We’ve all been there. The month’s finances are a little tight, and you need to buy something with cash. Maybe you’re at a cash-only pharmacy or on vacation and in urgent need of local currency. Whatever the situation, a cash advance on a credit card can seem like a simple way to get out of a financial bind.
Before you take advantage of this quick fix, here are three important things to know about cash advances.
There are fees
Almost every credit card in Canada charges an upfront cash-advance fee. You’ll either pay a percentage of your transaction or a flat amount. For the President’s Choice Financial® Mastercard® the fee is $3.50 for a cash advance in Canada and $5 for a cash advance outside Canada.
Interest rates are higher
Cash advances typically incur higher interest rates than everyday purchases.
There’s no interest-free grace period for cash advances
Unlike with everyday credit card purchases, you won’t be given an interest-free grace period to pay back the money you borrowed. When it comes to cash advances, interest accrues starting the same day as your advance.
We all want financial peace of mind, so always ask questions and explore your options. You can find out more from the Financial Consumer Agency of Canada (FCAC), which provides valuable information to Canadians about financial products and services. Visit. canada.ca/it-pays-to-know or https://www.youtube.com/watch?v=h4Z5S8W96v0 learn more about the FCAC’s No $urprises campaign.