"Cash advances, in many cases, indicate desperation," says Ulzheimer. "Either you've lost your job or are underemployed. Nobody takes out cash advances against a credit card because they want money sitting in a bank somewhere."
Because the interest rate is generally higher than for the credit card charges, "you're generally borrowing from Peter to pay Paul," he says.
How it hurts: First, the cash advance is immediately added to your debt balance, which lowers your available credit and can lower your credit score, says Ulzheimer. And all potential lenders will see your score.
Second, larger card issuers regularly re-evaluate their customer's behavior. To do that they often pull the credit report, the FICO score and the customer's account history and put those three ingredients through their own scoring systems, says Ulzheimer. Many of the scoring models penalize for cash advances, which are often seen as risky, he says. Since your account history is available only to that issuer, only your behavior score with that card is likely to be affected, he says.
However, if the issuer slices your credit line or cancels your account, that could impact your credit score. And that could affect your relationship with other lenders.