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Why is a credit card cash advance a worse way to borrow than the card itself?

Because a cash advance strips away every protection a normal purchase has. First, there's an upfront fee, usually 3% to 5% of the amount. Second, the cash advance APR is typically higher than your purchase APR. Third, and most damaging, there is no grace period: interest starts accruing the instant you take the cash, even if you'd normally pay your statement in full.

So a $500 cash advance can start racking up daily interest immediately, on top of the fee, at a rate that may exceed 25%. Cash advances also often count toward a separate, lower limit. Because payments may be applied to lower-rate balances first, the advance can linger and accrue interest for a while. Treat cash advances as an emergency-only option, and repay them faster than any other balance.

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