• Cash Advance on Credit Cards

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    Cash Advance is a service that banks provide to their credit card holders. Using this service, cardholders can withdraw extra cash from their credit cards at times of need. They can withdraw the money from the ATM or from any branch of their bank. There is a limit to how much people can withdraw using the Cash Advance service. It is generally a percentage of the credit limit or the full credit limit amount.

    There is a difference between charging a bill to credit card and withdrawing money using Cash Advance. When cardholders charge a bill to their credit cards, the transaction is reflected on their monthly credit card statement. If they do not make their credit card bill payment on time, only then they will be charged interest on the overdue amount. The same does not apply to Cash Advances. If cardholders use the cash advance service, they have to pay the interest for every single day, starting from the date they withdrew the money.

    What is Cash Advance Fee?

    When credit cardholders use the Cash Advance service, banks charge certain fees from them. This fee is called the Cash Advance Fee. This fee is a small percentage of the amount withdrawn by the cardholders. For example – if a person takes a cash advance of SGD400 on his or her credit card and the cash advance fee charged by his or her bank is 3 percent. Then, it means that he or she has to pay SGD 12 to receive the money.

    Do’s and Don’ts

    • Use the Cash Advance service only when you really need the money
    • In case of emergency, you can use this service to withdraw extra money. For example – when you are traveling abroad and are suddenly in need of some extra cash
    • Repay the money you have withdrawn using Cash Advance as soon as possible to avoid paying interest daily
    • Before using the Cash Advance service, make sure that you read the fine print carefully
    • Be aware of the fees and charges associated with the Cash Advance service of your bank
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