What Is a Cash Advance Fee on a Credit Card?

A cash advance fee is the extra charge your credit card issuer adds when you use your credit card to get cash (like at an ATM or bank) or do certain cash like transactions.

It is usually a flat fee (often around $5 in Canada) or a percentage of the amount (commonly 3%–5%, sometimes with a minimum like $10).

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Why Cash Advances Cost So Much

A cash advance can be expensive for two reasons:

• You pay the cash advance fee

• Interest starts right away, often at a higher interest rate than regular purchases, and there is usually no interest-free grace period

This is why people are surprised when they still get charged interest even if they pay their credit card bill on time.

How Much Is a Cash Advance Fee?

It depends on the card, but common setups include:

• Flat fee: around $5 per cash advance in Canada (some cards use a flat amount like this)

• Percent fee: often 3%–5% of the amount, sometimes with a minimum fee (example: “$10 or the percent fee, whichever is higher”)

• Outside Canada: fees are often higher, and foreign exchange fees may also apply

Always check your cardholder agreement to confirm the exact fee.

What Counts as a “Cash Advance”?

A cash advance can include:

• Taking out cash at an ATM using your credit card

• Getting cash from a bank teller using your credit card

• Some cash-like purchases that certain issuers treat like cash advances

If you ever see a cash advance fee and you do not know why, it can help to look at the transaction right before the fee on your statement.

How To Avoid Cash Advance Fees

A few simple ways:

• Do not use your credit card at an ATM

• Use a debit card or a prepaid card for cash withdrawals

• Keep a small emergency buffer so you do not need cash advances

• If you already took one, pay it back fast, since interest starts immediately