Withdraw cash from your credit card without incurring huge fees. Compare low cash advance rate credit cards here.
An important feature of a credit card is that it allows you to withdraw cash from ATMs or credit card readers in the form of cash advances. These transactions are known to attract a higher interest rate and a cash advance fee, but there is a selection of credit cards that charge competitive interest rates for cash advances.
Here, we’ll explain how they work, compare low cash advance rate credit cards and share what else you need to know before choosing and using a credit card for cash advances.
Our pick for a cash advance credit card
PenFed Gold Visa® CardRead more
Compare cash advance credit cards
How do low cash advance credit cards work?
They are just like regular credit cards except they offer a competitive interest rate on cash advances — many of these cards actually charge the same interest rate for both purchases and cash advance transactions.
These transactions also won’t be eligible for any interest-free days your card may offer for standard purchases, which means interest will accrue from the time the transaction is made until it is paid off in full.
What are the benefits of low cash advance rate cards?
They provide an affordable way to use your credit card for a cash advance transaction and can particularly useful if you need extra funds but can’t use your credit card to make a payment. For example, if you’re overseas or shopping somewhere that only accepts cash.
What exactly is a cash advance?
A cash advance is when you use your credit card to access money, for example if you get cash out at a supermarket or ATM. Cash advances can also include “cash equivalent” transactions, such as using your credit card to buy gift cards, foreign currency, travelers checks or for gambling transactions.
As these transactions give you access to actual money or an equivalent, they typically attract a higher interest rate, as well as a cash advance fee of around 5% or a flat fee, whichever is greater, of the total transaction.
What is the difference between cash advances and purchases?
While a cash advance refers to using your credit card to access money, purchases refer to instances when you use your credit card to pay for products and services. Standard credit cards charge different purchase and cash advance rates, and cash advance rates are typically higher.
How to compare low cash advance credit cards
Not all low cash advance rate credit cards are the same, so when you consider applying for one, take some time to compare the following aspects:
- Interest rates. The standard variable cash advance rate may not be the same as the purchase rate, so it’s important to look at both.
- Cash advance fee. This fee is charged every time you make a cash advance transaction and is usually a fixed dollar amount or percentage. For example, “$10 or 5% of the transaction, whichever is greater”.
- Annual fee. Weigh up the features of the card and consider whether they will offset the annual fee so that you can choose a product that’s affordable for you.
- International transaction fee. Most credit cards charge a fee of usually 3% for transactions made in a foreign currency — make sure you also consider this fee and how it could impact on the overall cost of a cash advance.
- Introductory offers. A range of credit cards offer signup bonuses and introductory 0% interest rates for purchases or balance transfers. It’s important to note that these benefits usually don’t apply to cash advance transactions, so read the terms and conditions.
What else should I keep in mind?
If you end up getting a cash advance using your credit card, consider the following:
- Budget for repayments. The longer you carry a balance on your credit card, the more interest you will pay. Factoring repayments into your budget or using savings to clear the balance can help keep these costs to a minimum.
- Make a payment as soon as possible. Each day you carry a balance from a cash advance, interest is calculated daily. By making payments before your statement is due, you can reduce the overall cost of a cash advance.
- Overseas fees for cash advances. If you use your credit card to get cash out while traveling overseas, you could also have to pay ATM fees and international transaction fees.
- Rewards. If your credit card comes linked to a rewards program, any cash advances you make won’t be eligible for rewards.
How do I apply for a low cash advance credit card?
Applying for a low cash advance rate card is simple and can be completed online in around 10-15 minutes. After comparing cards and choosing one that suits your needs, just click the “Go to site” button. Make sure you meet the eligibility for the card first, it may vary but it generally includes the following criteria:
- At least 18 years old.
- A resident of the US.
- A good credit rating.
Have the following documents and details ready to speed up the process:
- Full name, personal contact information and Social Security number.
- Housing status and monthly rent or mortgage payments.
- Employment status and gross annual income.