July 18, 2012 | In: Trivia
Does the Bank Charge a Cash Advance Fee If Your Credit Card Is in a Credit Position?
Cash advance fees – we all hate them! Sometimes we withdraw money from our credit cards (often it is a very small amount) to cover for purchases in stores that do not accept credit cards, and we are dinged with the most inhumane fees ever. Banks charge at least $5 for every cash advance you make, that’s excluding interest and other hidden charges that their creative minds can come up with.
Cash advance fees are a must if you withdraw cash from your credit card – but what if your credit card was in a credit position (for example, you made a payment larger than your money owing or you had a large refund on your credit card) – will you be charged a cash advanced fee in this situation?
According to my small experience on this matter, you are not charged a cash advance fee if your credit card is in a credit position as long as you don’t withdraw a larger amount than your current credit with the credit card company. For example, let’s say that you owed $500 on your credit card, and then you made a payment of $1,000. You then withdraw (at an ATM or online) $500, you will not be charged a cash advance fee. However, if you withdraw a $501 (just $1 larger than your current credit), you will be automatically charged a $5 cash advance fee.
Note that some banks may charge you a cash advance fee either way – even if your credit card is in a credit position and you withdraw a smaller amount than the one they owe you. Additionally, note that it takes a few days for payments and credits to be posted – so if you make a payment of $1,000 and then you immediately withdraw $500, then it’s very possible that you will be charged a cash advance fee, since the bank didn’t have the time to account for your $1,000 payment.
A word of advice: Banks tend to be very finicky when it comes to cash advance fees and the reason for this is that they really don’t have full control over it (it is mostly controlled by credit card companies such as Visa or Mastercard) – so don’t waste your time negotiating these fees (e.g. trying to waive a cash advance fee after making a cash advance).