Your credit card can take a bashing when you're spending the day shopping, or perhaps doing a bit of late night browsing online.
You can also use your credit card to withdraw cash at an ATM just as you would with a debit card. However, it's worth noting that you should only use your card in this way in dire emergency.
How a cash advance credit card works
Getting cash from your credit card should be the exception rather than the rule, but there are certainly circumstances when it's a necessity.
Whether you are stranded and need money to get home, are using your card abroad or just need some money to get you through a lean period, a cash withdrawal from a credit card can sometimes be a useful, if expensive way to get funds.
When you make a cash advance on a credit card you're essentially borrowing money as cash from your provider, and works the same as using a debit card at an ATM.
However, unlike using a debit card, cash advance fees and hefty interest rates apply when you withdraw money from your credit card and in most cases these can be quite substantial, especially overseas.
If you compare credit card cash advance fees you will be able to find a list of the relative charges. Not only will you frequently have to pay a sizeable fee for making the withdrawal you will have to swallow a much higher rate of interest too.
We take a closer look at what you will have to pay below.
Is there such a thing as a 0% cash advance credit card?
Unfortunately, lenders know exactly how to hit customers where it hurts and the time of your greatest need is also likely to work out to be the most expensive.
At the time of writing, there are no providers currently offering interest free credit card cash advances. Whether it's a MasterCard or Visa cash advance fee charges are substantial and usually include both a one-off fee plus higher ongoing rates of interest.
What does withdrawing cash with your credit card cost?
Firstly you will have to pay a withdrawal fee; this is usually a percentage of the amount you are taking out but is subject to a minimum limit too, typically between £3-£5.
Not only that but, while your card may be offering you a great deal on purchases or balance transfers, a cash withdrawal will attract a far higher rate of interest, regardless of what other offers you have in place. This will often be much even higher than the card's standard interest rate.
Cash withdrawals also usually start earning interest from the second you leave the ATM with the cash in your wallet as they're often excluded from the interest-free borrowing before you get your credit card statement.
Do cash advances show on your credit card statement?
The answer is yes. Even though each provider will itemise and list expenditure differently, because the rates which apply are not the same as the standard charges, this type of withdrawal will show separately.
There isn't really such a thing as a cheap credit card cash advance but if you think it's a facility you might need, carrying out a credit card with cash advance comparison really is absolutely vital. With such sky-high charges, finding the provider who is offering the most competitive rates is really important.
How do I get cash from my credit card without a cash advance?
Because cash advance with no fees is at present not available on credit cards, you may well want to avoid this facility other than in an emergency. However, you may still need access to cash, rather than just credit.
There is a way around this: direct transfer from your credit card to your bank account.
An increasing number of lenders now provide the facility to move money from your credit card directly to your bank account. Although charges will apply, it still works out much cheaper compared to cash advance charges on credit cards.
This facility isn't much help in an emergency but if you are able to plan slightly in advance, you can arrange for the cash you need to be moved from your credit card to your bank account to cover those all-important costs.
And just to sweeten the deal even further, if you have a decent credit rating you could even qualify for a 0% money transfer which could allow you to pay off your overdraft or other borrowing at a lower rate. Certainly an alternative worth investigating although you won't be able to draw on the money quite as quickly as if you went to an ATM.