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What credit card transactions are considered cash advances?

Information verified correct on December 9th, 2016

Do you know that different types of credit card transactions, other than withdrawing cash from ATMs, qualify as cash advances?

Most credit cards give you the facility to get cash or a "cash equivalent" using your account. Known as "cash advances", these transactions often attract a higher interest rate than purchases. Cash advances also come with other restrictions, such as not being eligible for interest-free days or rewards points. Along with the higher interest rate and restrictions, these transactions can also attract additional cash advance fees.

What is considered a cash advance?

The following credit card transaction types may qualify as cash advances, and every such transaction attracts a given card’s cash advance rate.

  • ATM withdrawals. Using your credit card to withdraw money from an ATM is a cash advance, and if you use a non-network ATM you may have to pay additional ATM fees.
  • Cash out with a purchase. A number of stores give you the ability to get cash out, no matter whether you make an accompanying purchase or not. In any such situation, prepare to pay the cash advance rate on the cash out amount.
  • Gift cards and prepaid cards. Most issuers consider the purchasing or loading value onto a gift card or other prepaid card as a “cash equivalent” transaction that is subject to the cash advance fee and interest rate.
  • Gambling transactions. If you feel that using your credit card for gambling transactions is a good idea, think again. When you use your credit card at a physical or an online casino, expect your card issuer to charge the cash advance rate. Don’t be surprised if you have to pay the cash advance rate even on money you spend eating and drinking while at a casino.Credit card cheques. Certain credit card issuers send cheques to cardholders that they can use to withdraw money from their accounts as and when they like. While using such cheques can be tempting, you may want to reconsider to avoid the cash advance rate.
  • Buying foreign currency or traveller’s cheques. 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.
  • Bill payments. Using your credit card to pay bills is convenient, but find out if you would have to pay your card’s purchase rate or cash advance rate for the same. Making bill payments via BPAY, for example, classify as purchases, and not cash advances.
  • Balance transfers. A number of Australian credit cards come with balance transfer offers, giving cardholders the ability to save money in the form of interest. In many such instances, outstanding balances from balance transfers start attracting the card’s cash advance rate at the end of the promotional period. As a result, if you don’t repay the balance completely before the introductory period ends, you could end up paying more than you initially expected.
  • Transferring between accounts. When you use your credit card account to transfer funds to another account, your card issuer will view it as a cash advance. Instances of this include repaying a loan taken from a friend, transferring money into your everyday banking account, and in some cases, even transferring funds using phone banking. A good way to avoid paying interest on such transactions is to use your debit card instead. If you do plan to use your credit card for electronic transfers, it’s good that you review the fees and charges at the onset.
How to check if your biller is registered with BPAY

An easy way to do this is to look for the BPAY logo on your bill. The presence of the logo indicates that you can use BPAY. If not, you can visit the BPAY website to confirm if your biller appears on the list of accepted billers.

Credit Cards and Comparing Cash Advances

Rates last updated December 9th, 2016.

ME Bank frank Credit Card

Interest rate changed from 9.99% p.a. to 11.99% p.a. on purchases, balance transfers and cash advanc

September 19th, 2016

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ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
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Where can I find the cash advance fees and charges?

Most credit card issuers will charge both a cash advance fee and cash advance interest rate on any of the transactions listed above. If you want to know what you'll be charged, you can usually find these details in the product disclosure statement or terms and conditions under "fees and charges". If you're still unsure, If you’re still unsure, contact your credit card issuer to confirm what rates and fees apply before choosing a credit card or performing any cash advances.

What else should I consider before conducting a cash advance? 

If you plan on using your credit card for cash advances, pay attention to the following:

  • Will you earn reward points? Typically, you won’t earn reward points for cash advances, unless a credit card comes with some kind of a promotional offer.
  • What are the conditions when travelling overseas? If you’re considering using your credit card your cash advances when travelling overseas, take into account that you could have to pay extra in the form of ATM fees and international transaction fees. There are some cards that offer lower foreign transaction and currency conversion fees.
  • What other options are there? If you don’t need money in a hurry you can consider getting a personal loan, and you can even ask your bank if it can provide a line of credit or an overdraft facility.

Credit cards generally aren’t designed to be used as an ATM card. So if you think that you’ll regularly perform cash advances, you may want to consider another option to avoid accruing high fees. Regardless, make sure to read the terms and conditions before applying to ensure that you’re not confronted with any nasty surprises when you get your hands on the card.

Compare low cash advance rate credit cards

Frequently asked questions

Is there a limit to how much I can get as a cash advance?

Expect your credit card to come with minimum and maximum cash advance limits. The minimum could be around $20, and the maximum would depend on your card’s credit limit and your card issuer’s discretion.

What is cash advance fee?

Your credit card issuer can charge a fixed dollar value or a percentage of each cash advance as cash advance fee. This normally applies on all ATM withdrawals, transfers, and making cash equivalent transactions.

I’ve used my new credit card to make purchases and for cash advances. Can I repay the balance from the cash advance first?

As a general rule, your credit card issuer has to allocate your payments to amounts that attract the highest interest first. Since cash advances attract higher interest than purchases, you can expect your payments to automatically go towards the cash advance balance first.

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18 Responses to What credit card transactions are considered cash advances?

  1. Default Gravatar
    Norman | July 14, 2016

    Is there any form of cash advance fee or other fees associated with a direct debit plan from a credit card, ie for health insurance, telstra bills etc?

    I have traditionally used a debit card for my direct debit plans and did not receive a fee, but recently I got a home loan so i am finding it easier to use the credit card and pay it off prior to my billing period (so i can put all my money into the loan as i don’t have an offset account). So I just wanted to grantee that I would not cop any extra associated fees using a credit card?

    Thanks

    • Staff
      May | July 15, 2016

      Hi Norman,

      Thanks for your question.

      The transaction that can be treated as a “purchase” or a “cash advance” will actually differ from one credit card to another. But usually, if the payment, for instance, for your bills or loan was directly debited by the merchant/company from your card, that will not be considered as a cash advance but rather as a purchase, so no cash advance fees will be charged to your card.

      It may be best to directly contact your merchant on how they charge their bill to your card. An advice from your card company will also help.

      Cheers,
      May

  2. Default Gravatar
    brian | March 13, 2016

    When you pay interest on cash advance how is it treated in future statements?

    Lets say I have $1000 cash advance. It probably has a 1.75% cash advance fee so about $17.50. And one months interest might be around $20.

    Then I make $20 minimum repayment. It goes to highest interest first. So I now have $980 in cash advances. Is the $17.50 and $20 rolled into that amount and charged cash advance rates? Or are interest and fees considered as purchase rate?

    • Staff
      Jonathan | March 14, 2016

      Hi Brian, thanks for your inquiry!

      Since the charges mentioned are under cash advances, your repayment of $20 will go towards the total outstanding cash advance amount. If you make purchases a separate interest amount is charged on the total amount of outstanding purchases. Using your example with a $1000 cash advance and a cash advance interest amount of $17.50, your total cash advance debt is $1017.50. A repayment of $20 will bring the new total to $997.50.

      I hope this helps.

      Cheers,

      Jonathan

  3. Default Gravatar
    Brodie | January 8, 2016

    Do i get stung with a cash advance fee if i transfer money from my account to an online casino account. Or if an online casino transfers my to my account via bank transfer, its the first time I’ve come across this. 6 × in row on my bank statement & $35.99, 6 Times

    • Staff
      Sally | January 8, 2016

      Hi Brodie,

      Thanks for your question.

      Gambling transactions are sometimes considered cash advances, though what is considered a cash advance is often determined by the card issuer. So without knowing which card you’re using, we can’t confirm this for sure. Instead, I would suggest that you contact your issuer directly to confirm whether online casino transactions are considered cash advances.

      I hope this has helped.

      Cheers,

      Sally

    • Default Gravatar
      Brodie | January 8, 2016

      Reply to sally i spoke with banking rep, & she followed up on querie & noticed that they were debit card cash advances times 6, There is no such thing as a debit card cash advance only credit card. Now ive searched right back to july & theres more, ive searched via google on a specific name thats done these unauthorised transactions,a certain page that caught my interest had that specific name linked to these transactions, i go to open it up & my WI FI cuts out, Then my device starts sending me warnings saying my WI FI & private info is under threat to from hackings,, This is totally new to me should i be worried because its under investigation..

    • Staff
      Sally | January 12, 2016

      Hi Brodie,

      Thanks for following this up.

      It’d be best to report these findings with both your credit card issuer and internet issuer to resolve the issue.

      If you’re receive messages that either your credit card or internet connection are under security threats, it’s best to notify your issuers as soon as possible.

      We’re sorry we can’t provide you with further assistance.

      Cheers,

      Sally

  4. Default Gravatar
    Jay | December 16, 2015

    I am about to purchase small car and I have credit card which have current promotion of 15 months 0% interest purchase. Now if I pay car invoice via credit card will that be considered as cash advance?

    • Staff
      Sally | December 18, 2015

      Hi Jay,

      Thanks for your question.

      Invoices aren’t usually considered cash advances. However, you’d do best to contact your issuer to confirm whether they consider invoices cash advances just to be sure.

      I hope this has helped.

      Cheers,

      Sally

  5. Default Gravatar
    cathy | November 19, 2015

    can i use my credit card to pay bond on a rental and is that a cash advance?

    • Staff
      Ally | November 20, 2015

      Hi Cathy,

      Thanks for your inquiry.

      Yes, you can pay a house bond using a credit card, and yes, that would be considered as a cash advance since it is a cash substitute transaction. Please read more through this page for more information about cash advances in credit cards.

      I hope this has helped.

      Cheers,
      Ally

  6. Default Gravatar
    Sher | August 26, 2015

    I was thinking about paying a house bond on eftpos using my credit card. Is that a cash advance? Thanks

    • Staff
      Jonathan | August 27, 2015

      Hi Sher,

      Thanks for your question.
      Yes this would be considered as a cash advance since it is a cash substitute transaction. Please check this page for the important things to consider about cash advances in credit cards.

      I hope this has helped.

      Cheers,

      Jonathan

  7. Default Gravatar
    vickey | April 3, 2015

    I wanted to make a purchase but the seller does not take credit card. I got a loan from Tesco bank to pay the seller but wondered if I could pay the loan off within the cancellation period using an interest free Tesco credit card. That way I can pay the credit card off before the 0% interest runs out. However, if I use a credit card to pay a loan is that classed as a purchase or cash advance?

    • Staff
      Jonathan | April 7, 2015

      Hi Vickey, thanks for your inquiry!

      Generally loans from a bank/ lender cannot be paid off using a credit card from the same bank/ lender. Please see the following link for lenders who support balance transferring a loan to a credit card.

      Cheers,

      Jonathan

  8. Default Gravatar
    Karey | May 15, 2013

    Hi my business processes a lot of online payments via our web stores. We have a Commonwealth merchant account and use a Camtech/Securepay payment gateway. This has been in place for 10 years. In recent months we have had a series of customers complain to us that the MasterCard or visa transactions we have processed have appeared on their statements as cash advances – with additional fees and charges (which we don’t collect – our recipes show just the transaction amount). Camtech advised that the transactions were usual visa and MasterCard ones and that our online terminal could not process cash advances. The customers banks say we are processing the transaction as a cash advance. Given this is sporadic (not all customers) and we have not changed anything at all in the way we process payments – how do we investigate further? I believe the customers banks are gouging them and blaming us. Thank you for your help. Karey

    • Staff
      Jacob | May 15, 2013

      Hi Karey. It sounds like a case of ‘he said she said’. Gather all information and take it to the Financial Ombudsman Service. Their steps for resolving a dispute: contact the financial services provider (which you’ve done) and then take the issue to the ombudsman. I’m sorry there’s little I can contribute towards this. Jacob.

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