Cash advances don’t come cheap. They’re often subject to a higher interest rate than purchases on your credit cards. With interest rates often nearing or exceeding 20%, you probably don’t hit an ATM all that frequently with your credit card.

The interest rate charged for the cash advance is pretty obviously a drawback. Did you know that you can find yourself stuck with more interest in another way too, just by taking out a cash advance? You can.

The problem is with your interest free days. You know how it works — you have a certain grace period after making purchases (such as up to 55 days). Your purchases won’t start accruing interest until after that period, and if you pay off the balance in full during that time you can get away without owing any interest at all.

Sounds good, right? The problem is that your entire balance has to be paid off — not just your purchases. That includes cash advances.

How Cash Advances Lead to Higher Interest

Let’s say you have a credit card offering up to 55 interest free days, like the St. George Vertigo credit card. In this case you have an 11.49% APR on purchases and an interest rate of 19.99% on cash advances.

You’re religious about paying off your purchases in full every month to avoid interest. You’ve already made your typical monthly purchases on your credit card, but then something happens. You need a quick influx of cash to cover an emergency expense. You get a cash advance.

Cash advances aren’t covered by interest free days. That means you’ll immediately begin to accrue interest on the cash advance at the 19.99% rate. You also won’t be able to pay the cash advance back in full this month in addition to paying off your purchases. You’re going to be left with a balance on your credit card.

Because interest free days generally only apply when your entire balance is paid off during the previous statement period (including cash advances and balance transfers) you’ll lose your usual interest free days on purchases. You’ll have to pay interest on whatever balance is left — interest you wouldn’t typically have to pay, all because you took out a cash advance. In other words, your cash advances can affect how you pay off purchases.

As if that isn’t bad enough, you might find yourself paying the higher of the two interest rates on your remaining balance, even if you intended to pay off the cash advance first. It isn’t your choice to make. Check with your credit card company and review your terms and conditions thoroughly. In many cases the credit card company notes that payments will apply to the balance with the lowest interest rate first. Why? Because then you’re left with the higher interest rate for as long as possible. You pay more money. They make more money.

If you want to avoid at least some of these issues with credit card cash advances, look for a card that offers the same interest rate for purchases and cash advances (like the American Express Gold Ascent credit card). They still probably won’t be eligible for interest free days, but at least you’ll always know how much interest is being charged and you won’t have to worry about which portion of your balance your payments are being applied to first.