When you make a cash advance, you'll be charged interest from the moment you take it out. Paying off the balance quickly can help reduce your total cost, as there is no interest-free period for cash advances. Interest is calculated daily from the date of the transaction until the cash advance, cash advance charge and interest on the cash advance are paid in full. In addition to interest charges, you may also be charged a one-time fee known as a cash advance fee.
This fee is calculated as a percentage of the cash advance (in Australian dollars) or the minimum commission, whichever is greater. It will be added to the balance of the cash advance, meaning you can also pay interest on this charge. Cash advances usually don't qualify for rewards, cashback programs, or any other credit card benefits. A cash advance is defined differently by each credit card provider, but it typically covers the withdrawal of money or some type of cash equivalent.
It can be convenient if you don't have cash on hand, but it will cost more than making a credit card purchase for the same amount. If you're worried about accidentally using your credit card for a cash advance or want to avoid the temptation, some credit cards offer you a way to block cash advances. A cash advance may seem like an easy way to get money quickly, but it can end up costing you a lot in interest and fees. Instead of getting a cash advance to pay a bill, you may be able to ask your creditor to extend or change its due date.
In essence, a cash advance acts like any other purchase made through your credit card, but instead of buying goods or services, you buy cash. Your monthly credit card statement will show the current interest rate of the cash advance, but it will not normally show the cash advance charge unless it has been collected. In addition to the fee, you will also be charged interest on the cash advance from the day you take it out until the day you pay it off. In some cases, you can even pay the cash advance fee when you use your credit card to pay for drinks and meals at a casino. It's important to understand what you're getting into before taking out a cash advance.
See the cash advance fee and interest rates charged by major financial institutions in the table below. For example, both NAB and CommBank allow you to set up controls for cash advances and gaming transactions through their mobile applications. A cash advance may still make sense compared to other ways to get a quick loan, such as a payday loan, which usually needs to be paid back before your next paycheck.
