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

Here's what you need to know about credit card cash advances.

A cash advance allows you to withdraw cash or a cash equivalent using your credit card. While there are times when it’s convenient to use your credit card for a cash advance, it’s an expensive way to borrow.

Use this guide to find out the key details of cash advances, including what qualifies as one. Plus, discover other options that could avoid or reduce the cost of getting a cash advance on your credit card.

Compare cash advance interest rates and fees

Name Product Reward Annual Fee Cash Advance Rate Cash Advance Charge Min Income - Singaporean and PR
Citi Cash Back+ Credit Card
Get up to 14% fuel discounts at Esso and Shell and 1.6% cash back on eligible retail purchases.
$0 annual fee for the first 1 year and $192.60 thereafter
26.9%
$15 or 6% of the amount withdrawn, whichever is higher
$30,000
Receive 10% cash back (up to $300 cash back) on up to $3,000 spend in the first 2 months. T&Cs apply. Valid until 31 Oct 2022.
American Express True Cashback Card
Enjoy 1.5% cashback on all purchases with no minimum spend or cap. Plus receive up to $80 CapitaVouchers when a minimum spend of $250 is made in the first month.
$0 annual fee for the first 1 year and $171.20 thereafter
26.9%
5% of the amount withdrawn
$30,000
Apply today and get a 3% cashback bonus when you spend $5,000 in the first six months.
HSBC Visa Platinum Credit Card
Earn 1 Reward point for every $1 on all spend.
$0 annual fee for the first 2 years and $192.60 thereafter
28%
$15 or 6% of the amount withdrawn, whichever is higher
$30,000
New cardholders can choose from a Samsonite Prestige 69cm Spinner Exp with built-in scale (worth $670) or $200 cashback upon $500 minimum spend. Plus, receive up to $150 cashback when you apply for supplementary cards. Existing HSBC credit cardholders are eligible to receive $50 cashback. T&Cs apply. Ends 31 Dec 2022.
HSBC Revolution Credit Card
Earn up to 10X Reward points or 4 miles per $1 spent on qualifying purchases.
$0 annual fee
28%
$15 or 6% of the amount withdrawn, whichever is higher
$30,000
New cardholders can choose from a Samsonite Prestige 69cm Spinner Exp with built-in scale (worth $670) or $200 cashback upon $500 minimum spend. Plus, receive up to $150 cashback when you apply for supplementary cards. Existing HSBC credit cardholders are eligible to receive $50 cashback. T&Cs apply. Ends 31 Dec 2022.
American Express Platinum Credit Card
Up to 50% off your food bill for unlimited visits at hotels around Singapore
$321 annual fee
26.9%
5% of the amount withdrawn
$80,000
Get $100 CapitaVoucher upon payment of annual fee and first transaction within 30 days from card approval. An additional $100 worth of CapitaVouchers when you spend $2,000 within the first 3 months of card approval. Also, receive 2,500 Membership Rewards points from your base earn rate for the $2,000 spent. T&Cs apply. Valid until 30 Sep 2022.
American Express Singapore Airlines KrisFlyer Ascend Credit Card
For every $1 spent, earn 1.2 KrisFlyer miles on local purchases, 2 KrisFlyer miles on overseas spend in June and December, Singapore Airlines and KrisShop and 3.2 KrisFlyer miles on Grab.
$337.05 annual fee
26.9%
5% of the amount withdrawn
$50,000
Get 16,400 KrisFlyer miles upon annual fee payment and first transaction within 30 days from card approval. An additional 15,000 KrisFlyer miles when you spend $3,000 within the first 3 months of Card approval. Valid until 30 Sep 2022. Also, earn 3,600 KrisFlyer miles based on the $3,000 spend above (based on 1.2 KrisFlyer miles per $1 spent locally). T&Cs apply.
HSBC Advance Credit Card
Receive up to $200 cashback when minimum spend requirements are met.
$0 annual fee for the first 1 year (permanently waived for HSBC Advance banking customers) and $192.60 thereafter
28%
$15 or 6% of the amount withdrawn, whichever is higher
$30,000
New cardholders can choose from a Samsonite Prestige 69cm Spinner Exp with built-in scale (worth $670) or $200 cashback upon $500 minimum spend. Plus, receive up to $150 cashback when you apply for supplementary cards. Existing HSBC credit cardholders are eligible to receive $50 cashback. T&Cs apply. Ends 31 Dec 2022.
Citi Cash Back Card
Get up to 20.88% fuel discounts at Esso and Shell, 6% cashback on dining and 8% cashback on groceries.
$0 annual fee for the first 1 year and $192.60 thereafter
26.9%
$15 or 6% of the amount withdrawn, whichever is higher
$30,000
Get a welcome gift of $300 cash back when you spend $800 in the first two months. T&Cs apply. Ends 31 Oct 2022.
Citi Prestige Card
Deals and discounts in more than 90 countries. Also, get six complimentary golf games across Asia
$535 annual fee
26.9%
$15 or 6% of the amount withdrawn, whichever is higher
$120,000
Receive 120,000 ThankYou Points (48,000 Miles) when you pay the annual fee ($535) and spend $800 within two months. T&Cs apply. Valid until 31 Oct 2022.
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How does a credit card cash advance work?

A cash advance lets you withdraw cash on your credit card, up to a set limit. Your credit card issuer can charge a fixed dollar value or a percentage of each cash advance as a cash advance fee. This normally applies to all ATM withdrawals, transfers and cash equivalent transactions. To withdraw cash on a credit card, you’ll need a PIN and therefore you may need to contact your bank’s customer care team in order to get one. When you have a PIN, the process of withdrawing money is no different to using a debit card.

Paying the balance of a cash advance isn’t made easy by card issuers. Essentially, that’s because you pay a fee upfront and a different APR. The cash advance balance charges a higher rate of interest as soon as you get the money. In other words, the typical “grace period” of 21 to 25 days – during which time you may only pay the interest on your outstanding balance – isn’t applicable. This is a key reason why a credit card cash advance should only be used as a last resort.

Which 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 is the most common type of cash advance transaction.
  • Gambling transactions. Whether it’s online or at the casino, gambling purchases are often considered a “cash equivalent” transaction that attracts cash advance rates and fees. This includes buying credit, chips and lottery tickets as well as placing bets at sporting events or online.
  • Foreign currency and traveller’s cheques. Foreign notes, coins and traveller’s cheques are a form of cash, which means purchasing them with your credit card is considered a cash advance.
  • Cash equivalent purchases on PayPal. Transferring funds to a PayPal account or using your PayPal account for purchases such as gift cards that are categorised as “cash equivalents”.
  • Paying for gift cards or prepaid cards. Like PayPal, using your credit card to buy a gift card or prepaid card is usually classified as a cash advance. This also applies if you use your credit card to reload prepaid credit, debit or store cards.
  • Online transfers. An online transfer from your credit account to your transaction account is a cash advance, as the “credit” from your card is being converted into cash.

Other transactions that may be processed as cash advances

In some cases, payments made with your credit card may be processed as cash advances even if they would normally be deemed as purchases. This usually happens with merchants that offer gambling purchases, such as gambling vendors, lottery tickets or casinos.

In these places, it’s possible that making a regular purchase (such as paying for a drink at the casino) could be processed as a cash advance. If you’re planning on using your credit card with a merchant that provides these types of services, you should check with your credit card provider or the venue to find out if your payment will be considered a cash advance.

Key considerations before using your credit card to make a cash advance

These costs and consequences could make you think twice about using your credit card to get cash or make a cash advance purchase.

  • Higher rate of interest. Cash advance interest rates are higher than purchase interest rates. Compare low cash advance rate credit cards to avoid high interest charges.
  • Attracts an additional fee. The cash advance fee is usually the greater of S$15 or 6% of the total transaction cost. So if you had a card that charged the greater of S$15 or 6% and withdrew S$1,000 from an ATM, you would have to pay a fee of S$60.
  • No interest-free days. Cash advances accrue interest from the day the transaction is made.
  • No points. Cash advance transactions are ineligible to earn rewards or frequent flyer points.
  • Credit card payment allocation. Credit card repayments are allocated to the debt that attracts the highest rate of interest first. This means if you’re also carrying a balance from purchases or a balance transfer, the cash advance transactions will be paid back first when you make credit card repayments.
  • Foreign currency transaction fees. If you use your credit card to get cash out at an overseas ATM, you could also be charged for currency conversion, adding to the overall cost of the cash advance.

Example: How much could a cash advance cost?

To put the cost of cash advances in perspective, let's say you're at a festival and want to use your credit card to get cash out for purchases. Your card applies the following fees and charges:

  • Cash advance fee: The greater of S$15 or 6% of the total transaction cost.
  • Cash advance APR (annual percentage rate): 29% p.a.

If you withdrew a S$1,500 cash advance on the first day of your billing cycle, your initial costs would be the following:

  • Cash advance fee: S$90
  • Total: S$1,590

This transaction would start accruing interest at the rate of 29% p.a. from the day you made the withdrawal. If you didn't make a payment off your credit card for 30 days, your interest charges would be approximately S$36.

That means, over 1 month, you would have paid S$126 for using your credit card to get S$1,500 out of an ATM. If you take 6 months to pay off the debt, you'd end up paying 17% in interest, bringing the total fee you pay for a S$1,500 cash advance for 6 months to S$90 + S$230= S$320. That is more than a quarter of your borrowed sum.

* This is a fictional, but realistic, example.

What are some alternatives to a credit card cash advance?

These options can get you cash quickly.

  • Short-term loans. If you urgently need cash, you may want to consider a short-term cash loan (also known as a “payday loan”). Some of these lenders have application turnaround times of 30 minutes. Note that the interest rates for these loans are often similar to those of credit card cash advance rates, so you may still want to compare your options before deciding on what will be affordable for you. Read more about how cash advances work for short-term borrowing.
  • Personal loan. If you have the time, a personal loan is usually more affordable than a credit card cash advance or short-term loan. While some financial institutions may offer same-day personal loan approval, it usually takes several days or longer for a personal loan application to be processed. When approved, the funds will be deposited into your transaction account and can then be withdrawn from an ATM without attracting cash advance fees. Find out more about personal loans.
  • Debit card. If you need to get cash out of an ATM, the most affordable option is to use a debit card that’s linked to your transaction account. Many of these cards offer fee-free withdrawals when you use the bank’s associated network, allowing you to get the cash you need at no extra cost.

It’s worth noting that personal loan and payday loan application requirements are different. You only need to be working to apply for some payday loans, and you may apply for a payday loan even if you have bad credit.

If you know you will need some extra cash in the future, you may be able to plan ahead and apply for an affordable personal loan or a personal overdraft. It can take a little longer to apply for one of these loans, but the interest rates are generally lower than those of credit cards.

Bottom line

With high rates and fees, credit card cash advances are an expensive option in most circumstances. But if you really want to use a credit card for cash withdrawals or other cash advance transactions, make sure you consider your credit card options with care to help keep your costs to a minimum.

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