What Is a Cash Advance Limit?

Need quick cash but not sure how much you can borrow? Many people seek out payday loans for unexpected expenses. Knowing your cash advance limit is crucial.

A cash advance limit is the maximum amount you can borrow against your line of credit or loan. It varies by lender and depends on several factors, including your credit score and the type of loan. Understanding this limit helps you avoid surprises and manage your finances better.

This article will explore what a cash advance limit is and how it works. You’ll learn about the limits set by lenders. You'll also learn how fees and interest rates impact your loan.

Comparing Cash Advance Limits by Lender

Different lenders set varying cash advance limits for their customers. Below, we compare the cash advanced limits from several popular credit card companies.

American Express

Credit Card Cash Advance Limit: Up to $10,000

American Express is a financial institution that offers various credit cards. Each has a different cash advance limit. For instance, the American Express Centurion card has a maximum limit of $10,000. Other cards, such as the Platinum Card and Gold Card, have limits of $8,000 and $6,000, respectively. The Green Card offers a limit of $3,000. These limits are subject to the overall credit limit and other conditions set by Amex. Also, American Express requires a PIN for ATM withdrawals. ATM fees apply for each cash advance.

Bank of America

Cash Advance Limit: 30% of Credit Limit

Bank of America sets its cash advance limit at 30% of the total credit limit. For example, if your credit limit is $10,000, your cash advance limit would be $3,000.

The Bank of America Customized Cash Rewards credit card can have a credit limit up to $95,000. This high limit would allow for a large cash advance. But, typical limits are much lower. Remember, fees and interest rates apply from the day of the transaction. So plan repayment accordingly. Also, Bank of America charges a 3% to 5% fee for cash advances.

Capital One

Cash Advance Limit: 30% to 50% of Credit Limit

Capital One sets cash advance limits based on a percentage of your total credit. The percentage ranges from 30% to 50%. This depends on your creditworthiness. For example, a Capital One card with a $10,000 credit limit varies by individual card and credit assessment. Also, Capital One may impose daily withdrawal limits. So, check your card’s terms before taking a cash advance. Fees are typically $10 or 3% of the amount, whichever is higher. Interest starts immediately.

Chase

Cash Advance Limit: 5% of Credit Limit

Chase cards generally have lower cash advance limits, set at 5% of the total credit limit. For example, say you have a Chase Sapphire Preferred Card with a $10,000 credit limit. Your cash advance limit would be $500. This lower percentage helps manage the risk associated with cash advances. Chase also charges a higher interest rate on cash advances. The loan starts accruing interest immediately. In addition, Chase imposes a fee of either $10 or 5% of the amount of each transaction, whichever is greater.

Citi

Cash Advance Limit: 50% of Credit Limit

Citi allows cash advances of up to 50% of your total credit limit. For example, a Citi card with a $10,000 credit limit would have a cash advance limit of $5,000. This high percentage makes Citi cards more flexible. It helps cardholders who need larger cash advances. However, like other providers, Citi charges fees and higher APRs. So, it's wise to use these options sparingly and repay quickly. Citi’s cash advance fee is usually 5% of the transaction amount or $10, whichever is greater. Interest starts on the transaction date.

How Limits and Fees Affect Total Borrowed Values

Fees and interest rates greatly affect the total cost of a cash advance. Understanding these financial implications helps you make better choices.

Fees and APR (Annual Percentage Rate)

Cash Advance Fees

Every cash advance comes with fees. Typically, this is a percentage of the cash advance amount you borrow or a flat fee. For example, a 5% fee on a $500 advance means you pay an extra $25. Some lenders also charge a minimum fee. It might be higher than the percentage fee for small advances.

APR

The APR for cash advances is higher than for regular credit card purchases. Interest charges start accruing immediately. There's no grace period. This means you begin paying interest on the day you take their advance.

Financial Implications

Short-Term Impact

The fees and interest charges are immediate. They increase your borrowing costs in the short term. For instance, a $500 cash advance with a 5% fee and a 25% APR can quickly add up. You start with $25 in fees. If you don't repay the advance quickly, interest charges grow daily.

Long-Term Impact

Over time, high APRs extend the lifecycle of your debt. The longer it takes to repay, the more interest you accumulate. For example, if you only make minimum payments, most go towards interest, not the principal.

Choosing the Right Option

When considering a short-term loan, factor in both additional fees and the APR. Calculate the total cost, including how long you expect to take to repay. If possible, look for lower APR options or plan to repay the advance quickly to minimize interest. Your credit card issuer might offer convenience checks that are connected to your credit card account.

High transaction fees and interest rates can strain your budget. They reduce your available credits and increase your monthly payment. This affects your personal finances. It changes your credit utilization ratio, which affects your credit score.

Understanding Cash Advances and More

In this article, you've learned what a cash advance limit is and why it matters. We've compared cash advance limits across different lenders, highlighting how these limits vary. You've also learned how fees and APRs impact the total amount of cash you borrow. This shows the importance of understanding how credit card cash advances work.

When considering a cash advance, factoring in all associated fees and interest rates is crucial. This helps you choose well to fit your financial needs and budget.

If you need quick cash and are considering a payday loan, ensure to choose a reliable provider. At My Canada Payday, we offer fast and flexible payday loan services, with no credit checks. Even if you have a bad credit score. Visit My Canada Payday to apply now!