To calculate interest on a cash advance, add the issuer’s upfront transaction fee to the amount you withdrew, divide your cash advance APR by 365 to get a daily rate, and multiply that daily rate by your balance for every day until the advance is paid off. Interest starts the day the money leaves the ATM, so the day count runs from the transaction date straight through to the day your payment posts. There is no grace period and no way to avoid interest by paying the statement in full.
The short formula looks like this:
(Withdrawal + Transaction Fee) × (APR ÷ 365) × Days Outstanding = Approximate Interest
That gives you a close estimate. The exact figure runs a few cents higher because interest compounds daily, which the sections below walk through.
The Three Numbers You Need
Every calculation uses the same three inputs, all available on your monthly statement or in your cardholder agreement.
- Your cash advance APR. This is the annual rate your issuer applies specifically to cash advances, and it is almost always higher than your purchase APR. As of early 2026, the average cash advance APR at major banks is roughly 28.56%, while credit unions average around 19.73%.
- Your daily periodic rate, which is the APR divided by 365. A few issuers divide by 360 instead, which produces a slightly higher daily rate, so check your agreement.1Consumer Financial Protection Bureau. What Is a Daily Periodic Rate on a Credit Card
- Your principal balance, meaning the cash you withdrew plus the transaction fee the issuer added at the moment of the advance.
The daily periodic rate does the real work. Your issuer multiplies it by your balance at the end of each day, adds that interest to the balance, and runs the next day’s calculation on the slightly larger number.
Step 1: Add the Transaction Fee to Your Balance
The instant a cash advance is processed, your issuer charges a one-time fee. The fee is typically 3% to 5% of the amount withdrawn, or a flat minimum of around $10, whichever is greater. On a $500 advance with a 5% fee, the percentage calculation produces $25, which beats the $10 floor, so the fee is $25.
That $25 gets added directly to the cash advance balance. Your interest-bearing starting balance is $525, not $500, which means you pay interest on the fee itself from day one. The fee is also fixed: repaying the advance the next day does not reduce it. Even a one-day advance costs you the full transaction fee.
Step 2: Convert Your APR to a Daily Rate
Annual rates do not plug directly into a cash advance calculation because the interest compounds daily. Divide your cash advance APR by 365.1Consumer Financial Protection Bureau. What Is a Daily Periodic Rate on a Credit Card
At the current bank average of 28.56%:
0.2856 ÷ 365 = 0.000782
The decimal is small, but it hits your balance every day the advance is outstanding. Over a month, the fractions add up. Confirm whether your issuer uses 365 or 360 before relying on the number.
Step 3: Multiply the Daily Rate by Your Balance
Multiply the daily periodic rate by your outstanding balance to get one day’s interest. Using the $525 starting balance:
$525 × 0.000782 = $0.41 on day one
That $0.41 folds into the balance. On day two you owe $525.41, and day two’s interest runs on the new figure. The effect on any single day is tiny, but it grows the longer you carry the balance. Over 30 days, compounding adds a few cents compared to simple interest. Over several months, the gap widens.1Consumer Financial Protection Bureau. What Is a Daily Periodic Rate on a Credit Card
For a quick estimate without compounding each day by hand, use:
Balance × Daily Periodic Rate × Number of Days = Approximate Interest
The result slightly underestimates the real figure, but for repayment periods under 30 days the gap is usually less than a dollar.
Why There Is No Grace Period
Regular credit card purchases come with a grace period of at least 21 days, during which you owe no interest if you pay the statement balance in full. Cash advances do not. Interest begins the moment the funds leave the ATM or the transaction posts.2Consumer Financial Protection Bureau. Can I Withdraw Money From My Credit Card at an ATM
You cannot work the billing cycle the way you can with purchases. Take an advance the day before your statement closes, pay it the day after, and you still owe interest for every one of those days. When you estimate your cost, count every calendar day between the transaction date and the date your payment posts.
A Complete Worked Example
For a $500 cash advance carried 30 days, at 28.56% APR with a 5% transaction fee:
- Transaction fee: $500 × 0.05 = $25
- Starting balance: $500 + $25 = $525
- Daily periodic rate: 0.2856 ÷ 365 = 0.000782
- Interest over 30 days (simplified): $525 × 0.000782 × 30 = $12.32
- Total cost: $25 + $12.32 = $37.32
That $37.32 is the price of borrowing $500 for one month. With daily compounding, the real figure lands a few cents higher. Hold the same balance for 90 days and interest alone climbs to roughly $37, pushing total cost above $62. Every added day costs money, and the fixed fee makes short advances expensive relative to what you borrowed.
How Payments Are Applied If You Carry Other Balances
If your card holds both a purchase balance at, say, 22% APR and a cash advance balance at 28%, federal law requires that any amount you pay above the minimum be applied to the highest-rate balance first.3Office of the Law Revision Counsel. 15 USC 1666c – Prompt and Fair Crediting of Payments
The minimum payment itself is different. Your issuer can apply the minimum to whichever balance it prefers, and many apply it to the lower-rate balance because that keeps the higher-rate balance earning interest longer. Paying only the minimum lets the cash advance barely shrink while your purchase balance gets cleared first. To actually knock down the cash advance, pay well above the minimum so the excess is applied by law to the high-rate balance.