Cash advance is:
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A. B. C. D.D
A cash advance is a financial service offered by many credit card issuers, allowing the cardholder to withdraw cash from an ATM or bank teller. It is a short-term loan, typically with a high interest rate, that is repaid when the cardholder pays their credit card bill.
The correct answer to the question is D, "A and B both." A cash advance is both a loan and a debt that can be obtained by a bank credit cardholder at any participating bank or financial institution.
A cash advance is considered a loan because the credit card company is advancing the cardholder money, which the cardholder will need to pay back with interest. The cardholder may be charged a fee for taking out a cash advance, and interest charges will start accruing immediately, unlike with regular credit card purchases where interest may not accrue until the end of the billing cycle.
A cash advance is also considered a debt because the cardholder is borrowing money that must be repaid. If the cardholder does not pay off the cash advance balance by the due date, interest will continue to accrue, and the cardholder will owe more money. This debt can also impact the cardholder's credit score, as it is considered part of their overall credit utilization.
It is important for credit cardholders to carefully consider whether a cash advance is the right choice for their financial situation. Due to the high fees and interest rates associated with cash advances, it is generally recommended that cardholders only use them in emergencies and pay them off as soon as possible.