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What you need to know about cash advance interest rates

A credit card cash advance gives you quick access to money but it often comes at a high cost.


While credit cards are designed to pay for purchases, you can also use them to get cash or a cash equivalent. Known as a cash advance, these transactions generally attract higher rates and fees when compared to regular purchases. So it’s important to consider whether the convenience of using a credit card for cash advances is worth it.

Use this guide to learn what transactions are defined as cash advances, the reasons credit card providers usually charge a higher interest rate and the fees and charges you may pay when you make a cash advance. We also look at your alternatives to making cash advances and answer frequently asked questions so you can use your credit card in a way that works for you.

What is a cash advance?

A cash advance is a type of transaction that allows you to access funds in the form of cash or a “cash equivalent”. For example, using your credit card to withdraw money from an ATM, pay for gift cards or buy foreign currency are all commonly defined as cash advance transactions.

Cash advances typically have higher interest rates than standard credit card purchases, with most ranging from 19% p.a. to 22% p.a. They also attract a fee worth 2-3% of the transaction and are not eligible for features such as interest-free days or reward points. There are some credit cards that charge the same interest rate for purchases and cash advances, although the cash advance fee still applies.

How to calculate cash advance charges

First, divide the cash advance interest rate by 365 (number of days in a year). Then, multiply it by the amount withdrawn. Finally, multiply that number by the number of days from the transaction to the date it is paid (since cash advances start to accrue interest immediately). If your card charges a cash advance fee, you should add this to your final number to get the total cost of your cash advance.

As an example, you take $500 in notes out of an ATM, the cash advance rate is 21.99 percent, you pay the full amount back in 18 days and you are charged with a $4 cash advance fee.

  1. 21.99 percent / 365 days = 0.06024
  2. 0.06024 x $500 = 30.12
  3. 30.12 x 18 days = $542.22
  4. $542.22 /100 percent = $5.42
  5. $5.42 + $4 = $9.42

Meaning you will pay $9.42 to borrow $500 for 18 days.

What transactions are classified as a cash advance?

Using your credit card to withdraw money from an ATM, bank branch or at the checkout clearly qualifies as a cash advance. Other transactions considered as "cash advances" may vary depending on your issuer, but could include:

  • Buying foreign currency or traveller's cheques
  • Gift card or prepaid debit card purchases and top-ups
  • Using a non-BPAY registered billing service to pay bills
  • Utility and government charges
  • Transactions at physical or online casinos (which can include money spent on food and beverages)
  • Other gambling transactions, such as buying lottery tickets or scratchies
  • Transferring funds from your credit card account to any other bank account

For a full list of what your credit card issuer considers a cash advance and the charges that will you'll incur, please see your card's Product Disclosure Statement.
hand using laptop while holding a credit card on the other

Why do banks charge higher interest rates for cash advances?

Cash advances are similar to short-term loans in that they provide you with funds on short notice. The cash you get can then be used for anything you want, including transactions you wouldn't normally be able to use a credit card for (such as paying other debts). As such, these transactions are considered as being a greater risk than standard credit card purchases.

A higher standard interest rate can help lenders offset this risk by providing them with more potential profits when you use your card for a cash advance. The rates and fees applied can also help deter you from regularly using a credit card for cash advance transactions, which also reduces the potential risk for lenders.

What fees and charges apply when using a credit card for a cash advance?

Using your credit card for a cash advance should be a last resort, and if you do end up taking this path, remember the following.
girl using atm to withdraw cash

  • Cash advance fees. These are usually charged as a percentage of the total cash advance amount. For example, if you withdrew $1,000 on a credit card with a cash advance fee of 3%, you would pay a fee of $30. This fee will add to the balance on your card and increase your interest charges.
  • Interest charges. Interest applies from the day you make the cash advance transaction. For example, if your credit card had a cash advance rate of 21.99% p.a. and you made a cash advance transaction worth $1,030 (with a 3% cash advance fee), you would be charged $18.64 for the first month you carried this debt. If you only paid the minimum off it each month, it would take you around 9 years to pay it off and cost a total of $1,274 in interest.
  • ATM fees. Some providers and third-party companies will charge an additional fee when you withdraw money from an ATM outside your provider's network. These charges will add to the overall cost of your cash advance. You may be able to avoid these fees by using an ATM that's part of your provider's network.
  • Cash advances overseas. If you use a credit card for a cash advance overseas, you could attract other charges, including ATM fees and currency conversion fees. These will be added to the total cost of the cash advance, leading to even higher interest charges.

Cash advances and credit card repayments

Following the credit card reforms in 2012, banks have to allocate your repayments to the debt that is accruing the highest interest first. So if you've used your card for both purchases (which might accrue interest at 14%) and cash advances (which collect 22% interest), your repayments will go directly to your cash advances. If you're trying to repay your purchases without collecting interest, it's important to remember this and where your repayments are actually going.

What are the alternatives to cash advances?

If you want to avoid the extra fees and high-interest rates that come with using your credit card for a cash advance, you can consider the following alternatives:

  • Debit cards. Using your debit card to withdraw money from your bank account won't attract cash advance fees. In fact, it's likely to be fee-free if you stick to your own bank’s ATM network.
  • Direct bank transfers. If you need to make a payment straight away, you could consider a direct transfer from your bank account. This allows you to pay anyone using your own money instead of funds from your credit card, which means you won't be charged interest or a cash advance fee.
  • Loans. If you need extra funds, you may also want to consider getting a short-term loan or a personal loan to cover the costs. These options could have lower interest rates than credit card cash advances. Plus, some short-term loan issuers can give you access to approved funds on the same day or by the next business day.

Cash advances can be convenient when you need money in a hurry and have no other option, but the rates and fees they attract mean that cash advances should only be considered as a last resort. If you still think you may use your credit card for a cash advance, you may want to compare credit cards with low cash advance rates to see if there is an option that will work for you.

Frequently asked questions about credit card cash advances

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54 Responses

  1. Default Gravatar
    CandieDecember 31, 2016

    If I have a credit balance i.e. i have put money into my credit card and now would like to transfer that money out because i don’t need it in my credit card account, will i be charged a fee?

    • Avatarfinder Customer Care
      MayDecember 31, 2016Staff

      Hi Candie,

      Thanks for your question.

      Depending on your credit card issuer. Usually, if withdraw your credit balance, you won’t be charged a cash advance interest. However, a cash advance fee will still be charged to your account.


  2. Default Gravatar
    GigiNovember 2, 2016

    If I transfer 10k from my credit card to my savings account how much fee will I be charged for a cash advancement? I have the 55day visa credit card westpac

    • Avatarfinder Customer Care
      DeeNovember 2, 2016Staff

      Hi Gigi,

      Thanks for your question.

      If you are holding a Westpac 55 Day Credit Card, you’ll be charged 21.29% p.a. from the time make a cash advance.


  3. Default Gravatar
    RaviJune 16, 2016

    Hi, I have paid my college fees from my credit card, and due to an emergency I have to get some cash out from atmosphere around $300.

    So, my question is, do I have to pay extra interest on the money I have used for paying my fees or just on the $300.


    • Avatarfinder Customer Care
      DeeJune 16, 2016Staff

      Hi Ravi,

      Thanks for your question.

      Generally college tuition payments are classified as purchases. However, to be sure that you won’t be attracting a cash advance rate for paying your tuition fees, I suggest that you contact your university to inquire.

      I hope this helps.


  4. Default Gravatar
    AdamMay 27, 2016

    I took an advance of 4000 out and have a 6.7% interest rate on my credit card. Is this 6.7% per day? The teller seemed to be alluding to this.

    • Avatarfinder Customer Care
      MayJune 1, 2016Staff

      Hi Adam,

      Thanks for your question.

      Generally, cash advance interest rates are per year/annum. The moment you make a cash advance on your card, you’re automatically charged with fees and interest. The interest will then be computed daily based on the average interest rate per year (divided by 365 days) your card charges.

      For more information, you may like to read our article on how much cash advance fee would cost you. On the same page, you can also compare the different cash advance rates charged by credit card companies.

      I hope this has helped.


  5. Default Gravatar
    JuliaMay 13, 2016

    I have RM130,000.00 credit limit of my Citibank credit card. How much can I withdraw as a cash advance from the ATM machine?

    • Avatarfinder Customer Care
      SharonMay 17, 2016Staff

      Hi Julia, thanks for your inquiry.

      Using your Citi Credit Card, you can withdraw cash up to $1,000 per day at any ATM that displays the Visa or MasterCard symbol. Please note that standard cash advance fees and charges may apply.

      When overseas, you can access cash from any ATM that displays the Plus, Star or NYCE symbols. For transactions overseas, currency conversion fees may apply.

      I hope this helps.



  6. Default Gravatar
    ChrisApril 15, 2016

    If I load my credit card up with cash, can I withdraw from an atm overseas without paying interest? I have had trouble with travel cards in the past. After all, I will be using my own money.

    • Avatarfinder Customer Care
      MayApril 15, 2016Staff

      Hi Chris,

      Thanks for your question.

      Loading with funds onto your credit card is actually possible. But the question is, what happens if we do this? Let’s figure it out in two scenarios:

      1. If your card is updated and it has no outstanding balance – Say your card is current, the excess funds you loaded onto it will increase your spending limit – in effect, you’ll have more funds to use on purchases. However, if you withdraw the funds, it will be treated as a cash advance and you’ll be charged with fees and interests. Aside from that, depending on the brand you hold, there are also other fees that’ll be charged to your credit card (for making overseas cash withdrawals) like foreign currency conversion fees, ATM withdrawal fees, and other overseas transaction fees.

      2. If your card has an outstanding balance – The funds you deposited onto your card, will only be treated as payments.

      Unlike loadable travel money or debit cards where you spend your own cash, credit cards let you borrow money at the time you use them on purchases or cash withdrawals.

      Hope this helps.


    • Default Gravatar
      SarahApril 22, 2016


      I am travelling to the US next week and want to load up my credit card with an addition $2k as funds to ‘cash withdraw’ as required.
      I have a Westpac Visa – Platinum.


      I have a zero balance owing on the account
      I have a credit surplus of $2k on the account
      I understand that a cash advance of $500 automatically triggers a cash advance interest rate.


      If my balance owing remains zero, but the card now holds a credit surplus of $1500, upon which amount is the cash advance interest rate calculated?

      I have made a number of phone calls to Westpac in this regard and to be honest, I’m more confused now than ever – given I have always expected to pay interest on the debt owed, but not on my credit held.

      Please put me out of my misery.


    • Avatarfinder Customer Care
      MayMay 4, 2016Staff

      Hi Sarah,

      Thank you for your question.

      Sorry for the delayed reply. Please keep in mind that different companies differ on their credit card terms and conditions. With Westpac Visa Platinum card, you won’t be charged interest on a cash advance with a surplus in the account, you will just be charged with $2.50 cash advance fee.

      However, in a scenario like you got $15,000 credit limit (assuming you did not load your card with funds yet) then you have already spent $2,000 to make your remaining balance at $13,000, by the time you do a cash advance, you will be automatically charged with interest and a cash advance fee.

      Hope this clarifies your confusion.


  7. Default Gravatar
    karthikApril 8, 2016

    Actually, I have withdrawn a cash advance of 3000 and 8000 in between two days in the same month, so I have been charged two times charges. Please reply how does it work?

    • Avatarfinder Customer Care
      MayApril 12, 2016Staff

      Hi Karthik,

      Thanks for your inquiry.

      Withdrawing funds from your credit card – either through ATM, visiting your branch, transferring cash to your bank account or issuing cheques linked to your credit card – is a form of cash advance. Starting from day one, your card already incurred interest just like for the two cash withdrawals you made on your card. As a result, you have to try to repay the borrowed amount as soon as possible as the interest applied for cash advances are higher. You can find more information on cash advances when you visit this page.

      Hope this has helped.


  8. Default Gravatar
    sheshagiriJanuary 24, 2016

    i had withdrawn 18000 from my titanium card what is the interest will be charged for it??

    • Avatarfinder Customer Care
      AllyJanuary 25, 2016Staff

      Hi Sheshagiri,

      Thanks for reaching out.

      Kindly note that is an online comparison service and does not represent any credit card issuer; therefore, we are not in the position to specifically answer that question.

      Nonetheless, we can still lead you to a review page of the credit card you’re using if it is being featured on our site. May we know which one you’re referring to so that we can check if we have a review page for it? Is it the Intech Credit Union Titanium 55 Credit Card?

      If not, you can try searching for it by typing in the credit card name on the search box at the top of this page to see if there are any results for it.

      Otherwise, you can always get in touch with your credit card issuer by visiting their website and by clicking on the ‘Contact’ button on their page for direct assistance.


  9. Default Gravatar
    NickJanuary 21, 2016

    Hi I was wondering at a rate of 21.94% – if I was to withdraw a cash advance of $6000 on my credit card, at the end of 30 days what would I owe in total??

    • Avatarfinder Customer Care
      DebbieJanuary 25, 2016Staff

      Hi Nick,

      Thanks for your inquiry.

      This will depend on the minimum amount due of the credit card that will also be provided to you on your statement account each month. You must pay your minimum or full payment before due date to avoid any interest or late payment fee charges.

      You may wish to check our guide to understand more about credit card minimum repayments.

      I hope this helps.


  10. Default Gravatar
    michaelSeptember 21, 2015

    we are using an architect who does not have a credit card facility.
    we pay all our bills with an emirates platinum credit card,then repay into it from our own account.
    if i take a cash advance from the credit card to pay the architect,then put the cash straight back into the credit card from our cash account,will i still pay charges, we use our points for overseas flights?


    • Avatarfinder Customer Care
      JonathanSeptember 22, 2015Staff

      Hi Michael, thanks for your inquiry!

      The cash advance fee is charged on a daily basis. As long as you repay the amount within the same business day there will be no interest charged.



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