Mastercard

Unless you keep a credit amount on your card, and withdraw cash only to that limit -> then the cash advance is always something of a rip off.

You need to read up on the charges associated with each type of card.

OP - you took out a small loan today.

when you take out cash on a credit card (assuming your not in surplus) its a loan. you took out their money with the intention to pay it back later. Its actually the very definition of a loan.

under 5 euro is a bargain alert rather than a ripoff.

op - ECB interest rate isn't 0.00001%. that's factually incorrect.

"The European Central Bank (ECB) has raised interest rates by 0.75 percent, the largest single increase since its founding in 1998, which as a consequence brings the base interest rate for banks up to 0.75 percent. "The governing council took today's decision and expects to raise interest rates further because inflation remains far too high," bank president Christine Lagarde told press on Thursday (8 September)."

https://euobserver.com/green-economy/156004

Bank interest rates might still be relatively low but credit card interest rates can still be quite high, in the region of 20% APR. The €1.81 interest fee would put it in that ballpark. Cash advance fees are a thing with credit cards so I have always avoided that.

I'm sorry, I'm not trying to be rude, but it really doesn't look that way.

I don't think you do, because you then immediately say this...

As per my post above:

Without writing a huge book explaining how credit works and how costs (and, thus pricing) are calculated, just think of it this way - a euro is a euro is a euro! The very same bank will lend at < 3% for a mortgage, 4-6% for secured business lending, 8-10% for unsecured personal lending, 15% for authorised overdrafts (with additional fees/penalties for unauthorised) and credit cards (with additional fees/penalties for late payments). The deposit interest rate and the ECB refi rate is the same regardless off how a bank lends to you. But the other costs are drastically different across the products, hence the huge difference in pricing.

The Credit Card market is hugely competitive with a lot of non-banks also offering credit cards, thus the rates they offer them is as cheap as they can and still make a profit.

Yes, there will be a correlation so, as interest rates rise, so too would credit card interest rate (on top of the existing credit card rates)

Another way to look at it is => price = cost of funds + cost of running + cost of fraud + cost of bad debt + profit

The underlying interest rates impact the cost of funds. But, you still have the cost of running/fraud/bad debt as well as the profit. With credit cards, the cost of running/fraud/bad debt are the ones that have the big impact. They are a high volume, low value form of credit offering (thus, the high running costs) with massive fraud (both from the cardholder and criminals cloning etc) and bad debt levels (unstructured, unsecured, where customers who use them for borrowing are typically high-risk) compared to other forms of credit like structured, secured lending.