Cash Advance Fee Warning for Credit Card Users
Written by: Emma Lunn
Credit card users can be caught off guard by high fees because they don’t understand what transactions are classified as “cash advances,” according to Totally Money.
A cash advance fee is added to any cash transaction on a credit card. But that’s not just limited to cash withdrawals – there are other transactions categorized as cash as well.
The 2019 Annual Financial Awareness Survey, conducted by OnePoll and commissioned by TotallyMoney, found that most people don’t know that buying lottery tickets, fantasy football entrance fees, and redeeming foreign currencies all trigger a cash advance fee.
How much are the cash advance fees?
A cash advance fee is charged as a percentage of the amount spent on the card or as a lump sum. For example, 3% or Â£ 3 per cash transaction, whichever is greater. For small purchases, the charges might be higher than the item itself.
For example, a lottery ticket costing Â£ 2 might incur a cash advance fee of Â£ 3, which means the fee is 150% higher than the ticket itself. This is before all interest is added.
Interest charges on credit card cash advances generally apply from the time the transaction takes place, rather than having up to 58 days before interest is charged. . Cash advance transactions are also generally excluded from any 0% interest offer, leaving customers with even more to pay.
Alastair Douglas, CEO of Credit Experts TotallyMoney, said: âIf customers aren’t aware of the cash advance fee, they can use their credit card just like a debit card. In some cases, people may not realize that fees or interest are being added until they verify their statement.
âKnowing your fees allows customers to make profitable decisions when making purchases. If you’re applying for a credit card, find out how much the cash advance fee is.