We are constantly advising less experienced and first time travelers not to use the cash advance feature of your credit card unless it is an extreme emergency. A good reason -- received a notice today that the term of my Chase credit cards was changed. The Cash Advance APR went from 19.49% to 25.24%. A mere 30% increase. A very good reason to make sure your debit card works and you have back up.
Posted by
Seattle, WA
17225 posts
I have never used a cash advance on my credit card, but am curious. When does it start accruing the exorbitant interest? The moment one withdraws the money?
Posted by
OP
Tresana, Highlands Ranch, CO, USA
23546 posts
It is not your money as it is with a debit card. It is the banks money and they are making your a loan. Interest plus other fees kick in the moment you hit the button and the money comes out of the ATM. Now I do carry a credit card with a pin number just as a back up to my two debit cards should both fail. Knock on wood -- I have never had a debit card not work in 20+ years of travel everywhere. Sometimes a card will not work in a particular ATM but always works in the next one.
Posted by
Seattle, WA, USA ☔️
6788 posts
Cash advances with a credit card usually the interest starts at the stroke of midnight on the day you get the cash. It is a VERY expensive way to "borrow" money (the term "loan shark" should come to mind). No sane person would ever do this unless they had no better alternative.
Posted by
Green Bay
20942 posts
Perfect way to give Chase (aka Jamie Dimon) the bum's rush. He really needs that bonus.
Posted by
Windsor, Ontario, Canada
4085 posts
Paying off that interest charge on a credit card cash advance can be aggravating. Yes, the meter starts running the instant the ATM spits out the currency. If you wait until your monthly statement arrives to pay it back, the interest continues to accrue until the payment reaches the bank. That means that your next monthly statement will also contain an interest charge for the time between the date of the monthly statement until the payment is accepted. Pretty close to loan-sharking, in my view. The only way to cut that cost is to carry a surplus in your credit card account that is large enough to cover both the cash advance and all the other charges against the card for the month involved. Or -- use a debit/ATM card instead. Even better, set up chequing accounts at two separate banks so you will have two debit and two credit cards. And never carry them all in the same wallet.
Posted by
Rick Steves' Europe
16895 posts
20 years ago, I used to pre-pay a large amount to my credit card as Southam describes, to get around the fact that I'd be gone more than a month. In this modern age, you can go online and pay off the credit card balance as soon as possible.