Managing your money can be a challenge. There are expenses to cover, unexpected emergencies, changes in your work schedule, holidays and much more. In the midst of all these issues, you may find yourself a bit short on cash. Looking into cash advances is a good way to balance your budget without taking out massive loans or incurring even more debt.
What is a Cash Advance?
A cash advance is any financial product that provides you ready cash based on a pending payment or standing line of credit. You can even get a cash advance on work you have not yet completed for your employer.
Generally, a cash advance is subject to fees and interest rates depending on the platform. Because the platforms offering cash advances vary, you should review the terms and conditions of the program before proceeding. One company may provide the amount of money you require with terms you cannot stomach. Another may fall short on cash while offering low rates and terms.
Where Can I Get a Cash Advance?
You can get a cash advance from:
- Your bank
- A credit card issuer
- A lender
- A virtual payment service
- An alternative financial platform
When you approach your bank for a cash advance, you can avail yourself of a few different types of cash advances. Credit card issuers, lenders, financial platforms and virtual payment services often provide small advances based on traditional lending requirements.
What Types of Cash Advances Are Available?
Your selection of cash advances varies based on where you look. Review your options before continuing your search or reaching out to a financial institution for assistance.
Get Paid Early
A new standard in the industry calls for your financial institution to pay you a few days before your paycheck hits your account. When you register with cash advance apps of this type, the bank wants to know how much your weekly, bi-weekly or monthly paycheck generally is. The bank wants to know when you are traditionally paid, and that money is deposited in your account a few days before payday.
When your paycheck arrives, the bank retains the check to reconcile your debt. In most cases, you will pay no fees or interest to get paid early.
A Quick Cash Advance
Certain banks or financial platforms offer a small cash advance (around $250) for customers in good standing. You might call this a personal loan, but a personal loan requires far more paperwork and vetting. For a quick advance such as this, you simply request the advance, the money is deposited and you abide by other rules imposed by the bank such as how often you can request a cash advance each year.
Pay off the advance when you can, making sure to follow the bank’s guidelines. In these cases, getting a cash advance online is far simpler than visiting a bank branch or office.
Credit Card Advances
When you get a cash advance with a credit card, you are borrowing the cash against the balance on your card. If you don’t have enough room on your card to fund the advance, you likely can’t complete the transaction.
Some consumers are famiar with credit card checks that allow them to—effectively—pay cash with a credit card. However, a cash advance allows you to take out cash for yourself, depositing that money in your bank account or via a paper check.
Pros and Cons of a Cash Advance
When reviewing your options, remember that cash advances carry both pros and cons. Review your options and consider:
Advantages of a Cash Advance
- Immediate or near immediate funding
- Quick approvals
- Get paid before payday
- Obtain needed cash without the hassle of a traditional loan
Drawbacks of a Cash Advance
- You may need more cash than the bank or card can provide.
- Some cash advances are subject to higher-than-normal fees.
- Repayment terms may not be favorable.
An item to consider when looking at cash advances is that the advance must match your circumstances. You may have a credit card that offers low to no interest rates for cash advances. It’s possible that you bank with an institution that offers low or no rates on cash advances. At the same time, you may be in the unlucky position where you must pay high fees or interest rates on these advances.
However, you should also factor in your ability to repay the advance. Some consumers should shop for the best deal, but others can take the first advance they find knowing it’ll be repaid relatively soon.
Alternatives to Cash Advances
If you find yourself in need of some extra cash to cover an unexpected expense or financial emergency, you may consider obtaining a cash advance. However, cash advances often come with high fees and interest rates, making them a less than ideal option for many individuals. Thankfully, there are several alternatives to cash advances that can help you get through tough financial times without incurring excessive fees and interest charges.
- Use your debit card: Having a debit card allows you to withdraw money from an ATM without paying a cash advance fee. This is possible as long as you use an ATM within your bank's network.
- Explore personal loans: Personal loans are a type of loan offered by banks, credit unions, or online lenders. They provide a lump sum of money that you repay over a fixed period of time, with lower interest rates than cash advances. Personal loans also offer a longer repayment term, giving you more flexibility with your monthly budget.
- Borrow from friends or family members: Borrowing money from loved ones can be a cheaper and more flexible option than cash advances. Negotiating terms with someone you trust could result in lower interest rates and easier repayment. However, it's important to be cautious and have a clear repayment plan to avoid damaging relationships.
- Pay with your credit card: Credit cards can be used as an alternative to cash advances for unexpected expenses. They have lower interest rates and may offer interest-free grace periods if the balance is paid quickly.
- Prizes & Features
About MoneyLion
MoneyLion is a financial platform that dedicates itself to “rewiring” the system. With its products focused on the average consumer, the slogan holds true: helping the 99% feel 100% about their finances.
Services offered through MoneyLion include:
- Mobile banking
- Cashback rewards
- No hidden fees
- Financial tracking services
- Buy-now, pay-later options
- RoarMoneySM helps you get paid early
- Investment accounts
- Credit builder plus loan
- InstacashSM advances
- MoneyLion crypto trading
Learn About Cash Advances Today
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Frequently Asked Questions
How do I get a cash advance right away?
You can get a cash advance right away from a bank, financial platform or credit card company. Depending on the program, you may be subject to fees and interest.
Can you get a cash advance online?
You can get a cash advance online if you work with an online lender. You might also use the mobile app for your credit card, financial platform or bank that provides cash advances.
What is the limit on a credit card cash advance?
The limit on a credit card cash advance varies depending on the individual’s credit limit and the policies of the credit card issuer. Generally, the limit for a cash advance is a percentage rate of the total credit limit, usually ranging from 20% to 50%. It is important to note that cash advances typically come with high interest rates and fees than credit card purchases or balance transfers, so it is not advisable to rely on them as a long-term financial solution.
Does a cash advance hurt my credit score?
A cash advance can potentially hurt your credit score if you are unable to repay it on time or if it increases your credit utilization ratio. Additionally, taking out multiple cash advances within a short period of time can raise red flags to lenders and negatively impact your creditworthiness. It is important to carefully consider the implications and potential consequences before opting for a cash advance.
About Patton Hunnicutt
Patton Hunnicutt is a contributor and editor at Benzinga. He’s worked for several years on financial content, addressing issues related to personal finance, investments, retirement, and more.