Q: What makes cash advances from credit cards a very expensive loan?
A: Most credit card issuers charge a higher interest rate (20% or more) plus a one-time fee of up to 5% of the amount advanced. Also, cash advances do not qualify for an interest-free grace period which means interest accrues immediately. Additionally, some issuers do not apply your payments to the cash advance until your lower interest rate balances are paid-off.
