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.
Low cash advance rate credit cards can be helpful when you urgently need cash and need to withdraw funds at an ATM or via EFTPOS from your credit card. Generally, cash advances should be avoided, as they attract a higher interest rate than the standard variable purchase rate on your credit card.
Low cash advance credit cards are particularly useful to people in need of cash to get them by until the next payday.
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 low cash advance credit cards work:
Low cash advance rate credit cards are simply ordinary credit cards with a lower interest rate for cash advances than the main competition. However, even many of the lowest rates on cash advances are still quite high.
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 pay interest from day one, as cash advance are exempt from the interest free days.
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.
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 best 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 provider but generally speaking they range in the 1.5% to 4% region.
The best 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 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:
Low cash advances and interest free periods: Some low cash advance cards offer a promotional interest free period to give you more leeway in repaying the borrowed money.
If you get favorable payment terms and a longer period to repay your advance you could save a lot of money as even a couple of percent could make a huge difference.
Allocation of payments: Your repayments are directed at the highest interest rate transactions first. So you can rest assured that cash advances are likely to be repaid first.
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:
- What are the interest rates? Make sure you know what you are charged on a cash advance and choose the lowest.
- How much is the cash advance fee? Try to choose a card with no or low fees.
- How much is the annual fee? Look for the card with the lowest fees and charges possible. Obviously there might be a trade off between these three factors mentioned here, but you’ll need to prioritise the differences that will save you the most money with your spending behaviour.
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
Whilst you are certainly not going to find ongoing cash advance rates of 0%, there can be promotional cash advance rates that last for six months or so. These can present great value for customers over that period, as long as they have a plan to resurrect their finances by the time the 0% period ends.
Why you may require a cash transaction:
Even in this day and age, there are situations where you just need cash to make a transaction, such as to pay a bond or to pay back a friend. If you’re really on the spot, sometimes you may have no choice but to turn to your credit card and use a cash advance.
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 the online facility:
You can improve matters by going online as soon as you have the money, and pay 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.
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.
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.
How do you apply for a low cash advance credit card?
Before you apply online for a credit card, 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.
Low cash advance rate credit cards can be applied for by clicking ‘Apply’ on any card on this page. It will take you to an online application. From there, it is usually just a 10 minute application for you to lodge your application. The credit card provider will be in touch with you to notify you of your approval. From there, it is usually a week before you receive your card. You can activate it immediately and start using it for cash advances and purchases.
Frequently Asked Questions:
Can I use my low cash advance rate credit card for purchases?
Yes, but if you carry a balance, your purchases will miss out on any interest free days.
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 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.
Read our cash advance credit card resources to learn how to use cash advances responsibly and save on your interest repayments and fees.
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|HSBC Credit Card||St.George Vertigo Credit Card||ANZ Low Rate Credit Card||NAB Low Rate Credit Card
0% p.a. for 6 months on balance transfers & no annual fee
0% p.a. for 12 months on balance transfers & low annual fee
0% p.a. for 12 months on balance transfers & low annual fee
0% p.a. until 1 July 2014 (thereafter 13.99% p.a.) on purchases
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