Which transaction typically incurs the highest charges for cardholders?

Cash advances typically incur the highest charges for cardholders due to several factors associated with this type of transaction. Unlike regular purchases made using a credit card, cash advances often come with steep fees and higher interest rates that begin to accrue immediately.

When a cardholder takes a cash advance, they are essentially borrowing funds from their credit availability rather than making a purchase. Many credit card issuers charge a cash advance fee, which can be a fixed dollar amount or a percentage of the amount withdrawn. Additionally, interest rates on cash advances are usually higher than those for standard purchases, and the fact that interest accrues without a grace period means that costs can increase rapidly.

In contrast, online purchases, in-store purchases, and recurring payments usually involve standard purchase interest rates and may have lower or non-existent fees associated with them, making cash advances stand out as the transaction type that typically incurs the highest costs for cardholders.