Using Cash Advances To Your Advantage

Information verified correct on October 27th, 2016
Get a cash advance only as a last resort and when there is an emergency. Cash advances will cost you more because of high interest rates, especially when the transaction is done abroad. Get a cash advance only as a last resort and when there is an emergency. Cash advances will cost you more because of high interest rates, especially when the transaction is done abroad.

Using a credit card to get cash advances is usually a very costly transaction.

You are much better off using your credit card to make the purchase at the point-of-sale than by taking money out of an ATM with the card. There may be times, however, when you need cash and have to rely on your credit to get it. In these cases, there are some things you can do to keep the price lower and not end up paying ridiculous interest rates on the cash advance balance.

      • Credit card cash advances

        If you find that your credit card usage involves withdrawing money from ATMs quite often, you have a few choices. The first one is to look for a credit card that has a low interest rate on cash advances. These cards are rare and the interest rate is still typically considered high. However some are better than others and with a little work you can track them down. You may end up paying a higher interest rate on your purchases, however, so make sure that you take a good look at all the credit card features before submitting an application for one.

      • Use a debit card

        This is a much better option for withdrawing cash since you will not have to pay a fee if you take the money from a bank machine that is associated with the bank you deal with. There will be no interest to pay since debit cards don’t offer any kind of credit and you will be able to stay within your budget. Of course, if a situation arises and you need money immediately that simply is not available in your account, you may have to use your credit card to get some instant funds.

      • Avoid cash advances overseas

        If you’re travelling abroad, you should avoid using your credit card for any cash advances. Not only will you have to pay the high fee associated with a cash advance but other fees as well. Don’t count on your credit card for cash while you are on a vacation since it simply is not worth the extra money you will have to pay.

      • Avoiding interest

        There is no grace period on cash advances so this means that the interest is applied immediately every time you withdraw money using your credit card. This interest rate is usually different from the purchase rate. If you have a low interest rate credit card, it does not mean that the interest rate is low on cash advances. It usually means that you will pay a low rate on your purchases only.

If you have found yourself in a situation where you did have to make a cash advance, the ideal thing you can do is make payments to your card every time you can. Don’t wait for your statement to come in since interest is accumulating daily. The sooner you can pay off this cash advance, the better off you will be.

You should also keep in mind that there are other transactions that are considered a cash advance. These include purchasing traveller’s checks, getting cash back at shops, any purchases that are made at gambling establishments, and foreign exchanges.

Use cash advances cautiously and pay back the money owed on them as quickly as you can. Cash advances made with a credit card should only be done in an emergency situation when a debit card is out of the question.

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2 Responses to Using Cash Advances To Your Advantage

  1. Default Gravatar
    Paul | October 19, 2014

    I am a holder of a HSBC platinum card issued in Malaysia.
    I am in Adelaide Australia. Is it possible to do a cash advance at the teller counter of the bank? (Not the ATM machine)

    • Staff
      Elizabeth | October 20, 2014

      Hi Paul,

      Thanks for your question.

      You will be able to do a cash advance over the counter at an HSBC branch, you just need to keep in mind the fees that you will be charged for doing so.

      I hope this has helped.



Credit Cards Comparison

Rates last updated October 27th, 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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