What is a Cash Advance?

Hands receiving money
What’s a cash advance? Let’s start with the cash advance definition. A cash advance is an amount of cash borrowed against a credit card limit. The convenience of this service lies in the fact that you can withdraw the money as you would from your bank account, with the exception being you’re responsible for repaying the money with interest. Read on to learn more about cash advances and how they work from Xpress Cash!

How Much Can I Borrow?

Many credit accounts specify a cash advance limit. You can withdraw up to the cash advance limit, which in most cases, is lower than the credit limit. So, if you have a cash advance limit of up to $400, that’s how much you can withdraw. Withdrawing money is easy; you can go to an ATM and use your PIN number or you can request a convenience check issued by your credit card company.

Cash Advances vs. Payday Cash Advance Loans

Much like the ways in which cash advances differ from balance transfers, credit card cash advances and payday cash advance loans aren’t the same thing. Payday cash advance loans don’t check credit and are typically repaid by the next payday. Cash advances are a service provided your credit card issuer — who completed a hard inquiry of your credit report to approve your application. Unlike payday loans, you can repay a cash advance over a longer amount of time.

When Does it Make Sense to Get a Cash Advance?

Usually, there are fees associated with a cash advance, such as a one-time fee that ranges from 3% to 5% of the amount borrowed, as well as interest charges. Unlike on a credit card, these interest charges begin to accrue immediately. However, a cash advance can be a viable option if you’re struggling to repay a car loan and need emergency funds, want to avoid overdraft fees, or a bill is due but you have nothing but plastic.

Credit cards with no cash advance fees offer more leeway. If you’re traveling abroad and using a credit card with no cash advance fee or foreign transaction fee, it may be more affordable to use than a debit card with a 3% foreign transaction fee. As long as you repay your cash advance quickly, you may actually save money.

Learn More About Cash Advances form Xpress Cash!

Do you have questions about our cash advance options? Contact us to learn more about what you need to start your application. We operate from three branches in Michigan, Idaho, and Wisconsin.