What is a cash advance?
A cash advance is when you use your credit card to access money or move money, rather than making a purchase for goods or services using your card.
Common examples of cash advances include:
- Withdrawing cash from an ATM.
- Transferring money from your credit card into your bank accounts using online banking.
- Loading money into digital wallets or payment services such as PayPal.
- Transferring funds to money transfer platforms, for example Wise or Revolut.
- Buying gambling chips and tokens on platforms like bet365, TAB.
- Purchasing cash equivalent items such as foreign currency, cryptocurrency or traveller's cheques.
- Sending money through remittance services for example Western Union or international money wires.
What does a cash advance cost?
Cash advances have their own interest charges which are higher than those for regular purchases made with a credit card.
The other big difference between credit card transactions and cash advances is that when you complete a cash advance you'll start being charged interest straight away and until it is paid off in full.
Here's an example of a credit card purchase:
Sam is shopping at a department store and spends $100 on clothes.
When their next statement comes it'll show that charge.
If Sam's credit card balance isn't paid in full, they'll start being charged interest. This ranges from 9.95% to 20.95% p.a. depending on which ASB Visa credit card they have.
And here's a cash advance:
Sam transfers $100 from their credit card to their spending account.
They'll start being charged interest that day, at a rate of 22.95% p.a.
When Sam's statement arrives, it will show the cash advance amount and the interest charged. Interest will continue to be charged until it's paid off.
How credit card repayments work
Credit card repayments can work differently than people expect.
The interest on your credit card gets paid first, followed by any bank charges or fees. After that cash advances (oldest to latest) and purchases (oldest to latest) are paid.
Full details can be found under 'Allocation of payments' in our credit card conditions of use.
When to use a cash advance
A cash advance can be a good option to have as a back up if you need access to cash quickly but not on an ongoing basis. Think of it as an 'in case of emergency' option. It could also be an option if you plan on repaying your full credit card balance the same day.
What could you use instead?
If you don't want to make cash advances, you can use card control in the ASB Mobile Banking app to turn off cash advances for ATMs. This means you won't be able to withdraw cash from an ATM using your credit card.
Some people like to use cash advances to access cash when overseas. In these cases an option could be to put your credit card into credit (that is, have money stored on it) or use an ASB Visa Debit card.
If there's a big expense coming up, or you find yourself in a bit of a tough spot financially, there are other ways to access cash. More cost-effective ways include:
- Taking money from a savings account
- Applying for a personal loan
And in the case of financial hardship, options also include an early release of term deposits and a KiwiSaver hardship withdrawal. You can also use Support Finder to see what other help you may qualify for.
FAQs
Are cash advances good?
Cash advances can be helpful for customers in some situations. They can be more costly than other forms of credit and it's important to consider all your options when taking on debt.
How do cash advances affect my credit rating?
Cash advances do not directly impact a credit rating. What would impact it is not paying off the minimum amount owing on a credit card each statement.
Is there a limit to how much cash I can advance?
Yes, there is a daily limit for cash advances. This varies between ASB credit cards. Find out what they are here.
ASB's lending criteria and terms apply. Interest rate on cash advances currently 22.95% p.a. applies excluding ASB Visa Flex cash advance interest rate currently 9.95% p.a. applies. Interest rates may change. Fees apply, refer to asb.co.nz for details.
Fees may change. Refer to asb.co.nz for other fees and charges.