Will There Be a Cash Advance Fee?
Disclaimer: This website is monetized by ads and other affiliates. As such, this article may contain affiliate links. If you decide to use them, you can sleep easier knowing you're helping me give my cats a better life. :) I really appreciate your support!
Look through any thread about a manufactured spending technique and I guarantee you’ll see the question, “Will there be a cash advance fee?” Seriously, I dare you. You’ll see what I mean.
Despite the fact that it’s asked over and over, it’s a very valid question. Cash advance fees are killer. On average they cost 2-5% of the amount of “cash” you take out and you don’t earn any points on the “purchase.” It’s a lose-lose. In addition to that, those that carry a balance also have to pay interest on the cash advance (please don’t do that, ever).
So, will you be charged a cash advance for ….? Maybe.
Disclaimer: This post is for informational purposes only. There’s always the chance that a card issuer could change it’s rules and start coding a purchase as a cash advance, so be aware that this information could become outdated. In other words, if for some reason you are charged a cash advance fee, even though I say below that it likely won’t be, don’t get mad! 🙂
What Is a Cash Advance Fee?
A cash advance fee is a fee charged when you receive cash out of your credit card. For example, if you were to go the ATM and withdraw $100 from your credit card, you would be hit with a cash advance fee.
The Fee
The fee can be anywhere from a few dollars to a small percentage of the cash advance. Most of the time it’s something like, “The greater of $5 or 3%.” As an example, let’s say you withdrew $100 out of an ATM. That withdrawal would cost $5 on top of any ATM fees. If you were to withdraw $200, that would be $6 on top of any ATM fees. There’s no point in paying those extra fees when you could just use a debit card to withdraw the cash. It’s all around a bad deal.
What Is Considered a Cash Advance?
Most transactions that take place at a bank or financial institution will be considered a cash advance by your credit card issuer. For instance, ATM withdrawals, bank account loads, cash advances to a bank account (obviously), ect.
So, how do you avoid them?
Unfortunately, there isn’t a guidebook that will tell you which transactions will/won’t code as a cash advance, but you can be prepared for a cash advance by lowering your cash line to $0 on your credit cards.
Cash Advance Line Rules by Bank
Different banks have different rules, and as such every major credit card issuer has a different rule on whether you can lower your cash advance line to $0 or not. Here are the major banks rules:
- Chase: You can lower your cash limit to $0.
- Citi: You can lower your cash limit to $0.
- Fidelity: You can lower your cash limit to $0.
- Barclaycard: You can lower your cash limit to $0
- Bank of America: According to Doctor of Credit, the minimum cash limit is $200.
- US Bank: According to Thomas, your cash limit is 25% of your total credit limit, so it cannot be $0.
- American Express: You can lower your cash limit to $10. However, since your cash limit is linked to your credit limit, your credit limit will go down significantly.
HT: Doctor of Credit
Charge Cards
Charge cards (e.g. Amex Platinum, Amex Gold, Ink Bold), not to be confused with credit cards, do not allow you to carry a balance month to month (not that you should). Because of that, they don’t have credit limits or cash advance line limits. So, if you’re ever on the fence about a purchase and you don’t/can’t lower your cash advance line to $0 on your credit cards, test the purchase with a charge card.
General Rules
These are general rules to cash advances that should be followed during all transactions.
- Store Purchases: These will not be treated as a cash advance if they code as a purchase from a retail store. For example, if you buy something in Target it will always show up as a purchase. If, however, you buy something from Chase inside of a Target, it will most likely show up as a cash advance since it’s a bank.
- Bank Purchases: More often than not, transactions taking place at a bank will code as a cash advance. To be safe, I would suggest using a card with a $0 cash line or a charge card.
MS Method Rules
The following information is from my experience as to whether a manufactured spending method coded as a cash advance or not.
- Loading Serve Online: Most cards post as a purchase when loading Serve online, however, there are a few that post as a cash advance. You can find more information here and on Flyertalk. What bank makes loading Serve online specifically interesting is Chase. There cards take the online load from their respective cash advance lines while the transaction is pending, but, the load will actually post as a purchase. It’s odd.
- Loading REDBird: No card will code as a cash advance when loading REDcard, because it’s a store transaction.
- Loading USBuxx: USBuxx has closed it’s doors to new applicants, but for those that still have it, I’ve loaded mine with Chase cards (charge and credit), Citi cards, and Barclay cards and none of them charged cash advance fees.
- Other Buxx Cards: I haven’t heard reports of the other Buxx cards charging cash advances.
- Gift Card Purchases In-Store: No cash advances if they’re purchased in a store (e.g. Staples, Office Max, CVS, ect.)
- Gift Card Mall: No cash advances in my experience, however, I’ve only used Chase cards.
- Amex Gift Cards: You may be charged a cash advance for this, since the purchase is from a financial institution. Lower your CA lines before purchasing!
- Evolve Money: No cash advance fee from here, but the 3% fee kills it.
Conclusion
There’s no way to guarantee a transaction will be a cash advance or not, since each bank is different and they could change the way they code a transaction at anytime. However, you can take the information above as a guideline to hopefully help you answer the age-old manufactured spending question, “Will there be a cash advance fee?“
