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

What you need to know about credit card cash advances.

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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, 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 Lazada Card
Earn 10x rewards on eligible Lazada purchases and 5x rewards on qualifying dining, entertainment and commute purchases
S$0 annual fee for the first 1 year and S$192.60 thereafter
26.9%
S$15 or 6% of amount withdrawn, whichever is higher
S$30,000
New Citibank customers can get S$250 Lazada & RedMart vouchers as they spend. T&Cs apply. Ends 10 Dec 2020.
KrisFlyer UOB Credit Card
Earn 3 KrisFlyer miles per S$1 when you spend with Singapore Airlines, Scoot, SilkAir or KrisShop and 1.2 KrisFlyer miles per S$1 on all other spend.
S$0 annual fee for the first 1 year and S$192.60 thereafter
28%
8% of cash advance amount subject to a minimum fee of S$15
S$30,000
New cardholders can receive 7,000 KrisFlyer miles when applying and spending a minimum of S$1,500 within 30 days of card approval. Ends 31 Dec 2020. An additional 3,000 KrisFlyer miles for new cardholders upon spending a minimum of S$5. Existing UOB cardmembers get 3,000 KrisFlyer miles after the first transaction of S$5 minimum. T&Cs apply.
UOB Yolo Card
Enjoy a wide variety of discounts and cashback rebates on dining, entertainment, online shopping and travel.
S$0 annual fee for the first 1 year and S$192.60 thereafter
28%
8% of cash advance amount subject to a minimum fee of S$15
S$30,000
Apply today and get S$150 in bonus cash credits. T&Cs apply.
UOB One Credit Card
Get S$150 cash credit when you apply. Minimum S$1,500 spend within 30 days. First 200 eligible applicants only.
S$0 annual fee for the first 1 year and S$192.60 thereafter
28%
8% of cash advance amount subject to a minimum fee of S$15
S$30,000
Apply today and get up to S$150 in bonus cash credits. T&Cs apply. Ends 31 Dec 2020.
UOB PRVI Miles American Express Card
Earn 1.4 miles for every S$1 spent locally with no minimum spend or cap.
S$0 annual fee for the first 1 year and S$256.80 thereafter
28%
8% of cash advance amount subject to a minimum fee of S$15
S$30,000
Enjoy up to 20,000 bonus miles if you charge S$50,000 to your card in a year. Apply today and enjoy free transfers to Changi Airport.
UOB PRVI Miles World Mastercard
Earn 1.4 miles per S$1 spent locally and 2.4 miles per S$1 spent overseas, including online shopping.
S$0 annual fee for the first 1 year and S$256.80 thereafter
28%
8% of cash advance amount subject to a minimum fee of S$15
S$30,000
Apply today and enjoy up to S$150 in cash credits if minimum spend requirements are met.
UOB PRVI Miles Visa Card
6 air miles for every S$1 spent through Expedia, Agoda and UOB Travel
S$0 annual fee for the first 1 year and S$256.80 thereafter
28%
8% of cash advance amount subject to a minimum fee of S$15
S$30,000
Apply today and enjoy up to S$150 in cash credits. Plus, free travel cover.
UOB Lady's Card
Earn 10X UNI$ (or 20 miles) per S$5 spent on a chosen spending category with no min. spend required, and 1X UNI$ (or 2 miles) on other purchases.
S$0 annual fee for the first 1 year and S$192.60 thereafter
28%
8% of cash advance amount subject to a minimum fee of S$15
S$30,000
Apply today and get S$150 in bonus cash credits. T&Cs apply.Ends 31 Dec 2020.
American Express True Cashback Card
Enjoy cashback on all purchases with no minimum spend or cap. Plus receive up to S$80 CapitaVouchers when a minimum spend of S$500 is made in the first month.
S$0 annual fee for the first 1 year and S$171.20 thereafter
26.9%
5% of the amount withdrawn
S$30,000
Apply today and get a 3% Cashback bonus when you spend S$5,000 in the first six months.
HSBC Visa Platinum Credit Card
Earn 1 Reward point for every $1 on all spend.
S$0 annual fee for the first 2 years and S$192.60 thereafter
28%
S$15 or 6% of the amount withdrawn, whichever is higher
S$30,000
New cardholders will be awarded with a Samsonite Prestige 69cm Spinner Exp with built-in scale (worth S$670) or S$150 cashback with minimum spend of S$800 within the qualifying spend period while existing cardholders will get S$30 cashback. Receive an additional S$30 worth of Lazada vouchers when you apply online with MyInfo via SingPass. T&Cs apply. Ends 31 Dec 2020.
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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 as 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, 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 categorized 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.

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:

  • 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 one 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.

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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