ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Credit card cash advances typically carry an interest rate that is higher than the rate for regular purchases. What’s more, the interest begins to accrue immediately; there is no grace period.

Detailed explanation-2: -The amount of money you transfer or withdraw as a cash advance will appear on your credit card statement and interest will begin accruing right away. Cash advances typically come with a higher APR than regular purchases and you may also incur a cash advance fee.

Detailed explanation-3: -Paying a bill using a credit card or line of credit is treated the same as getting a cash advance. You’ll be charged interest from the time you make the payment, just like you would for a cash advance.

Detailed explanation-4: -Cash advances typically attract interest from the date of the transaction until you pay off the cash advance balance in full. This is different to purchases made using your credit card, where you will usually receive an interest-free period (e.g. up to 55 interest-free days).

Detailed explanation-5: -Credit card cash advances come with high fees and high interest rates. Usually, you should try to avoid a cash advance. There may be some circumstances where taking one out isn’t the worst idea, such as if you’re using it as an alternative to a costly payday loan for an emergency expense.