What Is a Cash Advance?
A cash advance lets you borrow money quickly, often through a credit card or app. While it’s a convenient way to access extra funds, a cash advance from an app may include fees—and a credit card cash advance can come with higher interest rates.
This guide explores how cash advances work, their pros and cons, and tips to use them wisely.
Table of Contents Skip to Section
What is a cash advance?
A cash advance is a form of short-term financing that gives you quick access to cash. The most common type is a credit card cash advance, but many cash advance apps have a more straightforward process for charging fees and repaying the funds.
When you get a cash advance from your credit card, the card issuer will often charge a higher interest rate (APR) than it charges for purchases and a fee. Interest begins to accrue right away instead of when your next statement period begins.
With a cash advance app, you might pay a fee, especially for an instant transfer—but most don’t charge ongoing interest. Instead of paying off a balance on your own schedule as you would with a credit card, you usually owe the full amount by your next paycheck.
Find out more in our ultimate cash advance guide.
How much can I borrow with a cash advance?
The amount you can borrow with a cash advance depends on the type. Credit cards tend to have higher borrowing limits, while cash advance apps offer shorter repayment terms with lower loan amounts.
How much you can borrow with a credit card cash advance
A credit card cash advance lets you borrow between 20% and 30% of your credit limit. So if your credit limit is $10,000, you might qualify for an advance between $2,000 and $3,000.
Credit card companies might set the limit based on your credit score. In that case, the higher your score, the more you can borrow via a cash advance from your credit card.
How much you can borrow with a cash advance app
Cash advance apps typically allow smaller borrowing amounts compared to the total credit limit on a credit card. However, they differ in how they structure limits. For example, cash advance apps often let you borrow between $10 and $750, with repayment due by your next paycheck—usually within two weeks.
Credit cards, in contrast, may allow daily cash advances of several hundred dollars, but these are limited by your overall cash advance credit line, which is often a fraction of your total credit limit. Here’s an overview of the borrowing limits from popular cash advance apps:
| App | Advance amounts |
| EarnIn | Up to $100/day, Up to $750/pay period |
| Dave | Up to $500 |
| MoneyLion | Up to $500 |
| Current | $50 – $500 |
| Empower | $10 – $300 |
| Brigit | $50 – $250 |
| Cleo | $20 – $250 |
| Floatme | $10 – $100 |
How much does a cash advance cost?
Pricing structures can vary for cash advances, so it’s important you understand how each option charges for this service.
Credit card cash advance fees
Most credit cards come with two sets of fees in one transaction:
- Upfront fee: When you take out a cash advance, many creditors will add a 3% to 5% fee to your balance. So if you take out $1,000 and a 5% fee applies, you’ll owe $1,050.
- Immediate interest: Your cash advance balance will immediately begin accruing interest at a higher rate. Check your credit card agreement to see how this rate compares to your purchase APR.
Calculate the amount you can expect to pay for your credit card cash advance based on upfront fees and the time it will take you to pay off your balance.
Cash advance app fees
Cash advance apps may charge in a few ways. Some have flat fees, while others charge a percentage of the borrowed amount. Flat fees are more straightforward, but remember to calculate them as a percentage of your cash advance to help you compare options.
For instance, a $1 fee on a $10 cash advance is the equivalent of a 10% fee. But a $1 fee on a $100 cash advance is only 1%. So it’s important to compare both dollar amounts and percentages based on the amount you plan to borrow.
This table shows several pricing structures for instant advance fees. A higher fee applied to a higher advance may be cheaper than the lower range charged on a smaller cash advance.
| App | Instant advance fee |
| EarnIn | $1.99 – $4.99 |
| Dave | 3% – 5% |
| MoneyLion | $0.49 – $8.99 |
| Empower | $1 – $8 |
| Cleo | $3.99 |
| Floatme | $3 – $7 |
How do I repay a cash advance?
Here’s how repayment works for both types of cash advances.
Credit card cash advance
A cash advance is included in your overall credit card balance. You have a minimum payment each month and can pay that or a higher amount to lower your balance and accruing interest.
Paying more than your minimum amount is ideal because credit card companies must apply any extra payments to your highest-interest balance. Because cash advances often have a higher rate than other credit card transactions, this strategy helps you avoid accruing even more debt.
Cash advance app
Most cash advance apps require you to connect to your bank account to reschedule an automatic payment. The due date is usually the next payday. Because cash advance apps are smaller than credit card cash advance limits, the whole amount is due right away.
The benefit of this payment structure is that you don’t accrue ongoing interest with a longer repayment plan. Instead, you pay a single fee for an advance that can come straight out of your bank account on payday.
If I had a client who needed quick cash, my recommendation would depend on the amount they needed. If it is a small amount that can be covered by a cash advance and that they can repay by the next pay period, I would recommend a cash advance app.
If the amount is greater than they can take out from a cash advance app or they can’t repay the cash advance loan in a short period, I would recommend the credit card cash advance and work with them to create a realistic but committed repayment plan.
Erin Kinkade, CFP®
Where do I get a cash advance?
Before choosing a credit card cash advance, remember to compare apps as well. We recommend the following six best cash advance apps that can help you borrow quick cash without ongoing fees and interest that increase your debt.
If borrowing from your credit card makes more sense, you can get a cash advance in several ways. First, you can withdraw funds from an ATM. After inserting your card and logging in, choose a cash withdrawal or advance option, and then select your credit card from the available accounts.
At this point, you’ll also see the fees your card issuer charges for the cash advance. If you agree, finalize the transaction and get the cash from the ATM. You can also go to your bank teller and request cash or get a cash advance check to pay someone from your credit line.
The post What Is a Cash Advance? appeared first on LendEDU.