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What is a cash advance and how does it work?
Need cash in a hurry? Using your credit card might seem like a quick fix – but it could cost you more than you expect. Before you take out a cash advance, it’s worth understanding how it works and what it could mean for your wallet.
What is a cash advance?
A cash advance is when you use your credit card to get cash or make certain types of purchases that are treated like cash.
This includes:
- Withdrawing money from an ATM using your credit card
- Buying lotto tickets
- Online gambling
- Buying cryptocurrency
- Foreign currency, travellers cheques and international money wires
- Paying bills through certain platforms (e.g. tax payments).
These types of transactions are treated differently from regular purchases – and knowing the difference can help you avoid unexpected fees. Take a look at all our credit card interest rates – you’ll see the purchase rate is different to the cash advance rate.
The true cost of a cash advance.
Cash advances can be expensive. Here’s why:
- No interest-free days: Interest is charged the moment you withdraw the money
- Daily interest charges: Interest adds up daily until the full amount is repaid, increasing the outstanding balance on the credit card until the day you pay that amount in full
- Higher interest rates: Cash advances often have a higher interest rate than regular purchases.
If you have made a cash withdrawal on your credit card, paying back the whole balance of your next statement will help prevent interest charges building up further.
Smarter ways to get cash.
A cash advance might feel like a quick solution, but it can lead to growing debt. Here are some better options to consider:
- Use your transaction or savings account for everyday spending.
Check out our account options - Talk to your bank about an overdraft or personal loan.
Apply for a Westpac personal loan - Create a budget to manage shortfalls and reduce reliance on credit.
Use our budget calculator - Build an emergency fund for unexpected costs like car repairs or appliance replacements.
Calculate how long it will take for you to reach a savings goal
How to manage ATM cash withdrawals.
If you want to avoid accidental cash advances, you can choose to turn ATM cash withdrawals on or off for your credit card – and it’s easy to do.
How to update your settings in Westpac One:
- Using the Westpac One app:
Go to the Cards tab, select your card and slide the ‘ATM Cash Withdrawal’ toggle to ‘on’ or ‘off’. - Using an internet browser:
Go to ‘Manage my cards’, select your card, and slide the ‘Cash Advance’ button to ‘on’ or ‘off’.
Things you should know.
This page is for general information purposes only and does not take your financial situation or goals into account.
Credit Cards terms and conditions, eligibility criteria and lending criteria apply. Conditions of Use for the applicable card apply. Rates, transaction and services fees apply.
Terms, conditions, fees and charges apply to Westpac products and services. See Westpac general terms and conditions for details.
Westpac One App Terms and Conditions which incorporate Westpac’s general terms and conditions and the Westpac Website Terms of Use apply.