What you need to know about cash advance interest rates | finder.com
Cash advance interest rates

What you need to know about cash advance interest rates

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A credit card cash advance gives you quick access to money but it often comes at a high cost.

While credit cards are mainly designed to pay for purchases, you can also use them to get cash or a cash equivalent. Known as a cash advance, these transactions generally attract higher rates and fees when compared to regular purchases. So it’s important to consider whether the convenience of using a credit card for cash advances is worth it.

Use this guide to learn what transactions are defined as cash advances, the reasons credit card providers usually charge a higher interest rate and the fees and charges you may pay when you make a cash advance. We also look at your alternatives to making cash advances and answer frequently asked questions so you can use your credit card in a way that works for you.

Compare cash advance credit cards

Name Product Cash Advance Rate Cash Advance Fee Annual Fee
26.74% variable
$10 or 4% of the cash advance amount, whichever is greater
$0
Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees
26.74% variable
$10 or 4% of the cash advance amount, whichever is greater
$0
An 18-month 0% Intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
26.99% variable
$10 or 5% of the cash advance amount, whichever is greater
$495
Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
26.99% variable
$10 or 5% of the cash advance amount, whichever is greater
$195
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
26.99% variable
$10 or 5% of the cash advance amount, whichever is greater
$995
Earn points every time you spend. Luxury Card enhances your purchasing power by providing you with one (1) point for every one dollar ($1) you spend. Every purchase gets you closer to the rewards you want.
None
$39
Designed to help build credit history with no deposit required and access to benefits.
29.9% variable
$5 or 5% of the cash advance amount, whichever is greater
$75 annual fee for the first year ($99 thereafter)
With this card you get a 23.9% Variable APR.
29.99% variable
$5 or 5% of the cash advance amount, whichever is greater
25.74% variable
$10 or 3% of the cash advance amount, whichever is greater
Up to
Get 1% cash back rewards on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV, terms apply.
26.99% variable
$5 or 3% of the cash advance amount, whichever is greater
$0
Earn 10,000 Membership Rewards® Points after you use your new Card to make $1,000 in purchases in your first 3 months.
17.99% to 26.99% variable
$10 or 5% of the cash advance amount, whichever is greater
$0
Earn more cash back for the things you buy most.
26.99% variable
$5 or 3% of the cash advance amount, whichever is greater
$0
Snag a $150 bonus statement credit after you spend $1,000 in the first 3 months
26.74% variable
$10 or 5% of the cash advance amount, whichever is greater
$0 annual fee for the first year ($95 thereafter)
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
26.74% variable
$10 or 5% of the cash advance amount, whichever is greater
$450
Earn 50,000 BONUS POINTS after spending $4,000 on purchases in the first 3 months from account opening* — that's $750 toward travel when you redeem through Chase Ultimate Rewards®.
26.99% variable
$5 or 3% of the cash advance amount, whichever is greater
$95
15,000 Membership Rewards points after you spend $1,000 in the first 3 months of opening your account
26.74% variable
$10 or 5% of the cash advance amount, whichever is greater
$0
Earn unlimited 1.5% cash back on every purchase - it's automatic. No minimum to redeem for cash back.
20.74% to 26.74% variable
$10 or 3% of the cash advance amount, whichever is greater
$95
Earn unlimited 2 points for every $1 spent on travel and dining purchases and 1.5 points for every $1 spent on all other purchases.
24.74% variable
$10 or 3% of the cash advance amount, whichever is greater
$0
Earn unlimited 1.5% cash back on every purchase, every day
26.74% variable
$10 or 5% of the cash advance amount, whichever is greater
$0
Earn 5% Cash back in bonus categories up to $1,500 every quarter. Earn 1% Cash back on all other purchases.
19.74% to 26.74% variable
$10 or 5% of the cash advance amount, whichever is greater
$0
An intro offer rewards cardholders with a $250 value (25,000 online bonus points) after spending $1,000 within the first 90 days of account opening
26.74% variable
$10 or 5% of the cash advance amount, whichever is greater
$0
Jumpstart your financial fitness! 60 day introductory balance transfer offer, save on interest, and get your free monthly credit score.
24.74% variable
$10 or 3% of the cash advance amount, whichever is greater
$0 annual fee for the first year ($95 thereafter)

Compare up to 4 providers

What is a cash advance?

A cash advance is a type of transaction that allows you to access funds in the form of cash or a “cash equivalent”. For example, using your credit card to withdraw money from an ATM, pay for gift cards or buy foreign currency are all commonly defined as cash advance transactions.

Cash advances typically have higher interest rates than standard credit card purchases, with most APRs ranging from 19% to 22%. They also attract a fee worth 2-3% of the transaction and are not eligible for features such as interest-free days or reward points. There are also some credit cards that charge the same interest rate for purchases and cash advances, although the cash advance fee still applies.

What transactions are classified as a cash advance?

Using your credit card to withdraw money from an ATM, bank branch or at the checkout clearly qualifies as a cash advance. Other transactions considered as “cash advances” may vary depending on your issuer, but could include:

  • Buying foreign currency or traveller’s cheques
  • Gift card or prepaid debit card purchases and top-ups
  • Using a non-BPAY registered billing service to pay bills
  • Utility and government charges
  • Transactions at physical or online casinos (which can include money spent on food and beverages)
  • Other gambling transactions, such as buying lottery tickets or scratchies
  • Transferring funds from your credit card account to any other bank account

For a full list of what your credit card issuer considers a cash advance and the charges that will you’ll incur, please see your card’s Product Disclosure Statement.

Cash-card-895x278

Why do banks charge higher interest rates for cash advances?

Cash advances are similar to short-term loans in that they provide you with funds on short notice. The cash you get can then be used for anything you want, including transactions you wouldn’t normally be able to use a credit card for (such as paying other debts). As such, these transactions are considered as being a greater risk than standard credit card purchases.

A higher standard interest rate can help lenders offset this risk by providing them with more potential profits when you use your card for a cash advance. The rates and fees applied can also help deter you from regularly using a credit card for cash advance transactions, which also reduces the potential risk for lenders.

Balance transfers and cash advances

If you’re comparing balance transfer credit cards, check the rate of interest that applies after the introductory period. Often the low or 0% interest rate will revert to the cash advance rate for any outstanding balance at the end of the introductory period. In extreme cases, this could mean you go from paying 0% interest on a debt during the promotional period, to paying 22% p.a. for it once the rates revert.

What fees and charges apply when using a credit card for a cash advance?

Using your credit card for a cash advance should be a last resort, and if you do end up taking this path, remember the following.

  • atm cash withdrawalCash advance fee. Cash advance fees are usually charged as a percentage of the total cash advance amount. For example, if you withdrew $1,000 on a credit card with a cash advance fee of 3%, you would pay a fee of $30. This fee will add to the balance on your card and increase your interest charges.
  • Interest charges. Interest applies from the day you make the cash advance transaction and quickly adds up. For example, if your credit card had a cash advance rate of 21.99% p.a. and you made a cash advance transaction worth $1,030 (with a 3% cash advance fee), you would be charged $18.64 for the first month you carried this debt. If you only paid the minimum off it each month, it would take you around 9 years to pay it off and cost a total of $1,274 in interest.
  • ATM fees. Some providers and third-party companies will charge an additional fee when you withdraw money from an ATM outside your provider’s network. These charges will add to the overall cost of your cash advance. You may be able to avoid these fees by using an ATM that’s part of your provider’s network. For example, if you have a Westpac credit card and get cash out at a Westpac ATM.
  • Cash advances overseas. If you use a credit card for a cash advance overseas, you could attract other charges, including ATM fees and currency conversion fees. These will be added to the total cost of the cash advance, leading to even higher interest charges.

Cash advances and credit card repayments

Following the credit card reforms in 2012, banks now have to allocate your repayments to the debt that is accruing the highest interest first. So if you’ve used your card for both purchases (which might accrue interest at 14%) and cash advances (which collect 22% interest), your repayments will go directly to your cash advances. If you’re trying to repay your purchases without collecting interest, it’s important to remember this and where your repayments are actually going.

What are the alternatives to cash advances?

If you want to avoid the extra fees and high-interest rates that come with using your credit card for a cash advance, you can consider the following alternatives:

  • Debit cards. Using your debit card to withdraw money from your bank account won’t attract cash advance fees. In fact, it’s likely to be fee-free if you stick to your own bank’s ATM network.
  • Direct bank transfers. If you need to make a payment straight away, you could consider a direct transfer from your bank account. This allows you to pay anyone using your own money instead of funds from your credit card, which means you won’t be charged interest or a cash advance fee.
  • Loans. If you need extra funds, you may also want to consider getting a short-term loan or a personal loan to cover the costs. These options could have lower interest rates than credit card cash advances. Plus, some short-term loan issuers can give you access to approved funds on the same day or by the next business day.

Cash advances can be convenient when you need money in a hurry and have no other option, but the rates and fees they attract mean that cash advances should only be considered as a last resort. If you still think you may use your credit card for a cash advance, you may want to compare credit cards with low cash advance rates to see if there is an option that will work for you.

Frequently asked questions about credit card cash advances

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    Adrienne Fuller

    Adrienne Fuller leads the publishing team at finder.com. She has one goal: to deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. When she's not helping folks save money, she's hiking with her two Catahoulas around her home in San Diego.

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