Credit Card Transactions Which Count As Cash Advances
Credit cards have many advantages, such as rewards, airline miles, and purchase protection under Section 75. You probably know that withdrawing cash from your credit card will incur a fee. However, some lesser-known transactions are classified as cash advances even though physical cash is not withdrawn from a cash machine.
If a transaction is classified as a cash advance, you'll face two charges. You will have to pay a cash advance fee of £3 or 3% of the purchase amount (whichever is higher). In addition, you will pay daily Interest. Cash advance transactions do not get the typical grace period (up to 59 days), that comes with standard purchases. You'll be charged interest on the amount immediately until you pay it off.
The cash advance fee still applies even if you have an introductory rate credit card that charges zero per cent interest on new purchases. Also, payments classified as cash advances have higher interest rates than standard purchases.
Cash advances could also lower your chances of taking out credit in future, some credit card companies will report cash advances to credit reference agencies, such as Experian. Lenders viewing your credit report may think you have bad money habits or are in financial difficulty, as a result, they may be hesitant to give you a new credit card, loan or mortgage.
The list below mentions 7 transactions most credit card companies count as a cash advance. There are exceptions to this, depending on the type of credit card, but always do your research before making one of these transactions with your credit card. If you're not sure, it's best to contact the credit card company to double-check before going ahead with your transaction.
Cash withdrawals e.g. withdrawing cash from a cash machine.
Currency exchanges e.g purchasing foreign currency and travellers cheques.
Gambling and Betting e.g. purchasing lottery tickets, fantasy football and casino transactions.
Gift cards e.g. MasterCard cash cards.
Cash Transfers e.g. transferring money from your credit card into your current account.
Making a mortgage payment.
Paying a utility bill payment.