Why is a cash advance more costly on a credit card than a regular purchase ?

You are still essentially "borrowing" the credit card company's money either way, so why is the percentage rate more for cash?|||People that do a cash advance are simply considered more risky

"risky behavior"

You also pay a flat fee for a cash advance such as $10

And, the limit is lower on cash advances

Also no grace period, you start paying interest on it, and all your purchases, immediately



Usually people that are financially stable just take cash out of their checking account

In conclusion: Just stay away from cash advances for life|||as others have said it is riskier behaviour - true but that is only a small part





the biggest reason is the interchange fees





http://en.wikipedia.org/wiki/Interchange鈥?/a>





if you buy a $100 item with a visa the store only gets $98 - stores must in crease their list prices to account for this - and this is why some shops will offer cash discounts- they can make more charging you less if you pay cash/debit vs credit|||banks are in business to make money and show a profit. this is one of the ways they accomplish that. additionally, the transaction says"poor planner" all over it, so there's additional financial risk on the part of the bank.|||Because they can. Also, when you use a CC to make a purchase, the bank can go to the merchant to get their money back if the card was stolen, fraudulently used or the charge is contested. Can't to that with a cash advance. No recourse against any merchant.|||I believe its just a hook to get you to pay them more money on what your borrowing.