Capital One Advance Cash Fee: What You Need to Know
If you're a Capital One credit card holder, you may have heard of the advance cash fee. What is it, exactly? And why does it matter?
Simply put, the advance cash fee is the fee Capital One charges when you use your credit card to withdraw cash from an ATM or get cash back at a store. This fee is in addition to any interest charges and is typically a percentage of the total amount withdrawn, with a minimum fee amount.
So why does this matter? Well, for one thing, it can be expensive. The advance cash fee can range from 3% to 5% of the total cash amount, with a minimum fee of around $10 to $20. So if you withdraw $500 in cash, you could be looking at an advance cash fee of anywhere from $15 to $25.
How to Avoid the Advance Cash Fee
Obviously, if you're looking to save money, you'll want to avoid this fee as much as possible. Here are a few ways to do that:
- Use a debit card instead. If you have a debit card, you can use that to withdraw cash from an ATM without incurring any fees (although some ATMs may still charge their own fees).
- Plan ahead and withdraw cash in advance. If you know you'll need cash, plan ahead and withdraw it from your bank account before you leave home.
- Use a different credit card. Some credit cards don't charge an advance cash fee, so you can use those instead of your Capital One card.
- Avoid getting cash back. If you're making a purchase at a store, try to avoid getting cash back and instead use your card to pay for the purchase outright.
The Pros and Cons of Using Your Credit Card for Cash Advances
While the advance cash fee can be steep, there are some situations where using your credit card for a cash advance might make sense. Here are a few pros and cons to consider:
- Convenience. If you need cash right away and don't have another way to get it, using your credit card for a cash advance can be a quick and easy solution.
- Rewards. Some credit cards offer rewards for cash advances, so you could earn points or cash back for using your card in this way.
- Credit score benefits. Depending on how you use your credit card and pay off the advance, using your card for a cash advance could potentially help improve your credit score.
- Expensive fees. As we've already mentioned, the advance cash fee can be quite expensive and add up quickly if you're not careful.
- High interest rates. Unlike regular credit card purchases, cash advances typically come with higher interest rates, which means you could end up paying a lot more in interest charges over time.
- Potential for debt. If you're not careful, using your credit card for a cash advance could lead to debt that's difficult to pay off, especially if you're carrying a balance on your card already.
The Capital One advance cash fee is an expense you'll want to avoid if possible, but there are times when using your credit card for a cash advance might make sense. By understanding the pros and cons of this option, you can make a decision that's right for you.