Advances is a service provided by most credit cards and billboard issuers. This service allows the cardholder to withdraw cash either through ATM or over the counter at a bank or other financial institution, to some extent. For credit cards, this will be the credit line (or a few percent of it).
Cash advances are often charged 3 to 5 percent of the amount borrowed. When made on a credit card, the interest is often higher than other credit card transactions. Compound interest every day starting from cash on borrowed days.
Some "purchases" made with credit cards from items deemed to be cash are also considered cash advance in accordance with credit card network guidelines, giving rise to higher interest rates and a lack of grace period. These often include order money, lottery tickets, game chips, and certain taxes and fees paid to a particular government. However, if the merchant does not disclose the true nature of the transaction, it will be processed as a regular credit card transaction. Many merchants have provided credit card processing fees to credit cardholders regardless of credit card network guidelines, stating that credit card holders should have no additional charge to conduct transactions with a credit card.
Under the card scheme rules, the credit card holder indicating the accepted form of identification must issue a down payment on the table at any bank issuing such type of credit card, even if the cardholder can not provide the PIN.
Source of the article : Wikipedia
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