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Important things to know before getting a cash advance on your credit card

Everything you need to know about credit card cash advances.

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Did you know you can use your credit card for a cash advance? While taking out a cash advance is usually associated with using your credit card at an ATM to withdraw money, other transactions actually incur cash advance fees including buying gift cards, getting foreign currency and gambling.

Convenient? Yes. Expensive? It can be. There are high interest rates attached to cash advances and a cash advance fee that you’ll have to pay, which is typically around 1% of the total transaction cost. Read on for key details on cash advances, what you should consider before using your card, and alternative options.

Compare credit card cash advance rates

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Benefits with this card Description
American Express Cobalt Card
19.99%
21.99%
$120
N/A
Earn 5 Membership Rewards points per $1 spent at eligible grocery stores, restaurants, bars, cafés and food delivery services, and earn 2 Membership Rewards points per $1 spent at eligible gas stations, and on transit and travel purchases, and earn 1 Membership Rewards point per $1 spent elsewhere. Terms apply
Earn up to 45,000 bonus Membership Rewards points. In your first year as a new Cobalt Cardmember, earn 2,500 Membership Rewards points for each monthly billing period in which you spend $500 on your card (for a total of 30,000 points in a year). Plus, earn a Welcome Bonus of 15,000 Membership Rewards points when you spend a total of $3,000 in purchases on your Card in your first 3 months of Cardmembership. Apply by May 5, 2021.
BMO World Elite Mastercard
19.99%
22.99%
$0 annual fee for the first year ($150 thereafter)
$80,000
Get 3 BMO Rewards points per $1 spent on eligible travel, dining and entertainment purchases (up to $50,000 spend annually), and get 2 BMO Rewards points per $1 spent on all other eligible purchases (and once you reach the $50,000 annual spend).
Get up to $575 in value in your first year. Get a bonus of 40,000 BMO Rewards points ($285 travel value booked on bmorewards.com). Plus, get the $150 annual fee waived in the first year.
Tangerine Money-Back Credit Card
1.95% intro APR for the first 6 months, 19.95% thereafter
19.95%
$0
$12,000
Earn 2% cash back in two categories of your choice (or three categories if you open a Tangerine Savings Account and directly deposit your cash back into the account), and 0.5% cash back on everything else.
Get a 1.95% interest rate on balance transfers for the first six months (valid within the first 30 days of account opening).
SimplyCash Preferred Card from American Express
19.99%
21.99%
$99
N/A
Earn 2% cash back on all eligible purchases
Earn 10% cash back on all eligible purchases (up to $400 in cash back) for the first four months of Cardmembership.
Choice Card from American Express
19.99%
23.99%
$0
N/A
Earn 1 American Express Membership Point for every $1 you spend on purchases.
Earn a Welcome Bonus of 10,000 Membership Rewards points when you charge $1,000 in purchases to your card in the first 3 months of Cardmembership.
BMO Preferred Rate Mastercard
12.99%
12.99%
$20
$15,000
Take advantage of an introductory balance transfer offer, annual fee waiver in the first year, and low purchase and cash advance interest rates.
Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.
BMO eclipse Visa Infinite
20.99%
23.99%
$0 annual fee for the first year ($120 thereafter)
$60,000
Earn 5x the BMO Points for every $1 spent on groceries, dining in and out, gas and transit.
Get up to 40,000 points and the $120 annual fee waived in the first year. Earn 25,000 points after you spend $3,000 in the first 3 months and get 15,000 points on your first anniversary.
American Express Aeroplan Reserve Card
19.99%
21.99%
$599
N/A
Earn 3x the points on eligible purchases made directly with Air Canada and Air Canada Vacations, 2x the points on eligible dining and food delivery purchases in Canada, and 1x the points on everything else.
Earn up to 65,000 Welcome Bonus Aeroplan points and a $100 Statement Credit as a new cardmember.
American Express AIR MILES Platinum Credit Card
20.99%
21.99%
$120
N/A
Earn 1 AIR MILE for every $5 spent on eligible food, drink, gas and transit purchases (up to an annual spend of $30,000), and earn 1 AIR MILE for every $10 spent on all other eligible purchases (and after the $30,000 annual spend)
Earn a Welcome Bonus of 3,000 AIR MILES when you spend at least $1,500 in eligible purchases within the first three months.
American Express Business Edge Card
19.99%
21.99%
$99
N/A
Earn 3 Membership Rewards points for every $1 spent on eligible business essentials including office supplies, electronics, rides, gas, eats and drinks (up to an annual earn of 75,000 Membership Rewards), and earn 1 Membership Reward point for every $1 spent on all other eligible purchases
Earn up to 42,000 Membership Rewards points in your first year. Earn a Welcome Bonus of 30,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases
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What type of transactions are considered cash advances?

Depending on your credit card, a cash advance could include any or all of the following types of transactions:

  • ATM withdrawals. Getting cash from an ATM using your credit card.
  • Gambling transactions. Whether it’s online or at the casino, gambling purchases can be considered as cash advances. Occasionally, purchasing food and drinks at the casino will also be charged as a cash advance.
  • Foreign currency and traveller’s cheques. Since they’re a form of cash, purchasing them with your credit card is considered a cash advance.
  • Paying for gift cards or prepaid cards. Buying a gift card or a prepaid card is usually classified as a cash advance. This could also apply when reloading prepaid credit, debit or store cards using your credit card.
  • Online transfers. If “credit” from your card is being converted into cash that is going into your bank account, it’s a cash advance.
  • Utilities. Using your credit card to pay utility bills could be considered as a cash advance.
  • Government charges. If you pay a government fee with a credit card, it could be processed as a cash advance.

What credit card transactions are considered cash advances?

What to consider before using your credit card for a cash advance

Unless it’s absolutely necessary to use your credit card for a cash advance, it’s best to avoid it. Here are the drawbacks:

  • Higher rate of interest. Cash advance interest rates are always higher than purchase interest rates.
  • Cash advance fees. The cash advance fee is usually 1% of the total transaction cost, or $3.50 to a maximum of $10.
  • No interest-free days. There’s no grace period with a cash advance –your transaction will accrue interest from the day it’s made.
  • No points. Cash advance transactions are ineligible to earn rewards or travel rewards points.
  • ATM fees. If withdrawing from an ATM outside of your banks network, an ATM fee will be charged.
  • Foreign currency transaction fees. You could be charged for currency conversion if you use your credit card to get cash out at an overseas ATM, adding to the overall cost of the cash advance.

On the plus side:

  • Credit card payment allocation. Credit card repayments are made to the debt that has the highest rate of interest first, which is usually a cash advance transaction.
  • Having cash in hand. If you don’t have access to cash any other way, this could be a viable solution.

How much could a cash advance transaction cost?

Let’s say you’re at a festival and want to use your credit card to get cash out. Your card applies the following fees and charges:

  • ATM withdrawal fee: $3
  • Cash advance fee: The greater of $10 or 1% of the total transaction cost.
  • Cash advance interest rate: 21.99% APR

If you withdrew $500 on the first day of the festival, your initial costs would be:

  • ATM withdrawal fee: $3
  • Cash advance fee: $10
  • Total: $513

This would start accruing interest at the rate of 21.99% APR from the day you made the withdrawal.

If I don’t want to use a credit card for a cash advance, how else can I get money fast?

  • Payday loans. Consider a payday loan, also known as a short-term cash loan. While most lenders have a fast turnaround time, you’ll be subject to high interest rates.
  • Personal loan. A personal loan is usually more affordable than a credit card cash advance or payday loan. Getting approved can take no longer than a few minutes, but it usually takes a few days to receive the funds. If you can wait and are approved for a personal loan, funds will be deposited directly into your bank account and you’ll skip the cash advance fees.
  • Debit card. The most affordable option is to use a debit card, as they can offer fee-free withdrawals when you use the bank’s associated ATM network.
  • Low cash advance rate credit cards. There are some credit cards out there that charge a lower interest rate on cash advances. Keep in mind you’ll still face a cash advance fee on top of the low interest rate.
on the road and overseas edition: Did you know?

If you’re travelling, you could also consider a prepaid travel money card to avoid foreign currency conversion fees and other ATM charges.

Bottom line

With high interest rates and fees, credit card cash advances are almost always an expensive option. If you really need to use a credit card for cash withdrawals or other cash advance transactions, consider applying for a low cash advance rate credit card or consider other options so that you can keep your costs to a minimum.

If you know you will need some extra cash in the future, plan ahead and apply for an affordable personal loan. While it can take a little longer to apply for than other types of credit, the interest rates are generally lower than those of both credit cards and payday loans.

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Frequently asked questions about cash advance transactions

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