Calculate Credit Card Cash Advance Interest and Fees

Quick Answer: A cash advance costs two things: a fee charged on the day you take the cash (a flat amount or a percentage of the advance, set by your card agreement) and interest at the card's cash advance APR. Interest usually starts on the transaction date because there is generally no grace period. To estimate it, multiply the advance by the APR divided by 365 (or 360, depending on the issuer) and by the number of days the balance stays unpaid.

Calculating cash advance interest takes three numbers from your card agreement or statement: the cash advance fee, the cash advance APR and the method your issuer uses to turn the APR into a daily rate. Unlike purchases, the clock starts the day you withdraw, so the cost depends mostly on how many days pass before the advance is paid off.

What counts as a cash advance?

The Consumer Financial Protection Bureau describes a cash advance as using your credit line to take out money, and treats it as a short-term loan rather than a purchase. The obvious case is withdrawing cash at an ATM with a credit card. Its cash advance explainer also mentions checks written from your credit card account, often called convenience checks, which many issuers mail out.

Beyond those two, the classification is up to your issuer. The CFPB notes that your cardholder agreement sets out the rules for which transactions and fees fall into which balance category. Some agreements put certain cash-like transactions in the cash advance bucket. If you are unsure how a particular transaction will be treated, the agreement is the document to check, and the CFPB keeps a searchable credit card agreement database if you no longer have yours.

Two other details from the CFPB are worth knowing before the math: many cards set a separate, lower credit limit for cash advances, and your latest statement lists the current cash advance interest rate.

The three costs that stack up

The fee is a one-time charge. Interest keeps running. The CFPB also warns that ATM fees may apply on top; how they appear on your statement depends on the ATM and the issuer.

How do you calculate cash advance interest?

Issuers generally calculate interest with a daily periodic rate: the APR divided by 365 or 360, depending on the issuer. Each day, the rate is applied to what you owe in that balance category.

The basic estimate:

Interest ≈ advance amount × (cash advance APR ÷ 365) × days outstanding

Then add the fee:

Total cost ≈ fee + interest (+ any ATM operator fee)

A worked example with made-up numbers

Use your own card's terms; these are illustrative only.

• Cash withdrawn: $500
• Fee in the agreement: 5% of the advance or $10, whichever is greater. 5% of $500 is $25, so the fee is $25.
• Cash advance APR: 29.99%
• Daily periodic rate: 0.2999 ÷ 365 = 0.000822 (about 0.0822% a day)

Interest for different payoff dates:

Notice that for a short-lived advance, the fee is most of the cost. Paying the advance off a few days sooner trims the interest but not the fee.

Why your statement will not match exactly

Your issuer's figure will usually differ by a few cents or more, for reasons that are all spelled out in the agreement:

• Daily compounding. The CFPB explains that with a daily periodic rate, interest is compounded daily, so each day's interest is charged on a balance that includes earlier interest.
• The fee may join the balance. Depending on the agreement, the cash advance fee can be added to the balance that accrues interest.
• 360 versus 365. A 360-day divisor gives a slightly higher daily rate.
• Average daily balance. Interest is applied to the balance each day, so a partial payment mid-cycle lowers the following days' interest.

For the general purchase-side mechanics, see how to calculate credit card interest; this article sticks to the cash side.

Why is there no grace period on a cash advance?

A grace period is the gap between the end of a billing cycle and the payment due date during which new purchases do not accrue interest, provided you pay in full. According to the CFPB's grace period explanation, grace periods typically apply only to purchases. With a cash advance or a check from your issuer, you generally pay interest from the date of the transaction.

That is why paying your whole statement balance on the due date, which avoids interest on purchases, does not erase cash advance interest. The interest from the withdrawal date to your payment date has already accrued and shows up on the next statement.

How do payments get applied to a cash advance balance?

If you carry both a purchase balance and a higher-rate cash advance balance, the order matters. Under Regulation Z's payment allocation rule (12 CFR 1026.53), any amount you pay above the required minimum must go first to the balance with the highest APR, then to the others in descending order of rate. How the minimum payment portion itself is applied is left to the issuer.

So with a $40 minimum due and a $540 payment, the $500 above the minimum goes to the highest-rate balance first, which is often the cash advance.

Where to find cash advance charges on your statement

Look in three places:

1. Transactions. The withdrawal appears as its own line, often with an ATM location in the description. Convenience checks show the check number.
2. Fees charged. The cash advance fee appears in the fees section, dated the same day as the advance.
3. Interest charge calculation. The CFPB notes that your statement must show each balance category that has a different APR, along with the amount of the balance subject to each rate. Cash advances get their own row with their own APR and their own interest figure.

If you want to see every cash advance and fee across a year, a spreadsheet beats reading twelve PDFs. Your issuer may offer a CSV download of recent activity. For older PDF statements, QuickBankConvert's credit card statement to Excel conversion turns each statement into rows of date, description and signed amount; you can then filter the description column for the issuer's cash advance wording and its fee lines. The spending analysis guide shows how to total those rows by month.

Rebuilding the estimate in Excel

Put the advance in B1, the APR in B2 (as 29.99%), the days in B3 and the fee in B4:

• Simple daily interest: =B1*B2/365*B3
• Daily compounding: =B1*((1+B2/365)^B3-1)
• Total cost: =B4+B1*((1+B2/365)^B3-1)

Change 365 to 360 if your agreement says so. Comparing the result with the cash advance row on your next statement is a quick way to confirm you have read the terms correctly.

What to look up before you rely on the numbers

• Cash advance fee: flat, percentage, or greater-of, and any minimum.
• Cash advance APR, and whether it is variable.
• Which transactions your issuer classes as cash advances.
• Your separate cash advance limit.
• Whether the fee is added to the balance that accrues interest.
• The daily rate divisor, 365 or 360.

Unusual cash advance lines that you did not make are also worth reviewing as possible fraud; see spotting fraud on a statement.

Related guides

• How the credit card minimum payment is set
• How does credit card interest work?
• How to read a credit card statement