For me this added up to between $100/month and $150/month each for several different months in which I had a cash advance even though I always paid off the balance in full every month. These interest changes were often as big as the whole value of the cash advances I made which were between $100 & $400. In my opinion this is a sneaky, despicable practice. FYI, I didn’t even know I was making cash advances at the time.

The “cash advances” that I made were from using my card to make several relatively small western union transfers to a relative. Apparently these transaction are considered cash advances, which isn’t unreasonable in retrospect. What was unreasonable were the charges for interest for other purchases even though the entire credit card balance was paid off in full every month.

Unfortunately I didn’t read my statements carefully for several months in a row, and when I figured out what was going on the citi representatives only offered to refund the last month’s interest charge. I then promptly cancelled the card.

Andrew: Did you check that your $10 transaction was during a period of waived transfer fees? If not, that might explain the fee.

Jim and Steven: In order to get cash back with your purchase, your card must be a credit card that can also be used as a debit card (which is why after you swipe at the register, you must choose to process the transaction as either credit or debit). To my knowledge, these cards only exist only in the U.S. If you happen to be from a different country, I don’t think the advice of going to a grocery store and getting cash back with your small purchase is applicable, or for that matter, possible.

It’s because banks are geared toward exploiting consumers in this manner that Obama signed to make credit limits firm. With Citibank for example, the credit limit is currently meaningless – consumers are free to spend well over the limit, and there’s no mechanism to stop them from getting in over their heads.

Although I see what drives the question, because the card network must have a way of charging the card issuer. Normally there is a “transfer fee”, which is often the same for cash advances as it is for balance transfers. I suspect that’s where visa profits, and in the cases where there is a promo offering no transaction fees, the issuing bank is simply eating the fee, and choosing not to pass the fee on to the customer (because they’ll make that back in interest from most of the card holders most of whome don’t know the trick of loading a credit on their acct).

Anyway, Cap One charged no fee of any kind when I was pulling out cash advances as a means for currency exchange. The whole transaction was effectively free.