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What credit card transactions are considered cash advances?

From getting cash out to buying foreign currency or gift cards, discover all the transactions that are considered cash advances.


Most credit cards give you the ability to get cash or a “cash equivalent” using your account. Known as “cash advances”, these transactions often attract a higher interest rate than purchases, as well as additional cash advance fees. Cash advances also come with other restrictions, such as not being eligible for interest-free days or rewards points.

Here, you’ll find out more about credit card cash advance transactions, including examples of payments that may be defined as “cash advances”, how to check the rates and fees that apply and what to think about before using your card for a cash advance.

What is considered a cash advance on a credit card?

Credit card providers have individual terms of the transactions that they define as “cash advances”.

Typically, using your card to purchase anything which is cash or “quasi-cash” in its own right will qualify as a cash advance. This generally refers to anything which can be directly converted into cash, such as casino chips.

Here, we’ve outlined the range of transactions that may be classified as cash advances and attract the cash advance rate and fees.

Buying foreign currency or traveller's cheques

The 5 most common cash advance transactions

  • ATM withdrawals and cash out. Using your credit card to withdraw money from an ATM or at the checkout is a cash advance. Additional fees could also apply if you use your credit card at a non-network ATM.
  • Gambling transactions. Purchasing lottery tickets and scratchies, placing bets and paying for gambling at a casino or online are considered cash advances. Don’t be surprised if you also have to pay the cash advance rate even on money you spend eating and drinking while at a casino.
  • Gift cards and prepaid cards. Depending on your bank and the type of gift card, some issuers might consider the purchasing of or loading value onto a gift card or other prepaid card as a “cash equivalent” transaction that is subject to the cash advance fee and interest rate.
  • Credit card cheques. Certain credit card issuers send cheques to cardholders that they can use to withdraw money from their accounts as and when they like. While using such cheques can be tempting, you may want to reconsider to avoid the cash advance rate.
  • Buying foreign currency or traveller’s cheques. Using your credit card to buy foreign currency or traveller’s cheques is not a good idea, because such transactions attract your card’s cash advance rate. Instead, if you’re going overseas, you may want to look into a card specifically designed for travel.

Other transactions that may be defined as cash advances on your credit card

  • Balance transfers. A number of New Zealand credit cards come with balance transfer offers, giving cardholders the ability to save money in the form of interest. In many such instances, outstanding balances from balance transfers start attracting the card’s cash advance rate at the end of the promotional period. As a result, if you don’t repay the balance completely before the introductory period ends, you could end up paying more than you initially expected.
  • Transfers between accounts. When you use your credit card account to transfer funds to another account, your card issuer will view it as a cash advance. Instances of this include repaying a loan taken from a friend, transferring money into your everyday banking account, and in some cases, even transferring funds using phone banking. A good way to avoid paying interest on such transactions is to use your debit card instead. If you do plan to use your credit card for electronic transfers, review the fees and charges at the onset.

Where can I find the cash advance fees and charges for my credit card?

woman-phone-card 250x250Most credit card issuers will charge both a cash advance fee and cash advance interest rate for applicable transactions. Details of the cash advance interest rate are also included in the information sheet credit card issuers provide when you’re looking at a new card.

If you already have a credit card and want to know what you’ll be charged, you can usually find these details in the terms and conditions. But if you’re unsure or can’t find this information, contact your credit card issuer to confirm what rates and fees apply before choosing a credit card or using one for cash advances.

Credit card cash advance tip

If you often use your credit card for cash advance transactions, you may want to look at credit cards that charge similar interest rates for purchases and cash advances. While you might still have to pay the cash advance fee, these types of cards make it easier to keep track of the interest charges and sometimes offer lower rates than other credit cards.

What else should I consider before getting a cash advance?

If you plan on using your credit card for cash advances, consider the following questions to help keep costs to a minimum:

  • Will you earn reward points? Typically, you won’t earn reward points for cash advances, unless a credit card comes with some kind of a promotional offer.
  • What are the cash advance conditions when travelling overseas? If you want to use your credit card for cash advances overseas, keep in mind ATM fees and international transaction fees could make it even more expensive.
  • What other options are there? If you want to use your credit card, see if there’s a way to make a purchase instead of a cash advance. For example, if you can pay with your card instead of cash, you won’t need to withdraw money from your account. You could also use your debit card, consider getting a personal loan, or ask your bank if it can provide a line of credit or an overdraft facility.

Credit cards generally aren’t designed to be used as an ATM card. So if you think that you’ll regularly perform cash advances, you may want to consider another option to avoid accruing high fees. Regardless, make sure to read the terms and conditions before applying to ensure that you’re not confronted with any nasty surprises when you get your hands on the card.

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