I understand that if I use my credit card to get cash from an ATM, that counts as a 'cash advance'.

Are there any other credit cards transactions that don't involve taking cash from ATM that count as a cash advance? e.g certain forms of online bill payment or funding a PayPal account with credit card?

  • 2
    They charge more for a cash advance because they can't collect the merchant's fee on the transaction. The others you mention do all involve a merchant's fee and thus shouldn't be recorded as cash advances.
    – keshlam
    Oct 17, 2014 at 19:46

2 Answers 2


Generally when you get cash - it is considered cash advance. So ATM, casinos, currency-exchange places, buying travelers' checks, and money transfer/check cashing agencies are the standard suspects in that regard. Funding paypal account may also be considered as cash advance, and in some cases - buying gift cards (depending on the merchant and type of gift card).

There are several reasons for this:

  1. Cash cannot be recovered. Once you got cash - no-one can chase you to take it back. So it is a much higher risk - they may end up absorbing fraud activities if the merchant can prove to have done the due diligence (which most of them do).

  2. It is also a higher cost to the companies - they need to pay it to the merchant faster. Usual purchases may end up in the merchant processor's pocket for significant amounts of time (I know of some cases where it can be 30 days), but not so for cash advances. It also adds to the risk - since even if a charge-back is successful, the money has already left the building and will have to be recovered.

  3. Because they can. People who use credit cards for cash advances are usually either desperate or financially illiterate (and in many cases - both). If the companies can earn money for the service - why not?

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    Another factor is that if someone uses a credit card to pay $100 for a product that cost the merchant $60, the merchant will receive less than $100 (e.g. $97), but will accept the lesser amount because he still makes $37 profit. If a merchant gave someone $100 cash in exchange for a $100 charge transaction, the merchant would lose $3. I merchant may sell $100 of commercial paper (gift certificates) in exchange for a $100 charge transaction if nothing the customer would do with that paper would cost him more than $97.
    – supercat
    Feb 20, 2015 at 19:59

Besides transactions that are used to generate cash such as withdrawing money from the ATM, those checks that the credit card company sends you in the mail may be considered as cash advances.

Sometimes the credit card company uses them to encourage balance transfer, and may delay charging you interest. But frequently these are treated as a cash advance and have their own limits, fees and interest schedule.

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