A credit card cash advance is the costliest way to use your card. You pay a fee up front, usually 5%, and interest builds from day one, often at a higher rate than purchases. Money orders and some person-to-person transfers can count too, so keep your credit card out of anything that works like cash.
Take $500 from an ATM with a typical card and you pay $25 on the spot, plus any fee the ATM’s owner adds, then more than $12 in interest if you repay it 30 days later. Most major issuers charge 5% or $10, whichever is more, and 30% a year is the most common cash advance rate, a 2024 Consumer Financial Protection Bureau (CFPB) review of their card agreements found.
Spend that $500 on a purchase instead and it costs no interest if you pay your full balance by the due date, because most cards give purchases a grace period. Cash advances don’t get one, and the checks your issuer mails you usually don’t either.
Your card agreement defines what counts as a cash advance, and the list runs well past ATMs. Chase’s, for example, includes money orders, wire transfers, cryptocurrency, lottery tickets, casino chips, person-to-person transfers, and bill payments made through a third-party service. With a $10 minimum fee, a $20 transfer treated as an advance costs $10 just to send.
Look up your card’s agreement on the issuer’s website or in the CFPB’s credit card agreement database. Check its rates and fees table for the cash advance fee and rate, then its definition of a cash advance for the full list of what counts.
When you’re short on cash, try these first:
- Use your debit card at your own bank’s ATM, which usually costs nothing.
- Ask a credit union for a small loan. Even a payday alternative loan, the highest-rate loan a federal credit union may make, can’t exceed a 28% annual rate or a $20 application fee.
- Ask the biller for a payment plan or a later due date.
Your issuer can apply the minimum payment to your cheapest balance, but federal rules send every dollar above it to your highest-rate balance first, usually the advance. If you’ve already taken one, pay well over the minimum until it’s gone.
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