Changes to the 28 Degrees Mastercard Fee Structure

This month, GE Money made changes to the fee structure for the 28 Degrees Mastercard. I was first told about this card from a friend before I went travelling, and seriously, it is the best credit card for travel, whether overseas, or around Australia.

However, GE Money, from the start of 2014 will introduce a Cash Advance Fee. But the question is, do you get charged this fee when you withdraw cash from an ATM when your card has a positive balance?

From 28 Degrees Mastercard FAQ:

Will I be charged if I make a cash advance?
As of January 1, 2014, a cash advance fee of 3% of the cash advance or $4 (whichever is greater) will be charged to the account on each occasion on which you obtain a cash advance or make a cash equivalent transaction (except that if the cash advance is made by a direct transfer to a bank account nominated by you, this fee will not exceed $30 for that transaction).
Please note that some ATM operators may also charge an additional fee that will be deducted from your card balance. Not all ATM operators advise of this additional fee, or the amount, before you withdraw money from their ATM.

Does this fee only apply to withdrawing cash from ATMs?
This fee will apply to over the counter cash advances, withdrawals from ATMs or when a customer makes a cash equivalent transaction (e.g direct transfer to a bank account).

Will I be charged a cash advance fee if my card has a positive balance?
Yes, you will still be charged a cash advance fee if you withdraw cash from your 28 Degrees MasterCard even if the card has a positive credit balance. We do not recommend that you load your card into credit as this is not the intended purpose of the card.

What people do, and I used to do myself, is load my card up with a positive balance, and when overseas or in Australia, go to an ATM machine and withdraw cash, free of charge. However, when you read above (especially the last FAQ), it states you will now get charged 3% or $4, which ever is greater.

Not to mention, for those who don’t preload their card, they still have to pay interest on cash advances which is at 20.99% 

Will I be charged interest on my cash advance fee?
Interest will be charged on the cash advance fee on a daily basis from the date of the withdrawal. If your account is in credit, you will not be charged interest on the cash advance fee.

But, looking further into it, let’s define a few things:

What is a cash advance? I couldn’t find a definition by the RBA, so if you find one, please let me know. But from Princeton.edu,:

cash advance: (an amount paid before it is earned)

So if you load your 28 Degrees card with a positive balance (I.e you’ve already earned the money, you gave them the money, so they now owe you money), it’s not defined as a cash advance.

Another definition, straight from 28 Degrees FAQ page:

What is a cash equivalent transaction?
A cash equivalent transaction means:

1. a purchase of traveller’s cheques or money orders;
2. a purchase of casino gambling chips or tokens;
3. a funds transfer debited to your account (except balance transfers);
4. a purchase of, or loading of value on, a pre-paid or stored-value card or facility; or
5. a transaction made through bill payment facilities where the supplier or financial institution does not accept direct payment by credit card (for example payment of bills through a third party or over the counter at a financial institution); or
6. other transactions that we notify you will be treated as cash equivalent transactions.

Where is withdrawing cash from an ATM? You could probably define “a funds transfer debited to your account” as a transfer of funds can be defined withdrawing cash, but that could also mean purchases of products, therefore, every purchase requires the new fees to be applied.

Therefore, based on the FAQ, withdrawing cash is NOT a cash advance, nor is it a cash equivalent transaction. However, 28 Degrees Mastercard will apply these fees.