Even in today’s almost-cashless economy, there are still situations where you might find you need “real” money. From strolling through market stalls to picking up some furniture from a local on Gumtree, there are times when physical cash creeps its way back into circulation.
But what can you do when you typically tap or click “BUY NOW” for every purchase?
Well, taking out a cash advance with your credit card might seem like the obvious answer. Join us as we explain how to get a cash advance and explore whether it’s a viable solution for getting quick cash.
How does a cash advance work with a credit card?
You can think of a cash advance as using your credit card to buy cash instead of items. Just like any product you purchase on your credit card, the cash you withdraw will be placed onto your credit line to be repaid – and it’ll continuously accrue interest until you pay it all back.
How to Get a Cash Advance
Does your credit card have a PIN? If so, you can likely get a cash advance from an ATM.
If not, head to a bank that accepts your type of credit card. Make sure to bring photo ID.
The Downsides of Cash Advances
A credit card cash advance is certainly an easy way to get money quickly, but it comes at a price.
To begin with, the ATM or bank you use to get your cash advance will likely charge you a transaction fee. Then you have the cash advance fee charged by the credit card company itself (either a flat fee or a percentage of the cash amount).
It’s also worth noting that the interest on cash advances is often significantly higher than the interest charged on actual purchases. Plus, you’ll likely begin accruing interest on your cash advance immediately (no grace period).
Alternatives to Cash Advances
As you may have guessed already, a cash advance is rarely the ideal path to getting money.
Instead, you might want to consider:
- Overdrawing on your savings. Sure, you’ll cop a fee, but at least you won’t get slammed by interest.
- Borrowing from a family member or friend. While not always possible and potentially a little embarrassing, this option is worth taking if it’s available to you.
- Breaking open the piggy bank. If it’s literally a “need cash but only got plastic” situation, it might be best to dip into that piggy bank that’s been collecting dust on your kitchen counter.
- Asking for an advance at work. If you can stomach the awkward conversation with your boss, you could potentially save hundreds in fees and interest.
- Taking out a personal loan. A short-term cash loan may work out better than a cash advance. And whereas most credit cards will cut you off at a couple of hundred dollars, Cigno can help you borrow up to $1,000. You can also apply online from the comfort of your home or while out and about – no need to trek down to the bank or search for your nearest ATM.
For more information about how a small cash loan compares to a credit card cash advance, contact our team of short-term financial specialists.
Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.