Where can you borrow $100 for an effective, annualized interest rate of 260%? Try your bank credit card ! Credit card cash advance fees are soaring. Five years ago most card issuers charged a cash advance fee of 2.0% with a $2.00 minimum. They also capped the special fee at $10.00. Now the fees have a higher minimum and no maximum. Additionally most issuers now charge a higher interest rate for cash advances compared to the rate for purchases. For example Bank of America now charges a $20.00 minimum fee for cash advances made at other than an ATM or with a convenience check. Borrow $100 off your BofA card and you will be charged $20.00 and daily interest at the rate of 21.49% per annum. Since cash advance fees are considered interest this means you’ll pay an annualized interest rate of 261.49%. Take a smaller cash advance and the annualized interest rate could soar to 1000%. Other issuers have established higher minimums too. Wells Fargo and First USA now levy a $10.00 minimum cash advance fee. If you need cash think twice about using your credit card. The best way to get cash is to use an ATM/debit card at your bank’s ATM.
WHAT THE BIG GUNS CHARGE FOR CASH ISSUER CASH APR CASH ADVANCE FEE Citibank 19.99% 3.0% with a $5.00 minimum Bank One/First USA 19.99% 2.0% with a $10.00 minimum MBNA 17.65% 2.0% with a $2.00 minimum Discover 20.99% 2.5% with a $3.00 minimum Chase 19.55% 3.0% with a $5.00 minimum Bank of America 21.49% 3.0% with a $20.00 minimum; ($2.00 minimum for ATM or check access) Capital One 19.80% 2.5% with a $2.50 minimum Household Bank 19.99% 2.5% with a $2.50 minimum Fleet 21.99% 4.0% with a $5.00 minimum Providian 23.99% 5.0% with a $3.00 minimum