Log out
Ever heard of credit card cash advances and wondered what they are? When you’re strapped for cash this feature sounds particularly tempting. But what is it and is it right for you?
Looking for a new credit card? Check out our favorites.
Read on to learn how cash advances from credit cards work, how much they cost, and other options you have to get cash fast.
1. What is a Cash Advance?
A cash advance means that you access money directly from your credit card. It is basically a short-term loan that you do not have to apply for. You simply borrow money against your credit limit. And they are fast! You can withdraw cash directly from an ATM or bank teller and have it immediately. Cash advances also do not require a credit check since you already went through that process when you applied for the credit card.
As a Bonus: Set up direct deposit with Albert Cash and get your paycheck up to 2 days early. That’s a perk that matters.
2. Why Use a Cash Advance?
A cash advance can give you access to money quickly when emergency expenses pop up and you don’t have enough in your bank account to cover them. They are convenient and let you access money immediately without having to apply for a loan or dig into your savings or retirement fund. If you have poor credit or no collateral to borrow against it may be difficult to get the loan you need. A cash advance is easy. All you have to do is go to the ATM or local bank and withdraw cash.
As a Bonus: We have a personal loan solution for you. Apply online with Explore Credit to secure a loan of up to $2,000, and get the funds in your account in as little as two business days!
3. How Do Cash Advances Work
There are several ways to get a cash advance with your credit card.
ATM
If you have a PIN for your credit card simply go to an ATM and withdraw money. If you don’t have one, call your card issuer and request one. It may take a few days to get a PIN and there are often limits to how much money you can withdraw.
Local Bank
Visit your bank and request a credit card cash advance. It does not have to be the same bank as the one who issued your credit card.
Check
If you’ve been given checks – typically called convenience checks – by your card issuer you can write one and name yourself as the payee. Then cash it or deposit it to access the funds.
As a Bonus: Advance the money you need with no credit check or late fees. It takes only minutes to download the Dave app. Get up to $500 in 5 minutes or less.
New
4. What Makes Them Expensive?
Cash advances tend to be more expensive than traditional loans or credit card purchases. They usually come with high fees typically 3% to 5% of each request. Plus the ATM or bank may charge an additional fee. They also have higher interest rates than if you use your credit card for regular purchases. APRs for cash advances range from 17.99% to 29.99%. Lastly, there is no grace period which means that you will start accruing interest from the moment you withdraw the cash. This is different from when you make a credit card purchase where you have at least 21 days to pay your balance before it accrues interest.
As a Bonus: Join 4 million+ users who get a cash advance up to $250, build credit, and save with Brigit. No credit check required. No interest.
5. Is a Cash Advance a Good Option for You?
Before you decide to take out a cash advance assess your financial situation and ask yourself: Can I cover the expense through other means? Do I have a repayment plan? What are the costs? A cash advance can be a good choice if you can repay the money quickly. Check with your credit card issuer so that you know the fees and interest rates that go along with cash advances from them. This will help you make an informed decision.
As a Bonus: Unlock a $1,000 spending limit with no credit check, no interest, and no fees! It’s all possible with Perpay.
6. Alternatives to a Cash Advance
If a cash advance doesn’t seem like the best fit for your needs or you’re concerned about the costs, there are alternatives.
- Borrow from friends or family
- Apply for a personal loan
- Cash advance apps like Dave
- Pay bills with your credit card
- Negotiate a payment plan
- Take out a Retirement Account Loan
These options are less costly than a cash advance though they may not be as immediate.
As a Bonus: Thought you were out of options? Think again! Check here for a personal loan up to $50,000 from Upgrade.
Final Thoughts
Cash advances are a convenient way to access cash fast if you are in a pinch. The problem is that credit card cash advances are costly. If you choose to go down this path, be sure to pay off the cash advance as soon as possible to avoid interest charges piling up. Review the potential costs and consider possible alternatives, like cash advance apps, to make the right choice for you.
Cash advances from apps are often a cheaper solution for fast cash since they tend not to charge any interest or late fees. For more information, read 3 Cash Advance Apps That Cover You ‘Til Payday. If you’re in a tight financial spot and need a quick way out, explore all your options before reaching for your credit card.
