The best cash advance credit card will allow you to borrow what you need, provide flexible payment options, and have minimal fees.
A cash advance can help you get money in your hand today. Borrowers can withdraw cash with any credit card, but what is the absolute best cash advance credit card? Certain credit card companies offer better rewards and repayment terms than others, so what should you look for? Learn how to pick the best charge card and how to qualify in this informative article.
What Is a Cash Advance Credit Card?
A credit card cash advance is a quick loan option available to credit cardholders. You can borrow money against your credit limit and pay it off at your convenience. Unlike traditional loans, credit cards do not have a strict repayment schedule, although you will still have a minimum payment due each month. You can pay as little or as much as you want each month as long as you pay at least the minimum.
The amount you can get depends on your available balance and the credit card company. If you’re new to credit cards, it’s essential to know the difference between your current balance and available balance. Your current balance is the amount you have spent with the credit card, while your available balance is how much money you have left.
Your credit card issuer will only allow you to withdraw a small percentage of your total credit limit. The cash advance limit you have depends on your total credit limit. A higher limit allows you to withdraw more cash, while a smaller limit may only provide you with a few hundred dollars. You can find the maximum credit limit amount by reading your card’s terms and conditions.
Here’s a list of the top credit cards and their features:
- Chase Sapphire Preferred® Card – Borrowers earn 2x points on travel and dining, and 1x points on all other purchases. The annual fee is $95.
- Discover it® Cash Back – Borrowers earn 5% cash back in rotating categories, such as grocery stores, gas stations, restaurants, and online shopping. All other purchases provide 1% cash back. There is no annual fee.
- Citi® Double Cash Card – Borrowers earn 2% cash back on all purchases (1% when you buy, 1% when you pay). There is no annual fee.
- Capital One Venture Rewards Card – Borrowers earn 2x miles on every purchase and 5x miles on hotels and rental cars booked through Capital One Travel. The annual fee is $95.
- American Express® Gold Card – Borrowers earn 4x points at restaurants, 4x points at U.S. supermarkets, and 3x points on flights booked directly with airlines or via AmexTravel.com. The annual fee is $250.
Pros and Cons of Cash Advance Credit Cards
Payment advance cards are convenient, but before you apply, it’s critical to understand how they work. Here are the pros and cons so you can make an informed financial decision:
Pros
- Fast and immediate loan: You can receive funds quickly, which makes these cards ideal for emergencies.
- Get cash rather than credit: You are provided with cash directly. This provides you with more spending flexibility compared to credit purchases.
- No collateral required: There is no need to provide assets (such as a car or property) as a guarantee for the loan.
- Easy and convenient: The process is streamlined for your convenience. There is no underwriting or credit check required for approval.
Cons
- High fees and APR: Advances often come with higher fees and interest rates compared to normal charge card purchases.
- No grace period for interest: Interest starts accumulating immediately, without the typical grace period associated with credit purchases.
- Limited access to your credit limit: The amount of cash you can withdraw may be lower than your actual available credit line.
- May lower your credit score: Advances can increase your credit utilization ratio, which may negatively impact your credit score.
How a Cash Advance Works
An advance allows borrowers to conveniently borrow cash from their available credit. Borrowers can withdraw cash from an ATM or choose to visit a local bank branch. But aside from withdrawing cash, borrowers are also able to purchase prepaid cards, money orders, and transfer funds from their card to a bank account. All of these transactions are typically processed as payment advances.
Advances are typically always more expensive due to higher interest rates and fees. When you request an advance, you will be charged a flat fee or a small percentage of the total withdrawal amount. The APR for this type of transaction is also higher than the standard purchase APR, and interest starts accruing immediately. While borrowers can pay advances the same way they pay other revolving card balances, the long term cost is higher due to these fees and rates.
Qualifications for Cash Advance Credit Cards
If you are applying for a new credit account, you may want to know how to qualify. The qualification requirements for a new card vary depending on the credit card issuer and the type of card you want. For example, the requirements are usually strict for platinum rewards credit cards. But don’t worry, as you can still apply for a credit card with bad credit if you have the ability to make monthly payments on time.
This is a list of the general information you may need to get cash advance credit cards:
| Information Category | Details |
| Personal Details | Full legal name, email address, phone number, etc. |
| Personal Identifiable Information | Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) |
| Income Details | Employment status, employer information, and gross annual income (pre-tax earnings) |
| Mailing Address | Current mailing address and residential status; information on monthly housing costs may be required by lenders |
You may worry about your eligibility for a payment advance card if you don’t have a checking account. But you don’t actually need an active bank account to get a charge card!
How to Pay For Your Cash Advance
Once your first credit card bill arrives, you can pay through one of these methods:
- Over the Phone: You can make a credit card payment over the phone. Your card should have a customer service phone number on the back.
- At a Local Branch: Many credit card companies have branch locations so you can visit and pay your bill in person. Credit card borrowers can pay with a money order or cash.
- Online Payments: You can securely make credit card payments through your online account.
What Are the Cash Advance Credit Card Fees?
A cash advance is a great option when you need to borrow money quickly. But did you know that withdrawing cash with your credit card will result in a cash advance fee?
Cash advances can be very costly for borrowers. When you withdraw cash using your credit card, you are subject to ATM fees, cash advance fees, and cash advance APRs. A cash advance APR is always higher than the purchase APR, and it’s typically the highest interest rate for any credit card service. Generally, the average credit card cash advance APR ranges between 15.56% and 22.87%.1
These additional costs can add up to a significant amount that may result in financial remorse. But there are alternative loan options that can provide same-day funding!
Alternative Loan Options
A credit card cash advance is not the only option available when you need money now. Many people resort to payment advances due to bad credit, but there are other loans you can apply for.
Personal Loans
A personal loan is a monthly installment option that could provide up to a few thousand dollars in just one business day. Borrowers can use personal loans for various personal expenses. The repayment length can be short or long, depending on the borrower and the loan amount.
Specific lenders have more fees than others, but the interest rates are generally decent. You can apply for personal loans online or in person at a brick and mortar.
Pawn Shop Loans
Pawn shop loans are convenient because numerous items are accepted as collateral for secure funding. If you have any electronics, collectibles, or jewelry you could do without, consider using them to obtain a loan. The loan amount you get will depend on the item’s condition and market value. But remember that you will not get the total value but a small percentage of that value.
The downside to pawn shop loans is that interest rates are sky-high. And if you don’t pay the loan back on time, you risk losing possession of the item you use as collateral.
Auto Title Loans
Auto title loans are popular due to the fast inquiry process and the flexible qualification requirements. In order to get approval, all you need is a reliable source of income and a vehicle with positive equity. The car title is necessary because the vehicle is used as collateral. Vehicles are valuable assets, so you could qualify for a sizable loan to pay off medical bills or high-interest credit card debt. However, a lien is put on the vehicle during the repayment process. If you fall behind on payments, you can risk losing possession of your vehicle.
Payday Loans
A payday loan, or payroll advance, is a fast cash loan option. Good credit is not necessary for approval. All you need is proof of your ability to repay the loan within two weeks. Many people take out fast payday loans online, but you could apply at a store location. While payday loans are a popular financing option, many financial experts advise against them due to high interest rates and extremely short repayment periods.
Is a Credit Card Cash Advance Right for You?
An advance provides convenient access to cash for people that are dealing with urgent emergencies. But even if you feel like you have no other options available to you, there are some factors to consider.
Keep in mind that advances have fees, high APRs, and no grace periods. Once you are financially stable, it’s critical to prioritize repaying advances to avoid increasing your credit account balance more than necessary. Financial experts generally advise borrowers to use payment advances as a last resort. Before seeking an advance, it may be better to consider alternative options, such as borrowing from friends and family or using your savings.
FAQS
The fee for a credit card cash advance is usually a percentage of the amount advanced, typically ranging from 3% to 5% of the transaction, with a minimum fee amount set by the credit card issuer.
The cash advance APR is often higher than the regular purchase APR on a credit card. It starts accruing immediately on the amount advanced, unlike purchase APRs, which usually have a grace period.
While most credit cards charge cash advance fees, some cards may offer lower fees as part of their benefits. It’s important to compare different cards to find one with lower fees.
When choosing a credit card for cash advances, consider the cash advance APR, cash advance fee, cash advance limit, and how quickly you can repay the advanced amount to minimize interest charges.
Once you’ve reached your credit card’s cash advance limit, you cannot take out more until you’ve paid down some of the balance. The cash advance limit is typically a portion of your overall credit limit.
It’s generally difficult to negotiate the cash advance fee or APR with credit card companies, as these rates are part of the card’s terms and conditions. However, customers with a strong credit history and a good relationship with the issuer might have some leverage.
To minimize the cost of a cash advance, consider borrowing only what you need, repaying it as quickly as possible to reduce interest accumulation, and choosing a card with lower cash advance fees and APRs.
Interest on a credit card cash advance typically starts accruing immediately, with no grace period. This is different from regular credit card purchases, where you might have a grace period before interest accrues.
Yes, you can generally use a credit card cash advance for any type of expense. However, it’s important to remember that due to the higher interest rates and fees, it’s best used for urgent or emergency expenses.
Yes, the cash advance limit can vary between different cards. It’s typically a percentage of your total credit limit, but the exact amount can vary depending on the card issuer’s policies and your creditworthiness.
Some credit cards are more favorable for cash advances, offering lower cash advance APRs and fees. It’s important to research and compare different credit cards to find the most suitable one for cash advances.
The risks include high-interest rates leading to increased debt, the potential for a negative impact on your credit score due to high credit utilization, and the temptation to use cash advances for non-urgent expenses, which can lead to a cycle of debt.
The cash advance APR on a credit card is set by the card issuer and is typically higher than the APR for purchases. It’s calculated as an annual percentage rate, but interest is usually charged on a daily basis from the day the cash advance is taken, with no grace period. This APR can vary over time, depending on the cardholder agreement and changes in the prime rate or other economic factors. It’s important to check your credit card terms regularly to stay updated on any changes to the cash advance APR.
The Bottom Line With CreditNinja: The Best Credit Card Cash Advances
Credit card cash advances are convenient for borrowers who need cash quickly. You do not have to undergo a new approval process or risk an immediate decrease in your credit score.
However, cash advances can be pricey due to excess fees. If you need a same-day loan, consider other options, such as a personal loan. Personal loans typically have decent interest rates and an affordable repayment plan. CreditNinja recommends that you take time to compare your loan options to find the best cash advance option for your situation!
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