A finance charge on a cash advance usually consists of two parts: a charge for the cash advance and a charge for interest on the cash advance. Most credit car companies do not offer a grace period on cash advances, so you will start accruing interest on the cash advance from the day you take the money. In addition, most credit card firms require you to pay off other lower-interest charges first before paying off cash advance first. Since the charges are significantly larger than you would incur for a normal charge, cash advances on credit card accounts should be used as a late resort.
Instructions
1. Calculate the cash advance fee. Most cards charge a fee between 2 and 4 percent of the advance, or a minimum flat rate, such as $10, whichever is lower. For example, if your card charged 3 percent or $10, and you got a cash advance of $100, you would be charged $10, because the flat fee is greater than the 3 percent. However, if you took a cash advance of $500, you would be charged $15.
2. Determine the cash advance interest rate and how many days interest has accrued on your cash advance.
3. Calculate the interest on the cash advance by dividing the annual interest rate by 365 and multiplying it by the number of days that passed before you paid off the cash advance. Then multiply that by the amount of the cash advance. For example, if you had a $500 cash advance at 20 percent and you didn't pay it off for 30 days, your interest charges would be $8.22.
4. Add the cash advance fee from step 1 to the interest rate charges from step 3 to find the total finance charge of your cash advance.
