Cash advance is going to cost you, However, you may have other, less expensive options, thanks to credit card loan programs
When you lack the money in your bank account to deal with an unexpected cost, a credit card cash advance is one way to get quick access to needed funds but there are some major downsides. You’ll be on the hook for cash advance and ATM fees, along with interest that begins to accrue the moment you get the money.
And about that interest: According to data from the Federal Reserve of St. Louis, average APRs among cards that charged interest reached 20.4% in November 2022. That’s already pretty high, and in many cases, interest rates specifically for cash advances are even higher than that.
In other words, that cash advance is going to cost you.
However, you may have other, less expensive options, thanks to credit card loan programs that let you borrow against your card’s existing credit limit which is essentially what you do when you request a traditional cash advance. But unlike a cash advance, these newer loan programs have several benefits:
New ways to borrow against your credit limit
Among major lenders, both Chase and Citi offer these types of loans to qualifying cardholders. You can see what you’d potentially be eligible for by logging in to your account online or through the Chase or Citi apps.
My Chase Loan
My Chase Loan allows you to borrow a minimum of $500. You’ll be given the option of several payment plans of varying terms for example, you might be able to choose something like a six-month or 12-month plan, potentially at a much lower APR (think single digits) than your card’s ongoing variable rate for purchases. (Your rate and terms will vary based on your creditworthiness.) You’ll also see what the monthly payment would be with each loan option. Your loan payment will be added to your credit card minimum payment each month until you pay it off. There’s no penalty if you decide to pay off your loan early. Terms apply.
Citi Flex Loan
A Citi Flex Loan operates similarly: Borrow a minimum of $500 at a fixed APR for a set period of time. You’ll be able to choose from loans of different amounts and lengths, and you’ll see what your monthly payment will be based on the terms you choose. Your payment will be included with your minimum monthly credit card payment each month. Terms apply.
Beyond these loan programs from big players, you may have other options. For instance, hybrid products from a startup called Upgrade can be used to make purchases, as you would with a traditional credit card, but you pay off your bill in fixed installments at a set APR, as you would with a personal loan. You can also borrow against your credit limit by requesting that cash be deposited in your account. APRs and terms vary, but it may still be much less expensive than a cash advance.
Potential drawbacks
Both of these loan programs offer access to money relatively quickly for a lower cost than a cash advance, but there can be downsides:
If you have expensive purchases coming up, there are ways to use credit cards to delay interest payments or split up payments:
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