Cash Advance

What is a Cash Advance?

A Cash Advance is the term used to describe using your credit card to withdraw cash either across the counter at bank branches, or through cash machines. They are often subject to a handling fee of around 2% in addition to your usual interest rate.

Cash advances usually also start to accrue interest from the date of the transaction, rather than the statement date as for normal purchases. Most lenders also charge higher interest rates for cash advances than they do for ordinary card purchases.

Some banks allocate any payments you make to lower interest rate purchases first and continue to charge for cash advances until the total balance on the credit card is paid in full.

The term ‘Cash Advance’ can also be used to describe a Payday Loan – a small short term loan of several weeks designed to tide individuals over until their next payday. These loans typically carry an extremely high interest rate and these days have to be strictly regulated to protect consumers.


Q: Will a Cash Advance hurt my credit rating?

A: A cash advance taken out on a credit card will not affect your credit rating on its own, but it will contribute to your credit utilisation ratio. Otherwise the only other way it can impact your score is if you struggle to make the payments for your regular credit card outgoings with the addition of a cash advance.

Q: Is there a minimum withdrawal limit?

A: This will vary from card provider to card provider, but generally, there will be both a minimum and maximum withdrawal amount. If you are unsure, check with your card lender before attempting to withdraw funds.

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