A credit card cash advance can feel like a quick fix when money is tight. But that convenience usually comes with higher fees and interest than many people expect.
The reality is that credit card cash advances are among the costliest ways to borrow. Between upfront fees, higher interest rates, and interest that starts right away, the cost adds up fast.
Key Points:
- Credit card cash advances are one of the most expensive borrowing options, combining upfront fees, higher interest rates, and interest that starts immediately.
- Many transactions trigger cash advance fees without involving cash, including convenience cheques, money orders, gambling transactions, and some prepaid or digital purchases.
- Fees and interest add up quickly, especially for ATM withdrawals and international transactions, making even short-term advances very expensive.
- Lower-cost alternatives are available, such as personal lines of credit, overdraft protection, or small interest-free advances, which can reduce borrowing costs significantly.
What Is A Credit Card Cash Advance Fee?
A credit card cash advance fee is a charge applied when you use your credit card to access cash instead of making a regular purchase.
This fee is most commonly charged when you withdraw cash from an ATM using your credit card, but it can also apply to several other types of transactions that card issuers treat as cash equivalents.
When a cash advance fee is triggered, it’s charged immediately and added to your credit card balance.
Unlike regular purchases, cash advances usually don’t come with a grace period, meaning interest starts accruing right away.
Other Types Of Purchases Considered Cash Advances
Many cardholders are surprised to learn that certain transactions are considered as cash advances, even though no physical cash may be involved.
Convenience Cheques
Convenience cheques are special cheques issued by your credit card provider. When you write one to yourself or a third party, the amount is treated as a cash advance. That means the cash advance fee applies, and interest begins building immediately.
Money Orders & Wire Transfers
Purchasing money orders, or sending wire transfers using a credit card, are often classified as a cash advance. These transactions are considered cash-like because they can easily be converted into cash, or used as a cash substitute.
Gambling & Betting Transactions
Casino chips, lottery tickets, online betting deposits, and other gambling-related purchases are commonly treated as cash advances by most banks. Even if the transaction happens online, it may still trigger the higher interest rate and cash advance fee associated with a cash advance.
Other Cash-Like Transactions
Depending on the card issuer, transactions such as purchasing certain prepaid cards, cryptocurrency, foreign currency, or funding some peer-to-peer payment services can also be classified as a cash advance.
| Pro Tip: Because policies vary by bank and card type, it’s always a good idea to check your card’s terms and conditions before assuming any given transaction will be treated as a regular purchase. |
Learn more: What Is A Credit Card Cash Advance In Canada?
How Much Is A Credit Card Cash Advance Fee?
Credit card cash advance fees in Canada are usually charged in one of two ways (whichever is higher):
- As a flat fee
- A percentage of the amount withdrawn
The fee is added to your balance immediately, on top of interest that starts accruing right away.
| For most Canadian credit cards, the cash advance fee typically ranges from $5 to $10 per transaction, or 2% to 3% of the cash advance amount. This means withdrawing a larger amount can significantly increase the associated fee. |
It’s also important to note that international cash advances often cost more than a standard domestic cash advance. When you withdraw cash outside Canada, you may be charged:
- A higher cash advance fee
- Foreign ATM fees
- Foreign exchange conversion fees
These extra charges can stack up quickly, making international cash advances extremely expensive.
| Pro Tip: Because fees vary by card type and account agreement, cardholders should always check their specific cardholder agreement for exact terms. |
Credit Card Cash Advance Fees At Major Canadian Banks
Here’s a look at the typical cash advance fees charged by Canada’s big banks. Fees may vary by card and are subject to change.
| Bank | Cash Advance Fee (Canada) |
| TD | $10 or 5% (whichever is greater) |
| RBC | $3.50 to $5.00 or 3-5% |
| Scotiabank | $5 or 3% |
| BMO | $10 or 5% |
| CIBC | $5 |
| National Bank | $10 or 3%-5% |
| Note: These are common fee structures, not guaranteed rates. Premium cards, co-branded cards, and older accounts may have different fees. |
Don’t Forget About The Interest
When you take a cash advance on your credit card, interest starts accruing immediately, which is one of the biggest reasons this type of borrowing gets expensive fast.
Unlike regular credit card purchases, cash advances do not come with a grace period. With purchases, you can usually avoid interest by paying your balance in full by the due date on your credit card.
With cash advances, however, interest begins accumulating the same day you withdraw the cash.
Cash advances also come with higher interest rates than standard purchases. While a typical purchase APR might sit in the 19%–22% range, cash advance interest rates are often several percentage points higher.
Learn more: How To Calculate Credit Card Interest
Don’t Forget About The ATM Fees
In addition to the cash advance fee and interest, you could also be charged an ATM withdrawal fee when you take out cash with your credit card.
This fee is set by the ATM owner, not your credit card issuer, and typically ranges from $2 to $5 per transaction in Canada. Using an out-of-network or international ATM is likely to result in higher withdrawal fees.
How To Calculate The Cost Of A Credit Card Cash Advance
Let’s say you withdraw $500 from an ATM using your credit card, and repay it in full after one month, with a cash advance interest rate of 22% annually.
| Here’s what the cost might look like: – Cash advance fee: 3% of $500 = $15 – ATM fee: $3 – One month of interest on $500 at 22% ≈ $9 Total cost after one month: $15 (fee) + $3 (ATM fee) + $9 (interest) = $27 |
Based on the above example, that means borrowing $500 for just one month could cost you close to $30, and that’s assuming you can repay the full balance quickly.
Credit Card Cash Advance Vs. Credit Card Purchases
Cash advances differ from regular credit card purchases in a few key ways.
- No Grace Period: First of all, with regular purchases, you typically get a grace period during which no interest is charged if you pay your balance in full by the due date. Cash advances don’t offer this grace period.
- Higher Rates: As mentioned, cash advances also come with higher interest rates than regular purchases, and include a separate upfront fee. In addition, payments you make towards your balance may be applied to your lower-interest balance first, allowing the cash advance balance to potentially continue accruing interest, especially if you’re just meeting the minimum payment.
Because of these differences, cash advances are best reserved for emergencies and when there are no cheaper options are available.
When Do You Need To Pay Back Your Cash Advance?
A cash advance is repaid through your regular credit card payments. Your next monthly statement will show the cash advance amount, along with any fees and interest that have accrued. There isn’t a separate due date for the cash advance itself, as it becomes part of your overall credit card balance.
What’s important to understand here is how payments are applied. Cash advances are tracked separately from purchases or balance transfers, and they usually carry the highest interest rate on your account.
To pay down a cash advance effectively, you generally need to pay more than the minimum amount due. When your payment exceeds the minimum, card issuers typically apply the extra amount to balances with the highest interest rates first, which helps reduce the cash advance balance and limits ongoing interest charges.
If you’ve taken a cash advance, making larger or more frequent payments can help clear it faster and reduce the total cost.
Looking for the best credit card options?
Alternatives To Credit Card Cash Advances
Because credit card cash advances are costly, it’s often worth exploring other options first, especially if you only need a small amount or expect to repay it quickly.
0% Interest Lines Of Credit
A personal line of credit can be one of the cheapest ways to access cash versus a cash advance.
Some lenders offer promotional 0% or low introductory rates, which can significantly reduce borrowing costs compared to a credit card cash advance. Lines of credit typically don’t charge upfront withdrawal fees, and interest rates are often much lower than cash advance APRs.
Here are a couple of options to consider:
| Nyble | Nyble offers small credit lines of up to $250 with no interest and no credit checks. Plus, Nyble reports on‑time repayments to help improve your credit profile. |
| MoneyUp | MoneyUp offers an interest-free credit line of up to $1,000 to help users build credit through structured repayment plans and responsible borrowing habits. |
Small Interest-Free Cash Advances
Some financial tools offer small, short-term advances without charging interest. Options like Bree and KOHO Cover offer small advances designed to bridge short gaps between paydays.
Instead of charging high interest, they usually rely on flat fees or subscriptions. When used sparingly and repaid quickly, these can be less expensive than a credit card cash advance.
| Bree | Bree provides quick cash advances of up to $750 to help cover expenses between paycheques. It doesn’t require a credit check and charges no interest. |
| KOHO Cover | KOHO Cover is a subscription feature that gives KOHO users access to small, interest-free cash advances of up to $250 to help cover short-term expenses. |
Overdraft Protection
Overdraft protection allows transactions to go through even when your chequing account balance is low. While fees apply, they’re often much lower than the combined cost of a cash advance fee plus the interest. This can be a cheaper short-term option for covering smaller expenses.
How To Minimize Or Avoid Cash Advance Fees
The easiest way to avoid cash advance fees is to plan ahead and use your credit carefully. Building a small emergency savings, or using lower-cost borrowing options, can reduce your reliance on expensive options like a cash advance.
If you do decide to take a cash advance, paying it back as quickly as possible will help limit interest accumulation. If possible, paying more than the minimum amount on your balance can significantly reduce total costs.
It’s also worth checking in with your bank, as some premium credit cards or long-standing customer relationships may qualify for reduced fees or occasional fee waivers, which can help soften the impact if a cash advance is necessary.
Final Thoughts
Credit card cash advances offer fast access to cash, but they come with high fees and immediate interest.
If you do use one, paying it back as quickly as possible can help limit the total cost, and avoid long-term debt. In many cases, lower-cost alternatives can be worth exploring before turning to a cash advance.
