Low Cash Advance Rate Cards

Cash advance rates tend to be high on most credit cards. Unfortunately, some of us are in need of the occasional (or frequent) cash advance, and thus need a card which offers a lower rate on cash.

Fortunately, low cash advance rate credit cards are available in Australia. As of late providers have withdrawn or retired any real low cash advance cards, so you will be hard pressed in finding a cash rate below 15% p.a.

Table of Contents: Low Cash Advance Credit Cards Guide

• 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 is the benefit of having a low cash advance credit card?
• Can I use my low cash advance rate credit card for purchases?
• Why do credit cards feature such a high cash advance rate?
• 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

Best Low Cash Advance Credit Card

With the Bankwest Zero Platinum Credit Card you will never have to pay another annual fee, ever. This card also features an amazingly low 1.99% p.a. for 12 months balance transfer offer.

• $0 annual fee
• 16.99% p.a. on purchases
• 16.99% p.a. on cash advances
• 1.99% p.a. for 9 months on balance transfers
• Winner of Money magazines Best Transactor Credit Card for 2010

Click here to read the Bankwest Zero Platinum MasterCard terms and conditions

Comparison of Cash Advance Credit Cards

Credit Card	Card Details	Interest Rate	Cash Advance Rate	Balance Transfer Rate	Annual fee	Interest free days
HSBC Credit Card	Editor's Choice: Best No Annual Fee Card $0 annual fee for the life of the credit card and a 0% interest balance transfer offer until April 1st 2010.	16.99%	19.99%	5.99% for 6 months	$0	55
Aussie MasterCard	A quality low interest rate credit card which offers a marginally lower cash advance rate than average.	2.99% for 6 months (reverts to 12.29%)	18.79%	2.99% for 6 months	$49	55

How low cash advance credit cards work:

In order to save money if you are in need of a cash advance, you should aim to find and apply for a credit card with a low cash advance rate. If you ignore this warning, chances are you end up paying surplus charges and fees on your monthly credit card statement.

What exactly is a cash advance?

Whenever you use your credit card to access cash you are effectively using a cash advance. This doesn't have to be limited to using your ATM machine only either.

Every time you use your credit card to withdraw cash at the supermarket checkout, or in shops that allow cash back transactions you are drawing a cash advance. Even if you purchase foreign currency, traveller's cheques or make transactions with your credit card while you gamble you could be up for hidden cash advance charges.

Low cash advance credit cards can save you a bit of money but you need to be aware that even they incur interest charges from the moment you draw your 'cash.' Even with a 55 day interest free credit card you still pay cash advance charges because they are not exempt from the interest free period.

What is the difference between cash advances and purchases?

Credit card companies itemise cash advances separately on your statement, therefore you pay different interest rates and fees on a cash advance than you do on a purchase.

The featured APR can be seen as the legal representation of your credit cost, however the APR only covers the purchase rate and not the cash advance rate. The only way you'll know the cash advance rate of your credit card is by reading the small print of your card contract.

How much do cash advances cost me?

Interest rates charged on cash advances vary tremendously between the various credit card providers. What's important is that you know the fact that you pay interest on outstanding cash advances from the moment you withdraw the money until you pay it back. Plus, you'll be charged fees too.

These fees range, again they are dependant of the actual card provider but generally speaking they range in the 2% to 3% region of your transaction. There is also always a minimum charge and if the percentage is too low you will be charged the higher amount - whichever applies.

The best way to avoid these costs is to not use cash advances at all unless you absolutely must.

What is the benefit of low cash advance credit cards?

Low cash advance credit cards offer the consumer several advantages. From the obvious low interest there are other benefits to using these cards too:

Lower cash advance rates and fees: A low cash advance credit card has reduced interest rates on cash advance transactions. The percentages do range and you have to look long and hard to find one below 15%.

Cash handling fees are also lowered with this type of credit card. If you are lucky enough then you might find a lender who scraps the latter for good.

Low cash advances and interest free periods: Some low cash advance cards offer an interest free period to give you more leeway in repaying the borrowed money.

If you get favourable payment terms and a longer period to repay your advance you could save a lot of money as even a couple of per cent could make a huge difference.

For those of you who repay their full credit card balance each months a low cash advance credit card is key to keep those costs down even more, especially if the card allows you to make cash advance transactions during an interest free period.

Allocation of payments: Allocation of payment is a special clause in the terms and conditions. It specifies the order of payments to your account.

Failing to pay attention to this clause can cost you dearly because the credit card company can choose (according to the clause) which of the debts gets cleared first. If they favour the one with the lowest interest then you are up for some serious - and unnecessary charges.

An allocation of payments clause is sometimes offered by low cash advance card providers. It will list cash advance repayments first - in front of purchases and / or balance transfers.

So if you choose a card that applies your payments to cash advances first and you don't repay your full balance each month, at least the most expensive debt is being taken care of.

Can I use my low cash advance rate credit card for purchases?

Most of the time you can since the cards are based on their low interest rates. In the end it depends on your needs. If you use your card mostly for purchases and not to do a cash advance then there are other, cheaper cards on the market.

Why do cash advance credit cards feature such a high cash rate?

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 providers make money even off the most responsible users.

All it takes is one cash advance to incur a $2-$10 withdrawal fee and interest to accrue from the date of withdrawal (interest free days do not apply to any cash advances, on any credit card).

While these credit cards are significantly cheaper on cash, it's only relative. As no cards offer grace periods on cash advances, you can amass a large credit card balance if you lose track of your cash withdrawals.

What should I look for when I choose a low cash advance credit card?

When you research and compare low cash advance credit cards consider the following points:

• Do you repay your credit card balance in full each month? If you do, choose a low cash advance card that includes cash advances in its interest free period.
• Do you usually leave an outstanding balance on your card? If so, select a card with the lowest rates of interest on cash advances. Plus preferably a low rate on purchases.
• Check the interest rates charged on a cash advance and choose the lowest.
• How much is the cash advance handling fee? Try to choose a card with no or low fees.
• Does the interest free period include cash advances? If they do, stay away from these cards. Choose one that includes cash withdrawals (cash advances) in the interest free cycle.
• How are payments allocated? Choose a card that allocates payments to your cash advances before purchases.

Finding the right low cash advance credit card is often the result of education and research. We have done the hard work for you and all you need to do is to choose the right cash advance card for your needs.

How To Compare Low Cash Advance Credit Cards

You may not have thought to compare low cash advance credit cards. Possibly you didn't think such a things exists. Whilst you are certainly not going to find cash advance rates of 0%, as you might with purchase and balance transfer offers, it is possible you may be able to find a credit card with cash advance rates that don't actually squeeze your financial pips 'til they pop.

If you are wondering what we're talking about, you must be one of those people who has never made a cash transaction on their credit card before. A cash transaction using a credit card makes your card provider very happy. You certainly need to have some trepidation when you use your regular credit card in this way. This is because, normally, your cash advance rate is higher than your purchase rate, and you start paying interest the moment the cash leaves the ATM - there are no interest-free days with a cash transaction. Plus, there may be a cash handling fee. In fact, cash transactions can almost turn your credit card provider into a loan shark.

Why you may require a cash transaction:

You leave the house with a little cash and your plastic. You insert your debit card into the ATM and have a mental block. Your PIN has vanished from your head. Rather than cancel the transaction, for some reason you persevere and input wrong numbers until your card is swallowed up and you are advised to contact your branch to get it back; actually, the machine thinks it's a stolen card, and if it could sneer at you it would.

So now if you really need the cash, you have to turn to your credit card. You have used it way to often to forget this particular PIN.

You should also be aware that cash withdrawals from an ATM are not the only definition of a cash transaction. There's also cashback at merchant locations, purchase of foreign currency or traveler's cheques, and, if you're really keen on losing your cash, gambling transactions.

Can you apply for a low cash advance credit card?

You can apply for any credit card, but you may not get it. Before you compare low cash advance credit cards, it is a good idea to check your credit rating. Cards of this sort will require that you have a good credit score, and applying for a card you are unlikely to get will only drop your rating a notch or two. If your credit rating is a little low, you may also want to reconsider whether the whole notion of credit card cash advances is one you want to embrace.

Considerations when you compare low cash advance credit cards:

It's all comparative. Low cash advance rates will never be low, they just might not be as high as you feared. A low cash advance rate would be one at the same rate as your purchases. However, unless the provider is feeling exceptionally generous, they will still incur interest from the day of the transaction, plus a cash handling fee.

The cash advance interest rate:

If your main intention is to compare low cash advance credit cards, you should make certain you know what that rate is. Compare the cash advance rate to the purchase rate to see how close they are. Obviously there can be high regular purchase rates as well, so seeing them on a par is not always a reliable indicator. If regular APRs range from 10% to 20%, the normal cash advance rate would be at the top end of that. The cash advance interest rate may also be referred to as a cash withdrawal or cash transaction.

The cash advance handling fee:

Most credit cards charge a handling fee for cash advances. As you are the only one handling anything - the cash - this is clearly a little money-spinner. A great cash advance credit card would be one that waives this fee, which may be 2% to 3% of the cash transaction amount.

The interest-free period :

This is another thing to watch out for when you compare low cash advance credit cards. Don't be too disappointed if your cash transactions do not benefit from any interest-free days, as your purchases should; this would be very unusual.

The regular purchase rate or APR:

In your quest to seek out the best low rate cash advance credit card, don't forget the more important figure of the regular interest rate on purchases. If you are using your credit card like a normal person, this should be the figure of most concern.

Annual fees:

For the sake of a few percentage points that may barely affect you, you should not be paying a higher than normal annual fee.

The fine print:

Do read this. You'll find it under Terms & Conditions. This will include all you need to know about how the card operates in the real world.

How To Use a Low Cash Advance Credit Card

If you manage to get your hands on a low cash advance credit card, you must pay attention to certain guidelines to use them effectively. Some of these will apply to any credit card; some are specific to a low cash advance credit card.

Firstly, cash advances on a credit card should be approached with caution. Even low rates on a cash transaction will be at least as high a regular purchase rate. They will also charge interest from the day they occur, and will more than likely involve a handling fee. These are not just cash withdrawals from an ATM, but also taking cashback at merchant locations, purchasing foreign currency or traveler's cheques, and gambling transactions.

Points to bear in mind:

Budget to clear your balance:

Make certain you budget properly for your month's transactions, whether they be purchases or cash. Your intention with any credit card should be to avoid leaving an outstanding balance at the end of the month. You should be paying it off in full to keep your interest charges to a minimum.

Use your interest-free period:

The majority of credit cards offer an interest-free period on purchases, provided you start each month with a zero balance. This period will be up to fifty-five days. With a low cash advance credit card, it is unlikely this interest-free period will apply to your cash transactions. If it does, make certain you set your statement balance back to zero for the following month so you can take advantage of it again. If there are no interest-free days on cash transactions, then it is more important then ever to pay off your debt swiftly to minimise the damage.

Use the online facility:

Assuming your low cash advance credit card does not benefit from any interest-free days, you can improve matters by going online as soon as you have the money, and paying off your debt. This means you do not wait for your statement to arrive. Paying off your balance as early as possible cuts down on your interest charges, which are calculated on a per-day basis. Checking your online account also allows you to keep on top of your spending. It is very easy over the course of a month to forget a few transactions, then be horrified when the monthly statement arrives. It is also possible to exceed your credit limit without that watchful eye. You can avoid this by logging on every week.

Just be careful not to get caught by a "phishing" trip. Any email requesting that you click on a link to verify or reactivate your details will not have come from your credit card provider. It will be a bogus site set up to capture your card details for nefarious purposes.

Cash advances abroad:

Even if you have a low cash advance credit card, you will normally find that things are different if you use it abroad, both for purchases and cash transactions. Fees are charged for using a credit card outside its country of issue, or for making Internet transactions in a different currency. Make sure you check the Terms & Conditions to find out what these charges are.

Reward schemes:

Your low cash advance credit card will not earn you any rewards points for cash transactions, just as any balance transfers do not count. It is only purchases that will accumulate points.

Remember that your best bet with cash withdrawals is always to use a debit card if possible. That way you will avoid any interest and fees.

Read our cash advance credit card resources to learn how to use cash advances responsibly and save on your interest repayments and fees.

• What Card Use Is Actually Classed As A Cash Advance?
  

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• Cash Advance Interest Rates: Things you need to know
  

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• It’s Handy To Be Able To Get A Cash Advance Credit Card, But Does It Cost You?
  

  Just about every credit card offers a cash advance feature, allowing you to withdraw cash from your credit card account. The negative to this is that cash advances attract a very high interest rate. Check out our guide telling you all you need to know before doing your next ATM cash advance.



• Ideal Times to Use Cash Advances
  

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• Credit Card Cash Advances
  

  If you’ve done a bit of shopping around and comparing credit cards, you’ll find that while many credit cards have a low purchase rate, most will have a cash advance rate sitting around 20%. Another universal factor of cash advances, is that even if 44/55 interest free days are offered on purchases, interest will accrue from the date of your cash advance. To top it off, cash advances commonly incur higher transaction and withdrawal fees as well.







Editor's Choice: Our Top Credit Cards




Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
St George Vertigo	Editor's Choice: Low Interest Low 2.99% for 6 months (reverts to 11.99%) p.a. interest rate and balance transfer rate, from one of Australia's most respected banks.	2.99% for 6 months (reverts to 11.99%)	20.74%	2.99% for 6 months	$55	55
Coles Group Source MasterCard	The Coles Group Source MasterCard has no annual fee, a 0% p.a. balance transfer offer for 6 months, with a rewards program including savings on fuel and FlyBuys Points	19.74%	21.99%	0% for 6 months	$0	62
Bankwest Zero Platinum MasterCard	Editor's Choice: No Annual Fee Excellent introductory offer with a $0 annual fee for the life of the credit card and a 1.99% p.a. for 9 months on balance transfers	16.99%	16.99%	1.99% for 9 months	$0	55