A cash advance fee is a charge that credit card companies assess when you tap your line of credit to get cash. It is a fee that your credit card issuer makes you pay to complete a cash advance. The fee can be in the form of a flat charge or a percentage of the advance amount. The most common structure is 5% of the advance amount or $10, whichever is more. However, some card issuers may charge less or more than that. In addition to the cash advance fee, card issuers also typically charge a higher APR compared to the rate charged on regular purchases. Cash advances dont qualify for the same grace period as purchases, so interest starts accruing immediately.

To give you an idea of how much a cash advance can cost, lets say you have a card that charges a 5% fee with a $10 minimum and a 28% cash advance APR, and you pay off your cash advance in six months. A $500 cash advance with a 5% fee will cost you $25. The interest on the cash advance will be $72, and the total cost of the cash advance will be $99.50.

Its important to note that any credit card payments you make beyond your required minimum monthly payment are applied to the balance with the highest interest rate, which will likely be your cash advance. If you have a balance thats currently benefiting from a 0% introductory APR, that payment priority is especially important to keep in mind.