Is cashback the same as cash advance?

Woodyrocks

Could someone please explain the difference or are they the same thing?

I know it is a bad thing to use your CC to get money out of the cashpoint and for the same reason I have always declined cashback at the supermarket but am I getting the two confused

balmk

Hi

The difference are as follows:

"Cashback" - availible on DEBIT cards only. At supermarkets they will ask you if you want cashback when paying for your goods by debit card. It can be handy as it means that you don't need to go to the cashpoint. As long as you have sufficient funds in your current account, and you need to have some cash on you, this is a simpler way of getting cash rather than making a seperate journey to the cash point.

"Cash Advance" is when you use your CREDIT card to obtain cash at a cash point rather than using the card directly at a retailer for purchasing goods or services. This is not good. Cash Advances are usually charged at a considerably higher rate of interest than purchases, with the interest charged daily from the moment that you withdraw the cash. The cash advance transaction is also usually the last transaction to be paid off .E.g. you have a new card and take £100 cash advance. You then buy goods for £100 using the card. Any payment that you make towards the balance owing will taken off the £100 card transaction, leaving the cash advance accruing interest at a higher rate. Your card issuer will give you information on how payments are allocated to your account.

In short:

Cashback - OK, if you need to have some cash in your wallet and you have availible funds

Cash Advance - Use with caution, check your card Terms & Conditions, and really think about it before you use it

moneyuser

Not the same.

The type of cash back you mention is only available on debit cards. It is ok do this at a checkout on a debit card and is just like withdrawing cash from an ATM.

Cash advance is using your CC to withdraw cash from an ATM. This is a no no and you will get charged 26% + interest from the day you make the withdrawal.

Another type of cashback is when you use your CC to pay for goods and get rewarded for doing so. Read this for further info

http://www.moneysavingexpert.com/cards/cashback-credit-cards

Woodyrocks

Thank you both so much. Everything is illuminated