What is a Credit Card Cash Advance Fee ?
The credit card issuer won’t do you any favors by allowing you to take out a cash advance. You can do this through an ATM or via convenience checks sent in your mail. You’ll be charged a fee every time you request a cash advance to your credit limit. This fee is in addition to the interest you pay starting the day you take out the cash advance.
A cash advance is one of the transactions that you can make with your credit card. A credit card cash advance can be compared to withdrawing cash at an ATM with your debit card. However, a cash advance from your credit card borrows cash from your credit limit and not your checking account. You must repay the money you borrowed from your credit card when you take out an advance.
What is the Credit Card Cash Advance Fee?
The fee will depend on how much you have advanced and what method your credit card issuer used to calculate it.
Credit card issuers typically charge either a flat fee or a percentage of the cash advances amount. A typical fee is either $10 or 5%. If you take out a $100 cash advance, the fee will be $10. The 5% fee for $100 is $5. Your cash advance fee for a $500 cash advance would be $25.
Cash equivalent transactions can be made with some credit cards. Some cards will charge a fee. These transactions are considered cash equivalent transactions even though they aren’t cash withdrawals from an ATM.
You will be charged a fee, for example, if your credit card is used to purchase overdraft protection, place money on a money order or reloadable gift cards, buy lottery tickets, send money to someone else, and so forth. Cash equivalent transactions can have a different fee than the regular fee.
The credit card issuer must disclose how it calculates your fee.
Contact your credit card customer service department if you have any questions regarding your fee. You will be able to understand how the fee is calculated before taking out a cash advance.
Are You Able To avoid Fee?
Avoid cash advances or cash equivalent transactions with your credit card to avoid paying a fee. You can reduce the amount of cash you withdraw from your credit card if you can prevent the transaction entirely. Paying your cash advance back promptly will reduce the cash advance cost because interest begins accruing immediately on cash advances.
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My Name is Jay has and I have a passion for financial writing. I am the chief writer on this blog. I do my best to verify all the information but if there is anything amiss please let me know and I will do my best to correct it.