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1.4. Cash advances and other charges

Cash advances attract two different charges:

  1. The cash advance fee: 2% to 3% of the total transaction value; and
  2. The cash advance interest rate: Usually between 19.99% p.a. and 22% p.a.

These charges make cash advances the most expensive transactions you can make with a credit card.

Example
If you withdrew $1000 on a credit card with a cash advance fee of 3%, you would be charged $30 straight away. If the card had a cash advance interest rate of 21.99% p.a., this $1030 debt would cost you about $18.60 a month, and up to $223 a year!

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1.4. Cash advances and other charges

As well as cash advances, there are other fees and charges that may be applied to your account in different situations, including:

  • Making a late payment,
  • Going over your credit limit,
  • Requesting an additional statement,
  • Requesting a new card (if yours is lost or stolen); and
  • Making purchases in another currency, when a “foreign transaction fee” is applied.

If you’re not prepared or aware of these fees, you could end up with a balance that’s more than you expected, and a payment that covers less of the debt.