Cash Advance APR
Cash Advance APR refers to the annual percentage rate charged by a credit card issuer on cash advances, which are funds borrowed against the card’s credit limit, typically at a higher rate than for regular purchases. This is evaluated within APR, Interest & Fees.
Plain-Language Meaning
This term describes the specific interest rate applied when you use your credit card to withdraw cash or access cash-like funds, rather than making standard purchases.
Practical Example
If you use your credit card to get cash from an ATM, the amount you withdraw is subject to the cash advance APR, which is usually higher than the rate for regular card purchases.
What It Does Not Mean
This does not refer to the interest rate for regular purchases, balance transfers, or other types of credit card transactions.
How the System Uses It
The system evaluates cash advance transactions separately from purchases, applying the cash advance APR to any amount borrowed as a cash advance, often starting from the transaction date and without a grace period.
Common Misconceptions
- “Cash advance APR is the same as the purchase APR.” Cash advance APR is typically higher than the purchase APR.
- “Interest on cash advances only starts after the billing cycle.” Interest on cash advances usually begins accruing immediately on the transaction date.
- “All credit card transactions are charged the same APR.” Different types of transactions, such as purchases, balance transfers, and cash advances, often have different APRs.
Related Pages
Related Glossary Terms
FAQ
- Does the cash advance APR apply to all credit card transactions? No, the cash advance APR only applies to cash advances and not to regular purchases or balance transfers.
- Is there a grace period for cash advance APR charges? Typically, there is no grace period for cash advances, and interest starts accruing immediately from the date of the transaction.