What are credit card cash withdrawals and why can they look risky?
A credit card cash withdrawal (often called a cash advance) is when you use your credit limit to get cash rather than paying a retailer.
In the UK, these usually come with a cash fee, a higher interest rate than purchases, and no interest-free period - interest starts from day one, often calculated daily. That’s why even small withdrawals can get expensive fast.
What counts as a “cash” or “cash-like” transaction?
It isn’t just ATMs. Many UK card issuers treat the following as cash advances (wording varies by card T&Cs):
• ATM withdrawals in the UK or abroad
• Buying foreign currency/travel money (in branch or online)
• Loading or topping up prepaid “holiday cards”/travel money cards
• Money transfers from your credit card to a bank account
• Paying bills at a bank/post office counter
• Gambling/lottery/betting transactions
• Buying gift cards or some prepaid cards
If your card treats it as “cash”, the cash-advance fees/interest kick in and a cash withdrawal marker can appear on your credit file.
Why can this hurt your credit score or applications?
• Higher balances = higher utilisation. Cash advances raise your balance, which can push up your credit utilisation — a common reason for scores dipping.
• It can look like stress borrowing. Frequent cash markers can make you look higher risk to lenders because they can’t see how the money’s spent and cash advances are often linked to short-term need.
• Costs pile up quickly. Fees plus a higher, immediate interest rate mean you repay much more than you took out — that can make it harder to clear your balance, which in turn keeps utilisation high.
A note on “holiday cards”
Travel/“holiday” money cards are often marketed around easy cash abroad. Loading them with a credit card, or buying foreign currency with a credit card, is usually treated as a cash advance by many issuers - so you still get the fees, higher interest and the cash marker. If you want to use a travel card, top it up from your current account (debit), not a credit card.
Better ways to handle it
• Avoid using credit for cash if you can. Use a debit card for cash withdrawals.
• If you must, keep it tiny and repay immediately to limit fees and interest.
• Check your card’s T&Cs so you know what they class as “cash” or “cash-like”.
• Keep utilisation modest overall and pay on time - that’s what helps your score recover.
If a cash withdrawal marker doesn’t look right, ask your card provider to review it. If they won’t fix an error, raise a dispute with Equifax via our chat and we’ll help you get it sorted.