As a Bank of America user, whenever you’ve got more savings left and are in need of urgent funds, a Bank of America cash advance fee might be the next viable option.
While it’s an extremely expensive way to borrow, it can be a viable option when you have no other means to access cash.
There is a couple of ways you can get cash using your Bank of America credit card if you’re a Bank of America user.
In this article, we discuss all you need to know about the Bank of America cash advance fee, what a cash advance is.
We will also look into how to get one should you ever find yourself to be in a situation where a cash advance is an option.
Read on to learn how to do it and what you should keep in mind before taking out cash from your credit card I.e. a Bank of America cash advance fee.
What is a Cash Advance?
First off, let’s start with this article on Bank of America’s cash advance fee by briefly discussing what a cash advance fee is.
A cash advance is a type of credit card transaction that allows you to borrow cash against your credit line.
In a way, it’s similar to getting cash from your debit card, but cash advance terms can make such transactions very costly.
Cash advances come with their own set of terms that are different from those of regular purchases.
Cash advance APRs are much higher than purchase APRs, and you don’t get a grace period on a cash advance, meaning interest starts to accumulate right away.
Plus, there are expensive fees to keep in mind when dealing with cash advances, like the Bank of America cash advance fee.
This is why it’s best to avoid getting cash from your credit card. Explore all other options before turning to a cash advance to avoid putting a strain on your budget due to snowballing interest and fees.
However, if you find that a cash advance is indeed the best option in your situation, there are several ways you can get a cash advance fee from Bank of America.
The How to Get a Cash Advance From Bank of America
Now that you’ve got a brief understanding of what a cash advance is, let’s dive into how you can get cash from Bank of America before we can look into what the Bank of America cash advance fee is like.
Different banks may offer different ways of getting a cash advance from your credit card but Bank of America offers four options for getting a cash advance. These include:
- Go to a Bank of America branch
You can request a cash advance in person at your local Bank of America branch. Make sure to bring your Bank of America credit card and a government-issued ID to verify your identity.
- Use an ATM
You can get a cash advance from your Bank of America credit card from any ATM that displays Visa and Mastercard logos.
You’ll need a PIN to use your credit card for this type of transaction – request it through your online account or call the number on the back of your card.
- Get a convenience check
Another option to get cash from your Bank of America credit card is to use a convenience check.
A convenience check works like a regular personal check that draws funds from your checking account, but the convenience check allows you to draw money from your credit line.
Banks sometimes mail convenience checks as a promotion, but if you haven’t received any from Bank of America, you can contact the issuer to request them.
- Deposit cash into your checking account
Probably the most convenient way to get a cash advance from Bank of America is to transfer funds directly into your checking account.
Head over to your online account to request a cash advance. The deposit normally takes up to three business days.
Alternatively, for an extra fee, you can use the same-day transfer option to send money to your Bank of America checking account.
Note, however, that not all cardholders are eligible to use the deposit feature. If you try to request a cash advance this way and get a message that the transaction can’t be completed, the issuer suggests calling in to discuss your options.
What to Consider Before Getting a Cash Advance
Now that you know how to get a Bank of America cash advance should you be in need of it, let’s now look at some of the important things to consider and to keep in mind when getting a cash advance.
While Bank of America makes it easy to get cash from your credit card, it’s important to be aware of how much a cash advance can cost you before you use this option.
Here’s what makes cash advances so expensive in different banks including the Bank of America cash advance fees.
- Cash advance fees:
For starters, there’s a fee for taking out a cash advance in the first place. You’ll pay either $10 or 3% of the transaction amount, whichever is greater if you’re using a direct deposit or convenience check.
If you’re using the same-day option to transfer funds to your Bank of America checking account
Well getting cash from an ATM or requesting a cash advance at a local branch, the fee will be $10 or 5% of the transaction amount, whichever is greater.
- High-interest rate:
The most dangerous part of taking out a cash advance is its APR.
At the time of writing, the APR for cash advances on Bank of America credit cards is 27.24%.
Considering there’s no grace period on cash advances, and the interest begins to compound immediately, this type of debt can get out of hand rather quickly if you don’t pay it off right away.
Note that some credit cards come with a significantly lower cash advance APR.
For instance, you might want to look into the PenFed Power Cash Rewards Visa Signature Card, which only charges a 17.99% APR on this type of transaction.
It’s still expensive, but a much better option for a cash advance. On top of that, the card doesn’t charge a cash advance fee.
Purchases Bank of America Consider as Cash Advance
Cash withdrawals aren’t the only transactions Bank of America considers as cash advances. Other transactions that fall in this category are:
- Bail bonds
- Casino gaming chips
- Foreign currency
- Lottery tickets purchased outside the United States
- Money orders
- Overdraft protection
- Person-to-person money transfers
- Same-day online transfers
- Traveler’s checks
Bank of America Cash Advance Fee
Now that you’ve got a brief knowledge of what cash advance is how it works and how you can get one, let’s now look into the Bank of America cash advance fee.
There are two fees and two interest rates for Bank of America cash advances, depending on the transaction.
- ATM, Over-the-counter, same-day online, overdraft protection, and cash equivalents cost A 5% fee of the amount with a $10 minimum. The average cash advance APR is 26.49% but it could vary between cards.
- Direct deposit and check cash advances cost A 3% fee of the amount with a $10 minimum. The average cash advance APR is 26.49% but it could vary between cards.
Example: A $500 ATM cash withdrawal comes with a $25 cash advance fee as soon as you make the transaction. Some ATMs may charge an additional $3 fee.
If you decide to pay off the balance after 30 days, you would accrue around $11 interest. Your $500 cash withdrawal now costs $539. If you make a direct deposit, your $500 can cost as low as $522.
Best time to Get Credit Card Cash Advance
A credit card cash advance is expensive in virtually every bank, a Bank of America cash advance fee isn’t any different.
If you use your credit card to take out cash at an ATM, you can usually expect to pay;
- A one-time cash advance fee, that is typically 3% of the amount withdrawn
- An ATM fee is often charged if your card is issued by a different bank than the ATM
- An interest rate that is much higher than your purchase APR.
Even worse, most cash advance transactions have no grace period, which means interest starts accruing immediately
For example, the BankAmericard Cash Rewards credit card charges a Bank of America cash advance fee of either $10 or 3% of the amount of each transaction, whichever is greater.
It then charges an interest rate of 25.24% on cash advances, compared to a range of 13.24% – 23.24% on purchases.
If you borrow $300 for 15 days, you could end up paying approximately: $10 for the cash advance fee, $4.50 ATM fee (based upon the average), $3 of interest for 15 days, and $17.50 in total to borrow $300 for 15 days.
Although $17.50 sounds expensive, it is actually a better deal than these two alternatives.
- Use A Bank Overdraft
Overdraft fees at banks are even more expensive. The average overdraft fee is $34, and it is typically charged per incident.
At Bank of America, you would pay $35 per transaction (up to four per day). After five days, you would be charged an additional extended overdraft fee of $35.
If you borrowed $300 for 15 days using a standard overdraft at Bank of America, you would end up paying $70 in total.
In this example, using your credit card cash advance feature would be cheaper than using the overdraft feature of a typical checking account.
- Visit a Payday Lender
Payday lenders can be even more expensive. According to the CFPB, the typical payday lender charges between $10 to $30 for every $100 borrowed.
A typical payday loan term is 15 days. If you borrowed $300 for 15 days using a payday lender, you would pay between $30 and $90 in total.
Ironically, payday lenders can be cheaper than overdrafts in some cases. But using a cash advance on a credit card is still the cheapest option.
How To Find The Cheapest Cash app Advance Credit Card
If you don’t like the Bank of America cash advance fee charged by the current Bank of America card you are using, you can always get an alternative credit card with better charges.
If you think you might have the need for a short-term loan in the future, it is better to shop for and find the cheapest credit card before an emergency happens. Some credit unions actually offer credit cards that do not charge a cash advance fee.
MagnifyMoney (where I work) recently did a market survey and found 20 credit cards from credit unions that do not charge a cash advance fee.
The best credit union on the list is PenFed. Not only won’t you be charged a cash advance fee, but the interest rates on cash advances are much lower than those offered by traditional banks.
For example, the PenFed Promise credit card has a cash advance APR range of 10.24% – 17.99%. To borrow $300 for 15 days at PenFed, the biggest fee would be the ATM fee.
To conclude, there are many ways to get a cash advance from a Bank of America credit card. However, it’s expensive especially when it comes to the Bank of America cash advance fee.
It’s best to always consider this option a last resort and work on building an emergency fund to avoid needing it in the future.