Credit card cashing, also known as credit card cash 신용카드현금화 , is a financial transaction that allows credit card holders to withdraw cash against their credit limit. Unlike regular credit card purchases, where you pay for goods and services, a cash advance provides direct cash in hand, often through an ATM, a bank branch, or by transferring funds from the credit card account to a bank account. While this can offer immediate access to funds in emergencies, it also carries significant risks and costs that users should understand fully.

How Credit card Cashing Works
In a typical credit card cash advance, you withdraw funds using your credit card as you would with a debit card. The cash you receive is treated as an advance against your available credit limit. However, credit card issuers treat cash advances differently from regular purchases, and these differences are important.

The main distinction is that cash advances come with much higher fees and interest rates than regular transactions. First, there’s often a fee for taking out the cash advance, which may be a percentage of the amount withdrawn or a flat rate, whichever is higher. Additionally, interest on a cash advance generally starts accruing immediately, with no grace period, meaning you’ll start owing interest from the day you withdraw the cash.

Fees and Interest rates for Cash advances
Credit card cash advances typically involve two main types of costs: transaction fees and interest rates.

Transaction Fees: These fees can range from 3% to 5% of the amount withdrawn, depending on the credit card issuer. For example, a $500 cash advance with a 5% fee would incur an immediate cost of $25.

Interest rates: The interest rate on a cash advance is often significantly higher than the rate for regular credit card purchases, sometimes reaching up to 25% or more, depending on the card issuer. Unlike regular transactions, where there might be an interest-free grace period if you pay the balance in full each month, interest on a cash advance starts accruing immediately.

ATM Fees: If you withdraw cash from an ATM, you may also face additional fees, usually ranging from $2 to $5 per transaction, depending on the ATM operator and network.

These costs can add up quickly, making cash advances an expensive way to access cash. For example, a $500 cash advance with a 5% transaction fee and a 25% APR could cost well over $100 in fees and interest over just a few months.