Why Cash Advances Get Expensive

Three costs stack at once — fee, higher APR, no grace period Three costs stack at once — fee, higher APR, no grace period

Cost 1: the upfront fee

A cash advance fee is commonly a percentage of the amount, with a minimum — charged the moment you take the cash. A cash advance fee is commonly a percentage of the amount, with a minimum — charged the moment you take the cash.

Cost 2: a higher APR

Cash advances usually carry a separate APR, often several points above your purchase APR. Cash advances usually carry a separate APR, often several points above your purchase APR.

Cost 3: no grace period

Interest typically starts on the day of the advance — unlike purchases, there is generally no interest-free window. Interest typically starts on the day of the advance — unlike purchases, there is generally no interest-free window.

$500 for 30 days ≈ $47.32

Hypothetical example: a 5% fee ($25) + 30 days at 29.99% APR (about $12.32) + a $10 ATM surcharge = about $47.32 — roughly 9.5% for one month. Hypothetical example: a 5% fee ($25) + 30 days at 29.99% APR (about $12.32) + a $10 ATM surcharge = about $47.32 — roughly 9.5% for one month.

Small advances cost the most

With a hypothetical $10 minimum fee, withdrawing just $100 means the fee alone is 10% of what you borrowed — before any interest. With a hypothetical $10 minimum fee, withdrawing just $100 means the fee alone is 10% of what you borrowed — before any interest.

The same $500 as a purchase: $0

A $500 purchase paid in full within its grace period typically costs no fee and no interest. The gap is the cash advance pricing. A $500 purchase paid in full within its grace period typically costs no fee and no interest. The gap is the cash advance pricing. Read the full guide