Cash advance
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Taking cash out with a credit card. There’s usually a fee, often a higher interest rate, and no grace period: interest starts the moment you withdraw.
In FILE 004, Jordan took $300 from the card at an ATM. With a $15 fee, he owed $315 before he left the ATM, with interest from day 1 (story numbers).
Lend from your bank account, and only what you can afford to lose. Never from the card’s ATM button.
From FILE 004: the 6 first-card mistakes, or price one with the free First Card Calculator.
Sources
Official and government data first. Every quote is word for word; follow the link to check it yourself.
Consumer Financial Protection Bureau · “Can I withdraw money from my credit card at an ATM?”
“Unlike other purchases that have a grace period before they start to accrue interest, interest on a cash advance starts as soon as you withdraw your money.”
consumerfinance.gov (opens in a new tab)Financial Consumer Agency of Canada · “How credit cards work”
“For example, the interest rate for regular purchases may be 19%, but it may be 22% for cash advances.”
canada.ca (opens in a new tab)Consumer Financial Protection Bureau · “Can I withdraw money from my credit card at an ATM?”
“Unlike other purchases that have a grace period before they start to accrue interest, interest on a cash advance starts as soon as you withdraw your money.”
consumerfinance.gov (opens in a new tab)Financial Consumer Agency of Canada · “How credit cards work”
“For example, the interest rate for regular purchases may be 19%, but it may be 22% for cash advances.”
canada.ca (opens in a new tab)