Types of Credit Card Cash Advances

You already know that credit card cash advances can be a bad deal for you as a consumer. They generally come with very high interest rates, up front fees, and no interest free days like your purchases might. But do you really know what counts as a cash advance?

To make sure you don’t unexpectedly get stuck paying these high interest rates and fees, you have to know what types of transactions might be subject to them. Here are some different types of cash advance transactions you might come across.

ATM Withdrawals

This is the most basic type of credit card cash advance. It’s when you use your credit card to withdraw cash from an ATM — just like a debit card or other ATM card tied to your bank accounts.

Cash Advance Cheques

If you want a larger amount of cash than you can get from an ATM transaction, you might also be able to get a cash advance cheque from your card’s issuing bank. They send you the cheque, and you can deposit it in your account and use it like you would use any other cash in your account.

Over-the-Counter Cash Advances

Another option is to take out cash against your credit card’s limit by visiting the issuing bank. You should be able to get cash from them by presenting your card. This can be another good option if you want more cash than you can take out in a single ATM transaction.

Cash-Equivalent Transactions

There are also cash advance transactions that might catch you more by surprise. You might not even see any physical cash in the process. For example, some credit card companies will treat certain over-the-counter bill payments as cash advances. And if you use your card to purchase things that operate like cash (such as traveller’s cheques), you can also pay more for those. These cash-equivalent transactions can vary a bit between issuers, so look at your cardholder agreement to see what qualifies.

How often do you make cash advance transactions using your credit card? What kinds? Do you ever feel like those transactions are worthwhile, or do you try to avoid them to save money on interest and fees? Share your thoughts in the comments below.

About the author

Roland Bleyer

Roland has years of experience in the financial industry and is the founder of the Credit World group. He has overseen Credit World grow to become the number one reseller of retail banking products. He is a regular contributor to this blog and and aims to help people make the most of their money and help the consumer find the best possible product. Roland dedicates his time writing finance articles to provide people with information they need. You can find him on Google+ & twitter