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Instant Cash Advance
We’ve all been in a tough position where we need money quickly.
Maybe there’s a leaking pipe in your home, an unexpected medical bill, or you need to fly home for a family emergency.
Sometimes, even a small amount of cash— enough to cover part of your rent or a week’s worth of groceries— can be lifesaving when you suddenly find yourself with a loss of income or too many surprise expenses.
When this is the case, instant cash advances can offer some relief.
In this post, we’re going to discuss what an instant cash advance is, what the different methods are for receiving cash instantly, who is eligible, and the pros and cons of different instant cash solutions.
What is instant cash advance?
An instant cash advance is any kind of short-term loan from a lender that provides quick access to cash funds.
In many cases, instant cash advances are for small amounts of money, ranging from $100-500, but they can be for larger sums of money (like $1,000-5,000).
They are not conventional loans, which typically have extensive application processes and may have payback periods ranging from six months to multiple years. Instead, the application processes are often relatively quick, asking for basic information like name, income, and your bank account.
Because the application and review processes are both much faster and less stringent, your cash also comes much faster than other types of loans. You may receive funding within an hour, or by next-day at the latest. The money will appear directly in your bank account for you to use as you see fit.
How can I borrow cash instantly?
Credit card cash advances are one of the most popular and easily accessible types of instant cash advances. And if you hear people discuss “instant cash advances,” they’re most likely to be referring to credit card cash advances as opposed to payday loans or merchant cash advances.
Credit card cash advances allow you to withdraw cash from your credit card. So instead of borrowing to pay for a purchase from a merchant, you’re borrowing cash straight from the credit company instead.
You can, in many cases, go to a bank or ATM to withdraw cash from your credit card if eligible. You can also request a cash advance online through your credit card lender and have approved funds sent through a convenience check, or— in some cases— deposited into an associated account.
The process can be similar to withdrawing cash from your debit account. In the case of a credit card cash advance, however, you’re borrowing and withdrawing money that isn’t yours.
There’s typically a transaction fee involved, and it often comes with a high APR, which is often even higher than the APR associated with using the card in general. And unlike standard credit card purchases, interest starts accruing the second the cash advance hits your account.
Most credit cards offer cash advance options to existing clients, so you can take a look on your cards’ websites to see what the instant cash options are and what terms are associated with them.
How to can I get a credit card cash advance in person?
To get a credit card cash advance off your card, go to a local ATM or bank.
You can scan your card, select an option (or explain to the teller) for a cash advance, and then enter in the requested information, like a card pin or zip code. You’ll receive cash in hand, just like you would if you were making a withdrawal from a debit card.
How much cash can you withdraw using a cash advance?
This is one of the most important questions when considering a credit card cash advance: How much can I borrow?
The amount you can borrowwith a cash advance is typically based on your card’s spending limit and how much money you currently owe. Users with higher credit scores are often able to borrow more against their spending limit than those with lower credit scores.
It’s uncommon for credit cards to allow people to borrow their full available spending limit through a cash advance alone. If, for example, you have a credit limit of $5,000 and no other charges on your credit card, you may be approved for a $1,000 cash advance.
Cash advance terms
Credit card cash advances will always detail out the specific terms associated with them before you take out the advance. You can view them online, and any online withdrawals will walk you through the terms and require you to agree before you can complete the process.
The terms for a credit card cash advance will typically include the following:
- Your cash advance borrowing limits
- The APR that you’ll pay for the cash advance
- The transaction fees you’ll pay for the cash advance
There are no terms or requirements about how you’ll use the money. And because it’s on a credit card balance, there isn’t a date that you have to pay the balance off, though you’ll continue to accrue interest on the total balance associated with the cash advance at the high APR.
Who is eligible for an instant cash advance?
If you have a credit card, there’s a good chance that you may be eligible for a cash advance if you meet the following criteria:
- You’re 18 years of age or older
- Your account is in good standing and not delinquent
- You’ve made regular payments on your existing card balance
- Your credit score is in good shape (or at least decent shape)
- You haven’t reached— or come close to— the spending limit on the credit card in question
Eligibility will depend on each credit card lender, but many have specific pages on their sites available with this information. If you can’t find it, or are unsure if you’re eligible, reach out to your card companies if you have any questions.
Does a credit card cash advance impact my credit score?
The answer to this question is both yes and no.
The act of taking out a credit card cash advance does not impact your credit score in and of itself the same way taking out a loan or even applying for a credit card could.
That being said, the credit card cash advance can impact your credit, because the balance withdrawn counts towards your credit utilization.
Your credit utilization is the amount of revolving credit you’re currently using against your limit. So, it looks better to credit agencies like FICO if you’re only borrowing $100 against a $5,000 spending limit instead of borrowing $4,000 against a $5,000 spending limit.
Since credit utilization is a major factor with credit agencies— and particularly the commonly-reviewed FICO credit score—, this is important to consider, especially if you plan on carrying the balance for a long period of time. Keep in mind that credit utilization makes up 30% of the FICO scoring model, so you may not want to use much credit if you’re considering a substantial purchase, like taking out a mortgage or a car loan.
The pros and cons to cash advances
Cash advances, like all forms of funding (and especially short-term instant cash loans) have both pros and cons. It’s important to weigh out both the advantages and disadvantages before taking out a cash advance to decide if it’s right for you.
Let’s take a look at both.
The pros of credit card cash advances
The pros of credit card cash advances are typically highly appealing, offering quick access to flexible funding. Let’s take a close look at the advantages in-depth.
Access to flexible funding
Credit cards are great, but they aren’t always a solution for every purchase.
You may need cash to pay for something that you can’t cover with a credit card. Examples may include:
- A utility bill
- Specific purchases that don’t accept credit cards, like adopting a pet or paying a handyman
- Cash-only venues or vendors
In these cases, having quick access to cash is essential, especially because you may not always anticipate needing cash in advance if it was an unexpected expense or you didn’t realize that it was cash-only.
Sometimes, vendors or merchants may also offer a discount for customers who pay through cash instead of a credit card. The savings can be significant depending on the overall cost.
You get money fast
The ability to walk into a bank or to stroll up to an ATM and receive instant cash in-hand (or in your account) immediately is an enormous advantage.
Many more conventional funding methods can take weeks or months to get through the approval process, and then you still need to receive funding. Other forms of short-form funding may even take several days for you to receive the cash, and depending on the situation, that may be too long or cutting it close— especially if an issue pops up somewhere in the process.
There’s no need to seek out an online lender or to ask friends or family for some short-term help (and potentially burning or hurting those relationships in the process).
You can check out your cash advance terms online— or by calling the card company— and then go to your nearest ATM for instant money in hand.
It’s easy to track
For many people, keeping track of additional loans or upcoming payments can be difficult. It may be easy to forget that you need to keep $400 in your account leading up to a payday loan payment withdrawal, which can land you in a world of hurt with extra penalty fees if you forget.
The ability to add on a cash advance to an existing card balance and track the loan in one dashboard can be easier to manage, as it’s all through one lender.
You can take longer to pay it off than other short-term funding options
Credit cards— and credit card cash advances— are revolving lines of credit. You pay interest on what you’re using, and as long as you’re making the minimum monthly payments, you can pay it off as you see fit (as long as you’re okay paying the interest, of course).
Other cash advance options like payroll loans or payday loans typically have strict terms with firm— and non-negotiable— payback periods. You’ll have a payday loan’s payment automatically withdrawn from your account, typically within a week or two after you took out the cash.
While you don’t want to take years to repay a cash advance, because the APR is high, sometimes we all need just a little bit of flexibility while we get our heads above water— a credit card cash advance can give you that option.
The cons of credit card cash advances
While the pros are pretty appealing, there are some significant downsides to using credit card cash advances. It’s crucial that you consider the downsides and what they mean for you before taking out a cash advance.
Cash advances can be expensive
This is easily the biggest downside to cash advances, and it’s one to take seriously.
Instant cash advances through credit cards come with high fees attached. These fees may include:
- A transaction fee every time you withdraw cash, which is typically 3-5% of the total balance withdrawn (so up to $12.50 for $250)
- An ATM or bank fee, especially if using an out-of-network provider
- High APR, which almost always costs more than even standard borrowing from your credit card, and may easily reach 30% APR
These fees can become high quickly. Borrowers who are consistently in a tight spot can find themselves in a hole that they struggle to get out of, especially since interest starts accruing the second you make that withdrawal.
They can impact your credit score
While taking out a cash advance alone does not impact your credit score, the credit you’re using impacts credit utilization, which can lower your score.
This is not necessarily a major disadvantage short-term, as long as you’re not actively trying to leverage your credit for a major loan.
There’s no grace period
Most credit cards give a grace period (typically around 20 days) before you’re charged interest on a purchase. Cash advances, however, start accruing interest from day one, so there’s no month-long grace period to pay off the balance before you start having to pay fees.
You lose credit card protections & benefits
When possible, it may be ideal to pay for purchases with credit cards directly instead of paying with cash advances that came from the cards themselves.
Credit cards do offer protections and certain benefits. If, for example, you accidentally purchase a counterfeit item, you can file a chargeback with your credit card company. None of those protections apply once you hand over cash to someone.
Alternatives to a credit card cash advance
Still looking for instant access to cash but aren’t sure that an instant cash advance through credit cards is the right option?
You can take a look at a few different alternatives that can give you quick access to funding.
If you need extremely short-term funds for a specific window of time— say, two weeks, until your next paycheck comes in—, payday loans could be an option to consider.
Payday loans are a near-instant cash advance option that allows you to apply online, be approved, and receive cash funds in your bank account incredibly quickly— sometimes even same-day.
When you accept the terms of the loan before receiving funding, you’ll see what fees are associated with the advance and when it will be repaid. In many cases, payday loans will automatically be withdrawn from your bank account within a week or two weeks after you withdraw the funds.
Payday loans, like credit card cash advances, involve high fees, which may range from $10-30 for every $100 borrowed. In most cases, you’ll receive your initial cash with those fees already withdrawn from the total balance.
Merchant cash advances
Merchant cash advances are designed specifically for businesses, but if you’re running a business and need instant cash, this is a good option to consider.
Business owners can receive lump sums of funds in exchange for a portion of future credit card sales. The advance is repaid over time by taking a flat percentage of the business’s credit card sales until the agreed-upon amount is paid off.
Merchant cash advances, like other types of cash advances on this list, can offer quick, near-instant access to cash for borrowers, but it typically comes with high fees. And, for businesses that may have cash flow concerns or clients that don’t pay regularly through credit card, it may not be a good option.
Some employers may offer payroll advances. These are short-term loans that allow employees to receive funding now, which is paid out of their future earnings.
Some employers may allow you to pay back the balance over several pay periods, while others may require that the full balance is paid in full as immediately as possible using the entirety of your paychecks as needed.
Depending on your employer, payroll advances may offer more generous terms and lower APRs, and the funding can often be available quickly. Some people, however, may be concerned or embarrassed about asking for a payroll advance from an employer.
If you’re interested, talk to your human resources (HR) department. If there’s a payroll advance program, they can provide the details, including whether or not you’re eligible. Some companies may require that you’re salaried or that you’ve worked with the company for a certain length of time before becoming eligible.
One thing to note is that if you are fired or quit your job, you’ll still be on the hook for that loan. If your job status is rocky, it’s probably best to look at other funding options.
Put other purchases on credit cards
If you have $500 in cash and $500 available on a credit card and you need to pay $500 in rent, you can put the rest of your $400 purchases on the credit card.
Putting what you can on a credit card so that you can pay the cash you have where it’s needed can be a helpful strategy for borrowers in a tight position. It allows you to take advantage of the grace period, consumer protections, and slightly lower APRs while still having the cash you need for other purchases.
Being strategic about how you spend money and what methods you use may help you avoid credit card cash advances altogether, which can save you on the transaction, ATM, and high-interest fees.
Conclusion: is a credit card cash advance right for me?
A credit card instant cash advance is quick, easy, and highly convenient. It’s easy to manage and track, and if you’re okay paying for the convenience, it can be a good short-term solution.
Make sure that you’re weighing your options before withdrawing funds and that you understand exactly what the associated fees will be. Any credit card company will have representatives happy to walk you through this if you have any questions.
Keep in mind that if you have some time to wait, other conventional forms of funding like personal loans or home equity lines of credit can provide larger sums of cash and often for substantially lower interest rates with longer repayment periods. If you need more cash or longer repayment periods, these may be good avenues to consider.