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I had a card with a balance I'd been paying down over a long time. Last month I got a little extra cash, and made a lump-sum payment for the entire balance.

This week I got a letter telling me my cash advance limit was being reduced to 20% of my credit limit.

The letter didn't say that it was being reduced because I'd paid down the card, so I don't know for sure the two things are related.

Anyway, why does the bank have different limits for different types of charges? I mean, if my limit is $5K, and I charge $5K worth of "stuff," I'm still on the hook for that amount. From the bank's perspective, that amount is at risk.

Are CC users are more likely to default on cash advances than purchases?
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