November 28, 2023

What does the 'Available Cash Limit' mean in a Credit Card?

Discover what the 'Available Cash Limit' on your credit card means and how to use it to your advantage in emergencies, travel, and more. Learn how to manage it wisely while avoiding unexpected fees.


Have you ever been at the checkout counter, ready to purchase with your credit card, and suddenly found yourself wondering, "What's my available cash limit?" As credit cardholders, we're often familiar with terms like credit limit, minimum payment, and interest rates, but 'available cash limit' might leave you scratching your head. 

So, what exactly does the 'Available Cash Limit' mean in a credit card, and how does it affect your financial transactions? Let's unravel this mystery and gain a deeper understanding of this crucial aspect of credit card management.

Read more: The best day to pay your credit cards

Available Cash Limit Explained

The 'Available Cash Limit' on your credit card refers to the portion of your credit limit that can be used for cash advances or withdrawals. Essentially, it's the amount of money you can take out as cash from your credit card. This is separate from the credit limit, the total amount of credit extended to you for making purchases or payments.

The 'Available Cash Limit' allows you to withdraw cash from ATMs or obtain cash advances from your credit card, and this can be particularly handy in emergencies where you might not have immediate access to your bank account funds.[1]

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Understanding How the Available Cash Limit Works

Now that we've defined the 'Available Cash Limit', let's delve into how it works. Imagine you have a credit card with a credit limit of $5,000 and an 'Available Cash Limit' of $1,000. This means you can spend up to $5,000 on purchases and withdraw up to $1,000 in cash from your credit card.

Here's where it gets interesting. The 'Available Cash Limit' is not a freebie; it comes with rules and costs. When you withdraw cash from your credit card, you'll typically incur a cash advance fee, usually a percentage of the amount withdrawn. In addition to this fee, interest starts accruing on the cash advance from the moment you withdraw.

For example, if you withdraw $500 in cash from your credit card, you might incur a cash advance fee of, say, 3% (which would be $15) and immediately start accumulating interest at a rate of, let's say, 25%. Over time, this can significantly add to the cost of the cash advance. [2]

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Practical Scenarios

Let's consider a couple of practical scenarios to understand how the 'Available Cash Limit' can come into play:

Emergency Medical Expenses

You're on a road trip, and suddenly, you must visit the nearest urgent care clinic. They don't accept credit cards, and you're short on cash. Your 'Available Cash Limit' can be a savior in this situation. You can withdraw cash from your credit card to cover the medical expenses and get the necessary treatment. [3]

Paying Rent When Your Bank Account is Low

It's the end of the month, and your bank account is running low, but your rent is due. If your landlord only accepts cash or checks, you can use your 'Available Cash Limit' to get the cash needed to pay your rent on time. [3]

Quick Access to Funds While Traveling

You're traveling in a foreign country and misplace your wallet with your cash and debit card. Your credit card with an 'Available Cash Limit' can be a financial lifeline. You can withdraw cash from an ATM to cover essential expenses until you sort out your lost wallet situation.[3]

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Managing Your Available Cash Limit Wisely

While the 'Available Cash Limit' can be a valuable resource, it's crucial to use it wisely and judiciously. Here are some tips to help you manage it effectively:

  • Reserve it for Emergencies: Your 'Available Cash Limit' should be a financial safety net for genuine emergencies
  • Understand the Costs: Before making a cash advance, familiarize yourself with the associated fees and interest rates. This knowledge will help you make informed decisions and budget accordingly
  • Repay Promptly: To minimize interest costs, make it a priority to repay the cash advance as soon as possible
  • Monitor Your Credit Card Statements: Keep a close eye on your credit card statements to track your cash advance transactions and ensure you know all related charges
  • Contact Customer Support: If you have questions or concerns about your 'Available Cash Limit' or how to use it, don't hesitate to contact your credit card issuer's customer support [4]

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Using Your Available Cash Limit to Your Advantage

While the 'Available Cash Limit' primarily serves as a source of quick cash, it can be leveraged intelligently in certain situations. Here's how you can use it to your advantage:

  • Dealing with Unforeseen Emergencies: Life is full of surprises. Whether it's a medical emergency, a car breakdown, or a sudden repair needed for your home, having access to your 'Available Cash Limit' can provide a sense of security 
  • Traveling Safely: When traveling, it's essential to have multiple payment options. While it's wise to carry some local currency and use a travel-friendly credit card, accessing your 'Available Cash Limit' can be a safety net
  • Covering Temporary Cash Flow Gaps: There may be instances when you face a temporary cash-flow gap between your paychecks. Your 'Available Cash Limit' can help bridge that gap, ensuring you can meet your financial obligations on time
  • Taking Advantage of Discounts: Some retailers or service providers offer discounts for cash payments. You can save money on certain expenses by using your 'Available Cash Limit' when these discounts are available
  • Building Credit History: Responsible use of your 'Available Cash Limit' can positively impact your credit history. Timely repayments of cash advances can boost your credit score, provided you manage your finances prudently [5]

Read more: What happens when you default on a credit card?


The 'Available Cash Limit' on your credit card is like a secret financial weapon, ready to be deployed in times of need. It offers a lifeline for emergencies when you're in a cash crunch, allowing you to access funds quickly and conveniently. When used wisely, your 'Available Cash Limit' can be valuable, but reckless or uninformed use can lead to unexpected fees and interest charges.

So, the next time you ponder the mysterious 'Available Cash Limit' on your credit card, remember that it's there to help you when you need it most, but it's not without its financial implications. Use it judiciously, and it can be a helpful tool in your financial arsenal, providing peace of mind and a valuable safety net for unexpected financial challenges.

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1. What is the difference between a credit limit and an available cash limit?

Your credit limit represents the maximum amount you can spend on your credit card for purchases. The available cash limit is a subset of your credit limit that you can use for cash advances, essentially turning your credit card into a source of quick cash.

2. Are there any fees associated with using the available cash limit?

Yes, there are fees associated with cash advances. You'll typically incur a cash advance fee, which is usually a percentage of the amount you withdraw. In addition to this, interest starts accruing immediately on the cash advance, often at a higher rate than regular purchases.

3. Can I increase my available cash limit?

Your credit card issuer usually determines the available cash limit based on your credit history and income. If you need a higher cash limit, you can contact your card issuer to request an increase, but it's not guaranteed.

4. Can I repay the cash advance separately from my credit card balance?

Yes, you can typically make payments specifically toward your cash advance balance. It's a good practice to pay off your cash advances as soon as possible to minimize interest costs and avoid mixing them with regular credit card balances.

5. Is there a limit to how much cash I can withdraw using my available cash limit?

Yes, your available cash limit sets the maximum amount you can withdraw as cash. Your credit card issuer determines this limit, which can vary depending on your creditworthiness and card terms. Knowing your specific available cash limit is important to avoid exceeding it.

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