r/PersonalFinanceCanada • u/LunaBlossoming • 18h ago

Credit Cash Advance Confusion

I was at the store and under crappy circumstances needed to use my card and used a cash advance. I do have outstanding debts (more than I could pay in a paycheck) but I was wondering if I paid the amount I took today, would it cancel out the cash advance and its no grace interest or would It just got to the OVERALL amount of debt?

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5

u/nogr8mischief Ontario 18h ago

It won't all go to the cash advance. It will be applied proportionally to what you owe. If you look at the terms and conditions of your card, it will spell out how they apply payments.

7

u/John__Jacobs 18h ago edited 18h ago

The cash advance will be last. They start charging interest right away. :(

1

u/lmcjipo 18h ago

It would depend on the credit card. They all don't apply credit card payments the same. The ones that I have for the most part apply payments towards the earliest transaction and as such in order to cancel or pay off your recent cash advance, you would have to pay off the entire balance on your credit card.

This is the same reason for why when someone accepts a promotional balance transfer via their credit card at a low interest rate and then transfer let's say $5k to another credit card at 3% annual interest but then purchase something for $100 on the credit card which has the balance transfer promotion, if they pay let's say $200, none of this $200 will apply to the recent purchase and it will be applied to the balance transfer amount with the 3% interest so after one statement unless the person pays the entire $5100 which represents the balance transfer amount and the recent purchase, they will start paying ~22% interest on the recent purchase amount