at the nearest cash dispenses. Real currency will be dispensed provided the requested amount does not exceed the current cash advance limit. In case the amount of the cash advance exceeds the current limit, the money may still be dispensed but the ATM may also electronically flag the exchange. An illegal cash advance might be dealt with in the same manner as a purchase over the credit limit.