Cash advances – the interest rate and fee you’ll pay

A cash advance is when you withdraw money from your credit card, so it's basically a convenient (and expensive) short-term cash loan.

Updated Mar 7, 2022. What changed?

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Most credit cards give you a way to get a cash advance, whether it's by withdrawing money from an ATM, transferring it to your bank account or buying gift cards and other "cash equivalents".

But cash advance transactions come at a cost, with interest rates that are typically higher than what you'll pay for purchases and a cash advance fee. Plus, you usually won't get interest-free days or rewards.

What is a considered a cash advance on a credit card?

Every credit card provider has its own way of defining cash advance transactions but it usually covers withdrawing money or some kind of cash equivalent. Here, we've listed examples of transactions that are typically classified as cash advances.

The 5 most common cash advance transactions

1. ATM withdrawals and cash out

One of the most common examples of a cash advance is when you use your credit card to withdraw money from an ATM or get cash out in a shop. Additional fees could also apply if you use your credit card at an ATM that's outside of your bank or provider's network.

2. Gambling transactions

Buying lottery tickets and scratchies, placing bets and paying for gambling at a casino or online are treated as cash advances by most credit card providers. In some cases, you may even pay the cash advance rate when you use your credit card to pay for drinks and meals at a casino. There are also credit cards that ban gambling transactions.

3. Gift cards and prepaid cards

Most credit card providers classify gift card purchases as a "cash equivalent" transaction that is subject to the cash advance fee and interest rate. Adding funds to a prepaid card also falls under this classification.

4. Transfers between accounts

When you use your credit card account to transfer funds to another account, whether your own or someone else's, your card issuer will view it as a cash advance. A good way to avoid paying interest on such transactions is to use your debit card instead.

5. Buying foreign currency

Using your credit card to buy foreign currency or traveller's cheques is not a good idea, because such transactions attract your card's cash advance rate. Instead, if you're going overseas, you should look into a card specifically designed for travel.

Other transactions that may be defined as cash advances on your credit card

Bill and BPAY payments. Some credit card providers process bill payments as cash advance transactions. For example, BPAY payments, utility bills and government charges such as property rates or ATO bills. Check with your credit card provider and the business you're paying to find out if your transaction will be considered a cash advance.
Buying cryptocurrency. If you have a credit card that allows you to buy cryptocurrency it will be considered a cash advance transaction.
Balance transfers. While balance transfers are not typically defined as cash advances, it's worth noting that many credit cards apply the cash advance interest rate at the end of the introductory period if you're still paying off the balance you transferred.

How much do cash advances cost?

Cash advances typically have higher interest rates than standard credit card purchases, with most ranging from 19% p.a. to 22% p.a. and some as high as 25.99% p.a.

They also attract a cash advance fee worth 2-3% of the transaction and are not eligible for features such as interest-free days or reward points.

Credit card provider cash advance costs

Check out the cash advance fee and interest rates charged by major financial institutions in the following table. These rates may vary between cards, so it's still important to check the details of your individual credit card for specific fees that will apply to you.

Search by provider

Credit card issuer	Cash advance interest rate	Cash advance fee
American Express	Cash advances are largely unavailable	For enrolled cardholders only: $2.50 or 2% of the cash advance amount, whichever is greater
ANZ	21.24% p.a.	3% of the transaction amount in Australia 3% of the transaction amount or $4 (whichever is greater) for overseas transactions
Bankwest	21.99% p.a.	2% of transaction amount or $4 (whichever is greater)
Citi	22.24% p.a.	3.5% or $3.50 of the transaction amount
Commonwealth Bank	9.9% p.a.–21.24% p.a.	$3 or 3% of the transaction value, whichever is greater
HSBC	25.99% p.a.–25.99% p.a.	The higher of $4 or 3.0% of the total transaction amount
NAB	21.74% p.a.	2% or $2.50, whichever is greater
St.George	21.49% p.a.	3% of each cash advance amount
Suncorp Bank	21.99% p.a.	3.5% of the transaction amount, with a minimum fee of $3.50
Westpac	21.49% p.a.	3% of each cash advance amount

This table gives you an idea of how expensive cash advances can be, with most interest rates between 17% and 21.99% p.a.

The lowest cash advance fee is just $2.50, but generally you'll pay a percentage of the total transaction amount, which ranges from 2% to 3.5%. To put that in perspective, if you withdraw $1,000 from an ATM with a credit card that charges a 3.5% fee, you will pay a fee of $35 in cash advance fees alone.

Sometimes, you will also pay an ATM withdrawal fee, which could be charged by your provider, the ATM operator, or both. There are some credit cards that charge the same interest rate for purchases and cash advances, although the cash advance fee and any ATM fees will still apply.

Where can I find the cash advance fees and charges for my credit card?

When you're looking at a new card, you'll find details about cash advances in the rates and fees information as well as the Key Facts Summary or sheet that's provided by banks and other lenders.

If you already have a credit card, you can usually find these details by logging into your account or checking the product disclosure statement. Your monthly credit card statement will also show the current cash advance interest rate but won't usually show the cash advance fee unless it's been charged.

If you're unsure or can't find details about cash advances, contact your credit card provider to confirm what rates and fees apply.

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, say you withdrew $500 from an ATM with a card that has a cash advance rate of 21.99% p.a. Let's also say you are charged a 3% cash advance fee of $15. In this scenario, you're not charged an ATM fee. So the calculations to look at are:

21.99 percent / 365 days = 0.06024
0.06024 x $500 = $30.12
$30.12 x 18 days = $542.16
$542.16 /100 percent = $5.42
$5.42 + $15 = $20.42

This means it would cost you $20.42 to borrow $500 for 18 days. You could also use a credit card repayment calculator to quickly work out cash advance interest rate costs.

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).

This means cash advance transactions are considered as being a greater risk to lenders than standard credit card purchases. So, a cash advance fee and 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 people from regularly using a credit card for cash advance transactions, which also reduces the potential risk for lenders.

What to think about before making a cash advance

Cash advances aren't the same as purchases. As well as the fees and interest costs, here are some other key details to keep in mind:

Cash advance limits. Most credit cards have daily, weekly or monthly cash advance limits in place. For example, you may only be able to withdraw up to $500 a day. Or, you may only be able to access a percentage of your available credit limit for cash advances.
Repayments. Your credit card provider has to apply your repayments toward the part of your balance that attracts the highest interest first. Since cash advances tend to have higher interest rates than purchases, your repayments will usually go towards reducing your cash advance balance first.
No interest-free days. Most credit cards give cardholders the ability to make use of interest-free days if they pay their closing balances in full each month. These interest-free days only apply to purchases. When you use your card for a cash advance, it starts attracting interest straight away.
Rewards. Cash advance transactions are not considered "eligible" when it comes to earning rewards points or meeting a bonus point spend requirement.
Introductory 0% p.a. interest rate offers. Most 0% interest offers apply to standard purchases or balance transfers, so cash advance transactions are generally not eligible for the promotional rate of interest.

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 payday 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.

Tip to avoid cash advance transactions

If you're worried about accidentally using your credit card for a cash advance or want to avoid the temptation, some credit cards give you a way to put a block on cash advances.

For example, both NAB and CommBank let you set up controls for cash advances and gambling transactions through their mobile apps. Just log into your account or contact your credit card provider to see if this is an option on your card.

While credit card cash advances can give you quick access to cash, the costs involved usually outweigh the benefits. Make sure you understand what is considered a cash advance and the interest rates and fees that apply to weigh up whether it's worth it. And 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.

Low cash advance credit cards comparison

1 - 1 of 1

Name	Product	Interest-free period	Cash advance rate	Purchase rate p.a.	Annual fee
Bendigo Bank Low Rate Credit Card		Up to 55 days on purchases	13.99% p.a.	0% for 20 months, reverts to 11.99%	$45	Save money on interest for up to 20 months with 0% p.a. on purchases and balance transfers (11.99% p.a. after). Plus, a $45 annual fee.	Go to site More Info	Compare	loading Fetching your data...

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Frequently asked questions about cash advances

Yes, you can transfer this debt to a balance transfer credit card and take advantage of an introductory interest rate, providing you meet the card's eligibility requirements and are approved by the issuer. Just be aware that you'll still need to pay off the balance – ideally during the introductory period so you can reduce or avoid more interest charges.
While newspapers and stationery would be everyday purchases, most credit card providers would classify buying lottery tickets or scratchies as cash advances on your credit card. This is because lotto and other forms of gambling give you a cash equivalent, rather than a tangible item like a newspaper.
And if you tried to buy your lotto ticket with a credit card that doesn't allow gambling – and the merchant has correctly classified your purchases as a gambling transaction – the transaction would be declined.

Images: Shutterstock

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Amy Bradney-George

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Amy has been writing about personal finance for more than 13 years – including over 600 articles as a senior writer for Finder. She is also the editorial lead for Finder Green, covering sustainability across different industries. Her work has appeared in publications including Money Magazine, The Sydney Morning Herald, Financy, ABC News Australia and Equity Magazine. Amy also has a Bachelor of Arts in Journalism and Drama from Griffith University.

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26 Responses

BRETTMay 25, 2017

Hello,
I was looking at a cash advance and realise the interest is higher but my question is say I owe $1000 on my credit card and get $100 cash advance do I pay the higher interest rate on the $100 until it’s paid in full or do I now pay the higher interest rate on the $1100 until it’s paid in full?

Reply
- finder Customer Care
  
  HaroldMay 25, 2017Staff
  
  Hi Brett,
  
  Thank you for your inquiry.
  
  Typically, regardless of the amount, the interest for cash advances is normally 20% p.a. or more, which is considerably higher than the purchase rate of around 13% p.a. that some low rate credit cards charge. With this in mind, credit cards typically charge higher interest rates. So, in your example, your cash advance will immediately be charged with the cash advance interest rate and unless you don’t pay in full your cash advance, you will continually incur interest, which can be very expensive.
  
  With this in mind, you might want to try and apply for a personal loan, instead, which might offer a lower interest rate.
  
  I hope this information has helped.
  
  Cheers,
  Harold
  
  Reply
BradleyOctober 15, 2016

Took a cash advance of $200, charged $5; Paid amount due for the month on time and next statement have additional interest charge of $1. Why when I paid it off and how long will this continue?

Reply
- finder Customer Care
  
  MayNovember 4, 2016Staff
  
  Hi Bradley,
  
  Thank you for your question.
  
  Your card will continue to charge interest each time you’re not able to pay your balance in full at the end of the payment cycle. So in the next statement you receive, you’ll be able to see your remaining balance in the previous statement plus interest.
  
  However, if you have paid your account balance in full like you did for your cash advance, in your next statement, you will not be able to see any unpaid fees and interest. Unless if there are any due interest or fees that have not been accounted for in the previous statement/cut-off, these charges will most likely appear on your next statement.
  
  Cheers,
  May
  
  Reply
HarryMay 1, 2016

Hi,

I was wondering with my credit card which has interest free period of 55 days on purchases whether a cash advance would affect my interest free rate on purchases?

For example, if I take a cash advance of $500 on 1st of June, if I then used my card for purchases on 4th June would I still have the interest free rate on purchases?

Thanks in advance.

Reply
- finder Customer Care
  
  MayMay 3, 2016Staff
  
  Hi Harry,
  
  Thanks for your question.
  
  Interest-free days provide you with a period of purchasing with no interest charges. The requirement for receiving this benefit is to repay your balance in full by the payment due date. An example of that is the 55 interest-free days on purchases, excluding cash advances. So your cash advances will not affect your 55 interest-free days.
  
  However, please keep in mind that if you use your card on any form of cash advance, your card will immediately charge you with interest and cash advance fees – which of course, you need to pay off as well on your due date.
  
  I hope this has answered your question.
  
  Cheers,
  May
  
  Reply
MarkDecember 2, 2015

Hello

I would like to take a cash advance on my credit card which charges 21.49% PA for CA. I intend to have this paid back in 20 days.

Is the calculation I am using correct?

21.49 / 360 X 20 = 1.20%

Total amount to repay being $1518 excluding other fees?

Thank you

Reply
- finder Customer Care
  
  JonathanDecember 2, 2015Staff
  
  Hi Mark, thanks for your inquiry!
  
  Nice work trying to work your interest repayment out, there are only a couple of figures that need replacing in your equation.
  
  0.2149 / 365 x 20 = 0.01177534246
  = 1.18% (2 decimal places)
  You can multiply that percentage by your amount outstanding and number of days for the total amount of interest.
  
  Cheers,
  
  Jonathan
  
  Reply
MaddyJuly 1, 2015

Hi there,
I am new to the credit card game. I am going overseas in the next few weeks and intend to use my credit card for purchases and for cash. I have a 21.49% cash advance rate – does this mean with every cash withdrawal I make I am charged 21.49% on top of what I withdrawal? For example I take out $200 will I then owe $42.98(21.49/100 x 200) on top of the $200 amount?

I have a debit card – should I transfer money from my credit account into my debit to make withdrawals or does this still come with a fee?

Thank you in advance :)

Reply
- finder Customer Care
  
  JonathanJuly 8, 2015Staff
  
  Hi Maddy,
  
  Thanks for your inquiry.
  
  The cash advance rate of 21.49% p.a. is calculated on a daily basis, multiplied by the cash advance amount outstanding by the number of days that the debt is remaining.
  
  Please refer to the following guide for more information on cash advance interest rates.
  
  Withdrawal fees for credit cards depend on the bank. Generally, cash withdrawals from the bank’s ATM or partner ATM will not incur any fees. You may also like to refer to low-interest rate credit cards which can provide the flexibility and convenience to spend and make purchases on your card whilst taking advantage of lowest interest repayments. Please ensure to read through the relevant product disclosure statement and terms and conditions to ensure that you got everything covered before you apply.
  
  Cheers,
  Jonathan
  
  Reply