How Much Does a Cash Advance Cost?

Information verified correct on October 21st, 2016
woman withdrawing money on an atm

How much does a cash withdrawal on a credit card cost?

Using your credit card to receive cash can sometimes be hazardous to your wallet. Cash advances cost a pretty penny. It is important to understand the ramifications of using the convenience so you are fully aware of the fees associated with the transaction.

Changes For Your Benefit

Ever since March of 2009 in Australia, ATM owners are required to disclose all of the fees associated with a transaction before the customer is able to finalise it. This is a good thing for the consumer and can also be quite revealing. As a result of the change, consumers only made 280 million withdrawals in 2009. This is compared to 342.2 million withdrawals over the same period in 2008. That is a drop of 18%. Consumers like being told what they are being charged and they are taking action. Such action was shown in the number of bank owned ATM withdrawals. When a customer uses an ATM, there is a $2 fee that is assessed if you use a machine that is not associated with your bank. The only way to avoid this fee is to make withdrawals from a machine that your bank owns. In 2009, a study from the Reserve Bank of Australia showed that there was a 10% increase in customers using their own bank’s ATMs. So, the easiest way to avoid having to pay this $2 fee, customers should only seek out ATMs from their own bank.

How much does my cash advance cost?

Table of fees charged by banks in Australia and Overseas for cash advances

Overseas cash advances – Prepare when you travel

Cash advances could cost more if you’re on a trip abroad and you use a foreign ATM machine. You’re usually charged a fee from your bank in addition to the actual ATM machine fee. This can add up. One way to prepare for this is to take out more cash at one time, thereby making fewer transactions – this can save you a lot of money in fees.

cash advance feesWhy do cash advances cost more?

You should understand how credit card companies set up their distribution of customer payments so you’re fully aware of exactly where your payments are being applied. Prior to July 2012, when customers made a payment on their credit card, the payment was first applied to the balance that carried the lowest interest rate first. This obviously cost customers a lot in interest, because since cash advances are typically charged a much higher rate than purchases, these balances wouldn’t come down until all other balances with lower interests rates were paid in full first.

The introduction of the credit card reforms in 2012 means that has been flipped, so high interest balances are paid first. One way cash advances still do end up costing more is in the fact that unlike a regular purchase, the interest on a cash advance is charged from the day of purchase. In other words there are no interest-free days on a cash advance. This, in addition to the fees you need to pay are just some of the reasons why you should always be careful when getting cash from a credit card.

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Credit Cards Comparison

Rates last updated October 21st, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
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
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $59 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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