Withdraw cash from your credit card without incurring high cash advance fees. Compare low cash advance rate credit cards here.
If you do end up getting a cash advance using a low cash advance rate card, you’ll benefit from repaying the borrowed amount as soon as possible.
Comparison of cash advance credit cards
- Compare low cash advance credit cards
- Which is the best* low cash advance credit card?
- How do cash advance credit cards work?
- What is a cash advance?
- What is the difference between cash advances and purchases?
- How much do cash advances cost me?
- What are the benefits of having a low cash advance credit card?
- What should I look for when I choose a low cash advance credit card?
- How to compare low cash advance credit cards
- How to use low cash advance credit cards
How do low cash advance credit cards work?
Low cash advance rate credit cards are similar to conventional credit card though, as the name suggests, they charge a lower interest on cash advances. While they generally charge lower interest on cash advances when compared to most of their competitors, even the lowest cash advance rates currently on offer aren’t particularly low.
What exactly is a cash advance?
A cash advance is when you use your credit card to access money. Withdrawing money from an ATM using your credit card is one example of a cash advance, and you can also get cash advances at supermarket checkouts and stores that allow cash back transactions. Using your credit card to buy foreign currency also qualifies as a cash advance, and the same applies to buying travellers cheques. Using your credit card at gambling tables could also account for cash advances.
While a low cash advance rate card can help you save some money in the form of interest, it is important you know that cash advances start incurring interest from the moment you withdraw the money, and interest free days never apply on cash advances.
What is the difference between cash advances and purchases?
While a cash advance refers to you using your credit card to access money, purchases refer to instances when you use your credit card to pay for products and services. Most credit cards charge different purchase and cash advance rates, and cash advance rates are typically higher.
How much do cash advances cost me?
Interest rates charged on cash advances vary a bit, but they are generally pretty expensive even in the ideal case scenarios.
Cash advance fees apply on all cash advances. They are usually the higher of a couple of dollar fee or a set percentage of the value of the total transaction. These fees range, again they are dependent of the actual card issuer but generally speaking they range in the 1.5% to 4% region.
The easiest way to avoid these costs is to not use cash advances at all unless you absolutely must.
What are the benefits of low cash advance rate cards?
Low cash advance rate credit cards, apart from the obvious low cash advance rate benefit, can offer more and here’s what you can expect:
- Allocation of payments. When you make payments towards your credit card, your card issuer directs the payment towards the highest interest rate transaction first, so you can be certain that your payments work in repaying the cash advance first.
- Promotional offers. Certain such cards come with promotional interest free periods, giving you the ability to save in the form of interest. Longer repayment periods and favourable payment terms can lead to noticeable savings, given that even a seemingly trivial difference in percentage can translate into a considerable dollar value.
- Easy access to funds. Since these cards are conventional credit cards,you can look forward to using them in-store, online, and over the phone. If your card comes with a Visa or MasterCard affiliation, you can use it just about anywhere in the world.
How to compare low cash advance credit cards
Not all low cash advance rate credit cards are the same, so when you consider applying for one, take some time to compare the following aspects:
- Interest rate. Take a look at the cash advance rate you have to pay, and remember that the purchase rate is not the same as the cash advance rate. Look for a low cash advance rate, but don’t ignore the purchase rate.
- Cash advance fee. You might have to pay a percentage of the cash advance amount or a fixed percentage as a cash advance fee, and this fee can vary from one card to the next.
- Annual fee. A typical no-frills card charges little to no annual fees, but you can’t expect much from a card like this in terms of features. As the features begin to add up, you can expect to pay higher annual fees.
- Will you be able to pay it off by the end of the promotional period? If you’re getting a card because of its promotional interest rate offering, establish if you’ll be able to repay the money by the end of this period, because if you don’t you could have to start paying considerably high interest on any outstanding balance once the promotional period ends. The longer the promotional period, the longer you get to repay the money you owe.
What else should I bear in mind?
Using a credit card for a cash advance is not on the top of most people’s list, but there are instances when you may have no other option. If you end up getting a cash advance using your credit card, keep the following in mind:
- Budget to clear balances. The smartest way to use credit cards is to ensure that your budget allows you to pay your outstanding balances in full each month. By doing this, you pay as little as possible in the form of interest.
- Use online platforms. When you use your card for a cash advance, you should not wait for the statement to make your payment, especially if you have access to the required funds before then. This is because interest on cash advances starts building up from day one. As soon as you have the money, make an online payment so interest stops adding up. You can also use your card issuer’s online platform to keep track of your expenses, so you don’t have to deal with surprises at the end of the month.
- Overseas cash advances. Apart from paying interest on cash advances, when you use your card for cash advances outside Australia you could have to pay ATM fees as well as international transaction fees. International transaction fees can also apply when you use your card to make purchases through international websites.
- Rewards. If your credit card comes linked to a rewards program know that cash advances don’t earn any reward points, as is also the case with transferred balances.
How do I apply for a low cash advance credit card?
Applying for a low cash advance rate card is not difficult, and most credit card issuers give you the ability to apply online. To apply, you can click on the ‘Go to Site’ button next to the card you wish to get. Before you do, keep in mind you have to meet certain eligibility criteria, as mentioned below:
- You should be over 18 years of age
- You should be a permanent resident of Australia or an Australian citizen
- You should have good credit rating
Applying requires you to part with a variety of information, which often includes the following:
- Your name, date of birth, marital status, and number of dependents
- Your residential status, home address, email address, and phone number
- Your employer’s name and contact details
- Details about your income, expenditure, assets, and liabilities
Frequently asked questions
Why do cash advances attract high interest rates?
People tend to use their credit cards primarily for purchases, and this is why most credit card issuers promote their purchase rates, and not cash advance rates. Cash advance rates are typically higher than purchase rates mainly because of the reduced competition in this realm.
Do I have to repay a cash advance within a given time period?
You can continue making minimum monthly payments until you clear the balance completely, but by doing so you would end up paying a tidy sum as interest. With cash advances, you should try to repay the entire amount due as soon as possible to save on interest.
What other options do I have to get money in a hurry?
You can consider getting a secured or unsecured personal loan – both tend to charge lower interest rates when compared to credit cards. Just how quickly you get access to funds depends on the loan issuer.
The most popular use of credit cards is ultimately, using them for purchases. Banks therefore tend to only promote the ‘purchase’ rate, usually leaving the much higher cash advance rate hidden in the terms & conditions. Cash advances are where financial issuers can charge a bit more because there is less competition for cash advance interest rates.
All it takes is one cash advance to incur a $2-$10 withdrawal fee.