Cash advances laden with high interest rates, No grace period

Flat rates, upfront fees dominate cash advance landscape

AUSTIN, TX (May 18, 2017) — Credit card cash advances are a costly way to borrow money, according to a new survey of 100 cards’ cash advance terms. The average cash advance APR is 23.68%, much higher than the average purchase APR of 15.79%. Furthermore, none of the cards offer a grace period for cash advance transactions like they do for traditional credit card purchases, meaning borrowers instantly start accruing interest.

For example, if someone purchases a $1,000 item on a credit card with a 15.79% rate and pays it off in 30 days, they’ll pay no interest thanks to the grace period. But, a $1,000 cash advance under the typical terms found in the survey will cost an extra $69.73. That includes the $50 upfront fee, plus $19.73 for 30 days’ interest at 23.68%.

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Cash advances are not just ATM and convenience check transactions, either. Consumers should note that wire transfers, money orders, legal gambling purchases and bail bonds are often treated as cash advances if paid via credit card. Additionally, if you hold a checking account with the same bank that issues your credit card, overdraft coverage that comes from your credit card may also be considered a cash advance.

Paying off a cash advance can prove to be problematic for those making just the minimum payment. Generally, card issuers will first apply the minimum payment to lower APR balances before payments made in excess of that go to balances with higher APRs.

“If a cash advance is the best of a bunch of bad options, be sure to pay it off as quickly as possible making more than the minimum payment, since interest starts building up the moment you access the cash,” said Matt Schulz,’s senior industry analyst. “This can wind up costing you hundreds of dollars if you’re not mindful.”

Unlike typical credit card interest rates, most cash advances have a flat APR irrespective of the individual cardholder’s creditworthiness. Among the cards surveyed, those with the highest cash advance APRs are the First Premier Bank credit card (36.0%), BP Visa (29.99%), Texaco Visa (29.99%), ExxonMobil SmartCard (29.99%) and Shell Platinum Mastercard (28.49%).

High APRs are not the only concern for cardholders who use credit to access cash. Only one card in the survey (Pentagon Federal Credit Union Promise Visa) does not charge a fee for cash advances, which is typically $10 or 5% of each advance, whichever is greater.

The one thing cash advance borrowers can’t rack up: credit card rewards. Cash advances also cannot be used to directly pay off any card balances or loans held by the same bank.


The Credit Card Cash Advance Survey of 100 U.S. credit cards was conducted in April 2017 by The 100-card survey pool is the same group of cards used to calculate’s Weekly Rate Report, and is a representative sampling of cards from all major U.S. card issuers. Information was gathered from the cards’ terms and conditions documents, any publicly available cardholder agreements and phone calls to issuers.

The average cash advance APR was determined using the rates provided by 80 cards, excluding 20 cards that set individual cardholder’s cash advance rates based on creditworthiness and purchase APR. For the cards with a range of cash advance rates based on cardholder creditworthiness, the lowest possible APR was used in the average rate calculation.

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