Cash Advance
A cash advance is any transaction that allows you to use your credit card to obtain cash directly, most commonly by withdrawing from an ATM. Unlike a regular purchase, a cash advance starts accruing interest immediately — there is no grace period. The interest rate is also higher than the standard purchase rate, typically 21.99%–22.99% in Canada. Combined with the upfront cash advance fee (usually 1%–3% or $3–$5, whichever is greater), this makes cash advances one of the most expensive ways to access funds.
Beyond ATM withdrawals, several types of transactions are treated as cash advances by Canadian issuers, even if you don’t receive physical cash. Being aware of these “quasi-cash” transactions can help you avoid unexpected high-interest charges.
Quick Facts
| Detail | Value |
|---|---|
| Typical cash advance rate | 21.99% – 22.99% |
| Grace period | None — interest starts immediately |
| Cash advance fee | 1%–3% of amount, or $3–$5 minimum |
| Foreign ATM cash advance | May also trigger additional ATM fees |
| Treated as cash advance | Gambling transactions, cryptocurrency purchases, money orders, wire transfers |
| Effect on credit utilization | Counts immediately toward your credit limit |
Canadian Context
In Canada, as in most countries, cash advances should be used only as a last resort. The combination of no grace period, a higher interest rate, and an upfront fee means even a short-term cash advance is costly. Notably, many Canadian issuers categorize cryptocurrency purchases — including buying Bitcoin on an exchange — as cash advances, resulting in immediate interest at the cash advance rate. If you regularly need cash access, a line of credit or overdraft protection from your bank is almost always cheaper. The FCAC recommends Canadians understand the full cost of credit before using this feature.
Related Glossary Terms
Information on this page is provided for general educational purposes. Card terms and rates change frequently — always verify details directly with your card issuer.