If ever there was a way to get into debt fast, it’s by using a credit card to withdraw cash. Certainly, an instant cash advance is a way of getting hold of money in an emergency or when other accounts are empty but the practice is fraught with danger, particularly if you are making a habit of it. Why? Because interest on credit card cash advances is up to 10% higher than your usual card rate, plus that hefty interest is charged straight away, almost as soon as you finish at the ATM. There are no interest-free days for you to repay the cash advance so you can really clock up some debt if you are not careful.
But wait, there’s more! As well as paying the credit card interest rate on a cash advance, consumers are also charged fees. Those fees can be different for Australian and overseas transactions. It’s normal for overseas cash advances to attract fees ranging from $4 to $5 as well as a fee paid to the owner of the ATM used. However, in Australia you can also pay a similar amount in transaction fees for cash advances. It all adds up so beware.