Do Balance Transfers and Cash Advances Earn Rewards?
This guide explains why these transactions earn nothing, the fees they carry, and why a cash advance in particular is best avoided.
Why they earn nothing
Credit card rewards are designed to reward spending at merchants, so the card only pays out on purchases. A balance transfer simply moves debt from one card to another, and a cash advance hands you cash, neither of which is a purchase. The issuer categorizes them separately, and rewards do not apply.
The fees they carry
Beyond earning nothing, both cost money. A balance transfer usually charges a fee of a few percent of the amount moved, which can still be worth it if you are escaping high interest. A cash advance charges its own fee on top of a higher interest rate.
Why cash advances are the worst deal
A cash advance is uniquely expensive because it has no grace period: interest starts accruing the day you take it, at a rate usually higher than your purchase rate, with no chance to avoid it by paying at the due date. Between the fee, the immediate interest, and the lack of rewards, it should be a genuine last resort.
- Rewards are earned only on purchases, not balance transfers or cash advances.
- Balance transfers charge a fee, usually a percentage of the amount.
- Cash advances charge a fee and start accruing interest immediately.
- Cash advances have no grace period, unlike purchases.
- Treat both as tools with a cost, not a way to earn.
Frequently asked questions
Related reading
