Cash Advance Fees

Cash Advances are when a credit card user withdraws cash from their credit card account.  Many of these cash advances have cash advance fees attached to them.

Cash advances can be quite complex and different from the way a credit card is used in when an item is bought with a credit card. 

In many cases cash advances have a cash advance fee that is charged for using the cash advance facility.  This is usually set at a percentage of the cash that is advanced, but there tend to be minimum amounts for these fees so the amount that can be charged can be considerably higher than the percentage of the fee that is advertised.

The advance may also attract a transaction fee if the card is used in an ATM that is in a different bank network to the issuer of the credit card.  In this case then there is likely to be a fee as there would be if the account holder was using a normal bank card.

There may be a foreign transaction fee on top of this when a credit card is used abroad.

Cash advances in most cases have a higher interest rate than balances that come from a balance transfer or spending.  Introductory offers rarely apply to cash advances.

Interest is also higher on cash advances as they are often paid off last from the repayments.  This means that any balance left on the cash advance will be charged in full until lower interest balances have been totally paid off.

There is also rarely an interest free grace period with a cash advance which means that the interest is charged as soon as the cash is paid out.  Credit card users who pay off their card balance every month often believe that they are paying no interest which is not the case with a cash advance.

The terms on cash advances apply to a number of different ways in which cash is withdrawn including withdrawing cash along with a purchase in a shop, using a credit card for nets, credit card checks and cash withdrawn with a credit card in an ATM.

The amount allowed for a cash withdrawal is usually a proportion of the credit limit, rather than to the whole credit limit, although more expensive credit cards, for example platinum and gold cards, have higher proportions and credit limits.