When you’re short on funds, using your credit card to access cash might seem like a quick solution. However, many people confuse credit card 신용카드현금화 cashing with cash advances—two similar yet significantly different methods of getting cash from your credit card. Understanding the distinction between them is crucial, especially if you want to avoid legal issues, excessive fees, or damage to your credit score.
What Is a Cash Advance?
A cash advance is a service officially provided by your credit card issuer. It allows you to withdraw money from an ATM, request funds at a bank branch, or transfer cash into your bank account via your credit card.
Key Features of Cash Advances:
Legally sanctioned by your card issuer
Interest starts immediately—no grace period like with purchases
High interest rates—often above 20%
Additional fees—typically 2–5% of the withdrawn amount
Safe and traceable—done via authorized banking channels
Cash advances are transparent and legal but should be used with caution due to their high costs.
What Is Credit Card Cashing?
Credit card cashing, also known as credit card encashment, usually refers to the process of converting your available credit into cash using unauthorized third-party services. For example, some services swipe your credit card as if you’re making a purchase, then hand you the equivalent amount in cash—often charging a service fee.
Key Features of Credit Card Cashing:
Often unauthorized or in legal gray areas
May violate your card’s terms of service
Can involve scams or fraud
No official documentation or record of transaction purpose
Could damage your credit or result in card cancellation
While some people use credit card cashing for convenience, it’s riskier and may be considered fraudulent if misused.
Which One Should You Use?
If you absolutely need cash from your credit card, a cash advance is the safer and more responsible choice. It may be expensive, but it’s legal, traceable, and managed by your card issuer. Credit card cashing, while offering quick access to funds, exposes you to fraud, legal trouble, and financial harm if not handled properly.
Conclusion
Though both methods give you cash from your credit card, cash advances are bank-sanctioned and far safer, while credit card cashing often crosses ethical and legal boundaries. Before choosing either option, always evaluate the risks, read your card’s terms, and consider alternative financing solutions like personal loans or credit union support.
