How to Get Cash Advances

Learn how to get cash advances easily through zaving.

Last updated by Zaving Editorial Team, on January 18th, 2024

Do you want to know how to get cash advances? Find out with zaving. If you need some urgent cash to get you through a tight spot, you can turn to zaving to help you explore your options. Our online service makes applying for a loan quick, easy, and hassle-free. If your loan is approved, cash can land in your bank account straight away – it's as simple as that! Start the application process right here today with zaving.

What are cash advances and how do I get one?

“Cash advances represent short-term lending options provided by credit card issuers or certain financial institutions, permitting cardholders to withdraw cash against their credit limit via ATMs or bank withdrawals. This process typically incurs immediate interest charges, often at rates higher than those associated with standard credit card purchases.

When securing a cash advance, you're essentially borrowing against the available balance on your credit card. In contrast to regular credit card purchases that may offer a grace period before interest applies, cash advances tend to start accumulating interest right from the moment of withdrawal. The amount you can withdraw hinges on your credit limit and the specific cash advance limit dictated by your card issuer.

Additionally, cash advances usually entail extra fees, encompassing ATM charges, cash advance fees (usually a percentage of the withdrawn amount), and potentially elevated interest rates in comparison to regular credit card transactions.

Recognizing that cash advances are generally regarded as expensive alternatives due to their higher fees and immediate interest accrual, it's advisable to exercise caution and utilize them sparingly, primarily for urgent needs, given their higher expenses relative to other borrowing methods.”

How are cash advances different to payday loans?

Cash advances and payday loans differ in several ways:

  • Funding source: Cash advances are typically linked to credit cards, allowing users to withdraw cash against their card's credit limit. In contrast, payday loans are short-term loans offered by specialized lenders, primarily based on the borrower's income.
  • Repayment structure: Cash advances are usually repaid as part of the credit card balance, often on a monthly basis, subject to the card's terms and interest rates. On the other hand, payday loans require a lump-sum repayment, covering the principal amount, fees, and higher interest, typically due on the borrower's upcoming payday.
  • Interest rates and fees: Cash advances come with higher interest rates compared to standard credit card purchases, typically around 25% to 30% APR. Conversely, payday loans often carry substantially higher rates, frequently exceeding 400% APR, along with additional fees.
  • Regulation: Cash advances adhere to credit card regulations and agreements, while payday loans are regulated by specific state and federal guidelines, often different from credit card regulations.
 

These differences in funding sources, repayment structures, interest rates, fees, and regulatory oversight distinguish cash advances from payday loans, affecting their suitability based on individual financial circumstances and preferences.”

Can cash advances affect my credit score?

“Cash advances, while not directly reported as separate entries by credit bureaus, can have an indirect impact on your credit score. They often contribute to elevating your credit utilization ratio by increasing your outstanding credit card balance. If this ratio surpasses 30%, it can negatively affect your credit score. Late repayments or defaults on cash advances can result in additional fees and blemishes on your credit report, thereby impacting your score. Moreover, the exorbitant interest rates linked with cash advances can spiral into a cycle of debt, making financial management challenging and indirectly affecting your credit score.

It's essential to acknowledge that various factors, including your overall credit history, payment track record, credit inquiries, and the interest rates applied to your financial accounts, contribute to your credit score. To mitigate the potential adverse effects of cash advances, consider using them solely for emergency situations. Ensure prompt repayment to minimize interest accrual and reduce the impact on your credit utilization ratio. Avoid frequent cash advances within a short timeframe, as this may signal financial distress and adversely impact your credit score. 

Additionally, monitoring your credit reports regularly helps identify any inaccuracies or discrepancies that could potentially harm your credit score. By judiciously utilizing cash advances and maintaining a consistent pattern of sound credit practices, you can effectively minimize their potential negative influence on your credit score.”

More of your frequently asked questions about payday loans

Are there restrictions on how I can use a cash advance?

Absolutely, there can be restrictions when it comes to using cash advances, which vary based on the lender. These restrictions might encompass capped withdrawal amounts, commonly linked to a percentage of your credit limit, and limitations on activities like gambling or investment purchases. Considering their higher interest rates, it's advisable to use cash advances for crucial expenses or emergencies.

Can I get a cash advance if I have bad credit?

While having bad credit can complicate matters, it's still possible to acquire a cash advance. Some lenders might consider individuals with poor credit but might impose stricter terms, reduced borrowing amounts, or increased fees. Exploring alternative lending avenues, such as payday loans, might be an option, yet remember the typically higher interest rates and fees.

Can I pay off a cash advance early without penalties?

The possibility of settling a cash advance early without penalties differs based on the lender's policies. Some permit early repayment without penalties, enabling you to save on interest by paying it off sooner, while others might include clauses for prepayment fees. Checking your agreement details or contacting your lender will determine if there are added charges for settling the advance early.

What are the rates and fees associated with cash advances?

When opting for cash advances, expect encountering increased fees and higher interest rates in contrast to regular credit card transactions. Typically, an upfront fee of 3-5% of the withdrawal amount accompanies interest rates varying between 25-30% APR, contingent upon your creditworthiness and the lending institution. Recognizing that these combined expenses can quickly accrue is vital, as cash advances prove to be a significantly costly option.