What is a cash advance and how does it work?

Westpac credit cards also allow you to withdraw cash at an ATM in New Zealand and overseas. Interest is then immediately charged on a cash advance, which differs from the purchase interest rate. If you choose to withdraw cash overseas, fees may also apply. Here’s what you need to know about cash withdrawals on your credit card:

Interest on cash advances is usually higher

The interest rate on a cash advance from a credit card is usually higher than the interest rate for purchases. Take a look at all our credit card interest rates – you’ll see the purchase rate is different to the cash advance rate. 

Interest on cash advances starts adding up immediately

By paying your credit card statement closing balance in full by the pay by date each month, you won’t pay interest on your purchases.

However, cash advances are different; they incur interest on the daily balance of each cash advance from the day you withdraw the money. The interest adds up each day, increasing the outstanding balance on the credit card until the day you pay that amount in full.

More affordable ways of borrowing money

The best way to spend cash is from a transaction or savings account. However, if you need to borrow money, a credit card cash withdrawal may not be the best choice.

A cash advance on your credit card is a less cost-effective than other types of borrowing. You may want to consider how much it will cost you to borrow money.

Clear the balance at the end of the month

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. If you can’t cover the balance using money you have available now or in the near future, you could consider another way to manage your money more effectively.

Quasi-cash

If you use your credit card to purchase goods or services that are similar or easily converted to cash (otherwise known as “quasi-cash” transactions), this is a cash advance and interest is charged from the date of the transaction until the date you pay the transaction off in full. Keep in mind the interests rate on cash advances is usually higher than the rate on purchases.

Examples of quasi-cash transactions

The most common types of quasi-cash transactions include:

• making gambling transactions or topping up online gambling accounts;
• sending money to another person, for example money transfer or telegraphic transfer;
• purchasing foreign currency or travelers cheques;
• topping up funds on a rechargeable gift card or prepaid card; and
• buying cryptocurrency and securities (including, shares and bonds)

Transactions that are not considered quasi-cash include:

• topping up prepaid mobile phones;
• topping up prepaid transport cards;
• purchasing raffle tickets; and
• making donations to charities.

How to manage ATM cash withdrawals

You can choose to turn cash advances on or off for your credit card and it's easy to do.
Here's how:

1. Log in to  in Westpac One® online banking
2. Go to 'Manage my cards'
3. Select the card you want and slide the 'Cash Advance' button to 'on' or 'off'.

Remember, this will not disable the ability to make quasi-cash transactions.

If you're not set-up for online banking, call us on 0800 888 066 and our team can turn cash advances 'off' or 'on' for you. Turning cash advances off means you will not be able to make cash withdrawals at any ATM or transfer money from that card to other accounts. You can still make cash withdrawals from your local branch.