If you’re in a bind and need cash fast, a cash advance on your credit card might seem like a good option. But before you take out a cash advance, it’s important to understand how it works and the costs associated with it. In Singapore, cash advances on credit cards are offered by most banks and financial institutions and can be useful in emergencies or when you need cash quickly.
When you take out a cash advance on your credit card, you’re essentially borrowing money against your credit limit. Unlike a regular credit card purchase, which allows you to pay off your balance over time, cash advances typically come with higher interest rates and fees. In Singapore, the interest rate on cash advances can be as high as 28% per annum, and there is usually a transaction fee of 8% of the amount withdrawn or S$15, whichever is higher.
Before you take out a cash advance, it’s important to consider the costs associated with it and whether you can afford to repay the amount in full by the due date. If you’re unable to repay the full amount, you’ll be charged interest on the outstanding balance, which can quickly add up. It’s also important to be aware of the credit card cash advance limits and any other requirements or eligibility criteria that may apply.
Key Takeaways
- Cash advances on credit cards are a way of borrowing money against your credit limit.
- Cash advances typically come with higher interest rates and fees than regular credit card purchases.
- Before taking out a cash advance, it’s important to consider the costs associated with it and whether you can afford to repay the amount in full by the due date.
Understanding Cash Advances
If you are in need of cash urgently, a cash advance on your credit card can be a quick and easy solution. In this section, we will explain what a cash advance is and how it works in Singapore.
What Is a Cash Advance?
A cash advance is a short-term loan that you can access directly from your credit card. It allows you to withdraw cash from your credit card’s available credit line. This means you can access physical cash on hand, which can be useful in situations where credit card payments are not accepted.
However, it is important to note that cash advances come with high fees and interest rates. You should only resort to this process after you have exhausted all other methods of getting cash such as withdrawal from a savings account.
How Cash Advances Work in Singapore
In Singapore, cash advances are available on most credit cards. However, the fees and interest rates vary depending on the bank and the credit card you use. For example, banks like DBS and UOB charge 28% per annum for cash advances. OCBC charges 28.92% per annum.
Additionally, a cash advance fee of 8% of the transaction amount or S$15 (whichever is greater) applies for each cash advance transaction, and will be charged to your credit card.
Interest is incurred on a daily basis, which means compounding interest. This means that the longer you take to pay off the cash advance, the more interest you will have to pay. Therefore, it is important to pay off the cash advance as soon as possible to avoid high interest charges.
In conclusion, a cash advance on your credit card can be a quick and easy solution if you need cash urgently. However, it is important to understand the high fees and interest rates associated with cash advances. You should only resort to this process after you have exhausted all other methods of getting cash such as withdrawal from a savings account.
The Costs Associated with Cash Advances
If you are considering taking out a cash advance on your credit card, it is important to understand the costs involved. Here are some of the fees and charges you can expect to pay:
Interest Rates and APR
When you take out a cash advance, you will be charged interest on the amount you borrow. This interest rate is typically higher than the rate you would pay on purchases made with your credit card. In addition to the interest rate, you will also be charged an annual percentage rate (APR). The APR takes into account all of the fees and charges associated with the cash advance, including the interest rate.
Cash Advance Fees
In addition to the interest rate and APR, you will also be charged a cash advance fee. This fee is typically a percentage of the amount you borrow, and it is charged upfront. For example, if you take out a cash advance of $1,000 and the cash advance fee is 5%, you will be charged a fee of $50.
Additional Charges
In addition to the interest rate and cash advance fee, there may be other charges associated with your cash advance. For example, you may be charged a transaction fee for using an ATM to withdraw the cash advance. You may also be charged an effective interest rate, which takes into account all of the fees and charges associated with the cash advance. Other charges may include an interest charge, a minimum interest charge, a late payment fee, and an overlimit fee.
It is important to note that the costs associated with cash advances can add up quickly. If you are unable to pay off the cash advance quickly, you may end up paying a significant amount in fees and interest charges. Therefore, it is important to carefully consider whether a cash advance is the best option for your financial needs.
Credit Card Cash Advance Limits
If you’re considering using a cash advance on your credit card, it’s important to know the limits on how much you can withdraw. In Singapore, credit card cash advance limits are determined by your credit limit and daily withdrawal limits.
Credit Limit and Cash Advance Limit
Your credit limit is the maximum amount of credit your card issuer has approved for you to borrow. However, your cash advance limit is usually a percentage of your credit limit, typically 75%. This means that if your credit limit is S$10,000, your cash advance limit will be S$7,500.
It’s important to note that your cash advance limit is not the same as your available credit limit. Your available credit limit is the amount of credit you have left after taking into account any outstanding balances or pending transactions. So if you have a balance of S$2,000 on your credit card and your credit limit is S$10,000, your available credit limit would be S$8,000. This means that your cash advance limit would be 75% of S$8,000, which is S$6,000.
Daily Withdrawal Limits
In addition to your cash advance limit, there are also daily withdrawal limits that apply to cash advances. These limits vary depending on the card issuer and the type of card you have. For example, some cards may have a daily withdrawal limit of S$3,000, while others may have a lower limit of S$1,000.
It’s important to note that these daily withdrawal limits are not the same as your cash advance limit. Your cash advance limit is the maximum amount you can withdraw in a single transaction, while your daily withdrawal limit is the maximum amount you can withdraw in a day.
In conclusion, it’s important to understand the credit card cash advance limits before using this feature. Make sure you know your credit limit and cash advance limit, as well as any daily withdrawal limits that apply to your card. Remember that cash advances usually come with high fees and interest rates, so it’s best to avoid them unless it’s an emergency.
How to Get a Cash Advance
If you need cash urgently, you can get a cash advance on your credit card. Here are the different ways you can get a cash advance in Singapore:
Using an ATM
One of the easiest ways to get a cash advance is by using an ATM. You will need to have a Personal Identification Number (PIN) to withdraw cash from an ATM. If you do not have a PIN, you can call your credit card provider’s customer care service and ask them to set a PIN for your account.
To withdraw cash from an ATM, insert your credit card into the machine and enter your PIN. You can withdraw cash up to your credit limit or a specific cash advance limit set by your credit card provider. Keep in mind that cash advances usually come with high-interest rates and fees.
Over the Bank Counter
If you prefer to get a cash advance over the bank counter, you can visit a UOB Group branch and transfer funds from your credit card to your bank account. You will need to bring your credit card and a valid photo ID to the bank. You can then withdraw the cash from your bank account.
Internet Banking Services
You can also get a cash advance through internet banking services such as UOB Personal Internet Banking or Digibank. Simply log in to your account and select the option to transfer funds from your credit card to your bank account. You can then withdraw the cash from your bank account.
Keep in mind that cash advances usually come with high-interest rates and fees. It is important to pay off your cash advance as soon as possible to avoid accumulating too much debt.
Repayment and Interest Calculation
Billing Cycle and Repayment
When you take a cash advance on your credit card, the amount you borrow starts accruing interest immediately. The interest rate charged on cash advances is usually higher than the interest rate charged on purchases. Therefore, it is important to repay the cash advance as soon as possible to avoid paying more interest.
The billing cycle for credit cards in Singapore is usually 30 days. Your monthly statement of account will show the amount you owe, the minimum payment due, the due date, and the interest charged on your cash advance. You must make at least the minimum payment by the due date to avoid late payment fees and additional interest charges.
Interest Compounding
Interest on cash advances is compounded daily. This means that interest is calculated on the outstanding balance of your cash advance every day. The interest charged on your cash advance will be added to your outstanding balance, and interest will be charged on the new balance the next day. This compounding effect can quickly increase the amount of interest you owe.
To illustrate, let’s assume that you took a cash advance of $1,000 on the first day of your billing cycle, and the interest rate on your cash advance is 28% per annum. If you make no repayments, your outstanding balance at the end of the billing cycle will be $1,023.29. This is because the interest charged on your cash advance for the 30-day billing cycle is $23.29, which is calculated as follows:
$1,000 x (28%/365) x 30 = $23.29
If you continue to make no repayments, your outstanding balance will continue to increase, and you will end up paying much more in interest than the amount you borrowed. Therefore, it is important to make timely repayments and pay off your cash advance as soon as possible.
In summary, when you take a cash advance on your credit card, you must make at least the minimum payment by the due date to avoid late payment fees and additional interest charges. Interest on cash advances is compounded daily, so it is important to repay your cash advance as soon as possible to avoid paying more interest.
Alternatives to Cash Advances
If you’re in need of cash but don’t want to take out a cash advance on your credit card, there are other options available to you in Singapore. Here are some alternatives to consider:
Personal Loans
A personal loan is an unsecured loan that you can use for any purpose, including emergencies. Personal loans typically have lower interest rates than cash advances on credit cards, and you can borrow a larger amount of money. Personal loans are also more flexible than credit card cash advances, as you can choose the repayment term that suits you best.
Credit Line
A credit line is a type of loan that allows you to borrow money up to a certain limit. You only pay interest on the amount of money you borrow, and you can use the credit line as many times as you need as long as you don’t exceed the limit. A credit line is a good option if you need to borrow money on a regular basis, as you can access the funds whenever you need them.
Balance Transfer
If you have a credit card with a high interest rate, you can consider doing a balance transfer to a card with a lower interest rate. This will help you save money on interest charges and free up some cash that you can use for emergencies. Some credit cards offer 0% interest on balance transfers for a certain period of time, which can be a great way to save money.
Overall, taking out a cash advance on your credit card should be a last resort. There are other options available to you that can help you get the cash you need without incurring high interest charges. Consider your options carefully and choose the one that works best for you.
Risks and Precautions
Understanding the High Risks
Taking a cash advance on your credit card can be a risky move. It is important to understand the high risks involved before you decide to take out a cash advance. Firstly, the interest rates for cash advances are typically much higher than the interest rates for regular purchases. This means that you will end up paying more in interest charges if you take out a cash advance.
Secondly, cash advances usually come with additional fees, such as transaction fees and cash advance fees. These fees can add up quickly, making cash advances an expensive way to borrow money.
Lastly, taking out a cash advance can also affect your credit score. If you are unable to repay the cash advance on time, your credit score could be negatively impacted. This could make it more difficult for you to borrow money in the future.
Security Measures
In order to protect yourself from the high risks associated with cash advances, there are a few security measures you can take. Firstly, it is important to only take out a cash advance if you absolutely need to. If you can wait until your next paycheck, it is usually better to do so.
Secondly, make sure you understand the terms and conditions of your credit card agreement before taking out a cash advance. This will help you avoid any surprises, such as hidden fees or high interest rates.
Lastly, it is important to be vigilant about your credit card security. Keep your credit card information safe and secure, and monitor your account for any unauthorized transactions. If you suspect that your credit card has been compromised, contact your credit card company immediately.
Overall, taking out a cash advance on your credit card can be a risky move. However, if you understand the risks involved and take the necessary precautions, you can minimize your risk and make an informed decision about whether or not to take out a cash advance.
Cash Advance for Different Card Types
If you have a credit card in Singapore, you may be able to take advantage of the cash advance feature. This allows you to withdraw cash from an ATM or bank using your credit card, providing you with instant cash when you need it. However, it’s essential to understand that cash advances come with high-interest rates and fees. In this section, we’ll take a closer look at how cash advances work for different card types.
Visa and MasterCard
Visa and MasterCard are widely accepted credit card types in Singapore. Both Visa and MasterCard offer cash advance services to their customers. You can withdraw cash from any ATM that displays the Visa or MasterCard logo. However, it’s important to note that cash advances on Visa and MasterCard credit cards come with high-interest rates, which can quickly add up if you don’t pay off the balance on time.
American Express
American Express is another popular credit card type in Singapore. Like Visa and MasterCard, American Express offers cash advance services to its customers. You can withdraw cash from any ATM that displays the American Express logo. However, it’s essential to note that cash advances on American Express credit cards come with high-interest rates and fees, which can quickly add up if you don’t pay off the balance on time.
In summary, cash advances can be a convenient way to get quick cash when you need it. However, they come with high-interest rates and fees, so it’s essential to use them responsibly. If you’re considering a cash advance on your credit card, make sure you understand the terms and conditions, including the interest rates, fees, and repayment terms.
Eligibility and Requirements
If you’re considering taking a cash advance on your credit card in Singapore, there are certain eligibility requirements that you need to meet. In this section, we’ll go over the age and income criteria as well as the documentation needed for a successful application.
Age and Income Criteria
To be eligible for a cash advance on your credit card, you must be at least 21 years old. Additionally, you must meet the minimum income requirement set by your credit card issuer. The income requirement varies depending on the card issuer, but it’s usually around S$30,000 per annum.
Documentation Needed
When applying for a cash advance on your credit card, you’ll need to provide certain documentation. This includes your NRIC, your name, and proof of income. You may also be required to provide additional documentation depending on the credit card issuer.
It’s important to note that even if you meet the age and income criteria and provide all the necessary documentation, your credit card issuer may still reject your application for a cash advance. This could be due to a number of factors, such as a low credit score or a history of missed payments.
In summary, to be eligible for a cash advance on your credit card in Singapore, you must be at least 21 years old, meet the minimum income requirement set by your credit card issuer, and provide the necessary documentation. However, meeting these requirements does not guarantee approval for a cash advance.
Benefits and Rewards
If you’re considering taking a cash advance on your credit card, you’ll be pleased to know that there are several benefits and rewards that you can enjoy.
Cashback and Miles
Many credit cards offer cashback or miles rewards when you use your card for cash advances. For example, the HSBC Advance CashBack Credit Card offers up to 2.5% cashback on local and overseas purchases each calendar month, with no minimum spend required. Meanwhile, the Citibank Cash Back Card offers up to 1.6% cashback on all spend, including cash advances.
Promotions and Offers
In addition to cashback and miles rewards, some credit cards also offer promotions and offers when you use your card for cash advances. For example, UOB is currently offering a $50 cash rebate when you perform at least one single cash advance transaction of a minimum of S$1,000 on your UOB Credit Card during the promotion period.
It’s important to note that rewards and promotions can vary depending on the credit card you use, so it’s always a good idea to read the terms and conditions carefully to ensure you’re getting the best deal.
Managing Your Cash Advance
If you need cash quickly, a cash advance on your credit card can be a convenient option. However, it’s important to manage your cash advance responsibly to avoid unnecessary fees and interest charges. Here are some tips to help you manage your cash advance:
Tracking Your Cash Advance Balance
It’s important to keep track of your cash advance balance to avoid going over your credit limit and incurring additional fees. You can check your cash advance balance through your credit card account statement or by calling your credit card issuer.
Avoiding Unnecessary Cash Advances
Cash advances can be expensive due to high interest rates and fees. Therefore, it’s important to avoid taking out cash advances unless it’s absolutely necessary. Consider alternative options such as a personal loan, borrowing from friends or family, or using a 0% balance transfer credit card.
When you do take out a cash advance, make sure to pay it off as soon as possible to avoid accumulating interest charges. In addition, be aware of the fees associated with cash advances, such as ATM fees and cash advance fees.
By managing your cash advance responsibly, you can avoid unnecessary fees and interest charges and use this option as a last resort when you need cash quickly.
Additional Services and Features
UOB Specific Services
When it comes to cash advances on your UOB One Card, you can access extra cash conveniently and quickly. UOB offers emergency cash services that allow you to apply for instant cash through various channels, including digibank online and UOB/POSB ATMs in Singapore and overseas. With a maximum withdrawal amount of S$3,000 per day, you can rely on UOB for your urgent cash needs.
Emergency Cash Services
In times of unforeseen circumstances, UOB provides a reliable emergency cash service to help you manage unexpected financial needs. By utilising your credit card PIN, you can access emergency cash through ATMs, convenience checks, or bank tellers. This feature ensures that you have the support you need, whenever you need it, giving you peace of mind in challenging situations.
Frequently Asked Questions
What’s the thrill of getting instant cash with a credit card in Singapore?
Getting instant cash with your credit card in Singapore is a convenient way to access funds when you need them the most. You can withdraw cash from an ATM or over the counter at a bank using your credit card. This means that you don’t have to wait for a loan or other financing to come through. You can also avoid the hassle of applying for a new credit card or loan.
Can I really take out money from my credit card without paying extra?
While it is possible to take out money from your credit card without paying extra, it is important to note that most credit card issuers charge a cash advance fee. This fee is usually a percentage of the amount you withdraw, and it can be quite high. Additionally, interest is usually charged on cash advances from the day you withdraw the money until the day you pay it back.
What’s the secret to avoiding hefty fees on credit card cash withdrawals?
The best way to avoid hefty fees on credit card cash withdrawals is to avoid taking out cash advances altogether. If you need cash, consider using a debit card or withdrawing money from a bank account. If you must use a credit card, try to pay off the balance in full each month to avoid interest charges.
How quickly can I repay my cash advance to dodge high interest?
You can repay your cash advance as soon as you receive your next credit card statement. However, it is important to note that interest is usually charged on cash advances from the day you withdraw the money until the day you pay it back. To avoid high interest charges, it is best to pay off your cash advance balance as soon as possible.
Is there a way to get cash from my credit card online?
Yes, some credit card issuers allow you to get cash from your credit card online. You will need to log in to your credit card account and follow the instructions to request a cash advance. However, it is important to note that online cash advances may be subject to higher fees and interest rates than cash advances taken at an ATM or bank.
What are the typical charges when I use my DBS card for a cash advance?
According to POSB Singapore, the cash advance limit for DBS/POSB credit cards is capped at S$5,000, and there is no minimum cash advance withdrawal amount. The maximum withdrawal amount from a DBS/POSB ATM is S$3,000 per day. An 8% transaction fee or S$15, whichever is greater, applies for each cash advance transaction.
