7 alternatives to credit card cash advances

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Take out a cash advance on your credit card might look attractive: you have easy access to cash, which you might need for groceries or to pay rent.

But cash advances have significant drawbacks, including fees that tend to be high and interest that starts accruing immediately. There is often a cap on the amount you can withdraw, and it’s usually well below your card’s overall credit limit.

So while they may be an available resource – and a better option than, say, taking a payday loan – cash advances should only be used as a last resort if you are in a financial emergency.

Before removing one, consider these alternatives:

1. Credit cards with low interest rate or 0% annual interest rate

Some credit cards offer introductory 0% APR periods on purchases, which means you can use them to finance the purchase of groceries and other essentials without paying interest. in advance. Of course, you’ll still owe the money, but you’ll have a significant period of time – often anywhere from six months to almost two years – to pay it off in full before interest starts accruing.

With the Wells Fargo Platinum Card, for example, you can enjoy a Introductory APR of 0% for 18 months from the opening of the account on purchases and eligible balance transfers, then ongoing APR from 16.49% to 24.49% Variable APR.

Other cards offer low interest rates on purchases only: Chase Freedom Unlimited® offers Introductory APR of 0% on purchases for 15 months, then ongoing APR from 14.99% to 24.74% variable APR.

2. Credit card loan programs

Some credit card issuers offer loans to existing customers which, among other things, allow them to pay off certain purchases, over time, for a fee. Examples of this are AmEx Pay It® and Plan it® characteristics.

3. Third party payment services

If you need to save time before your next paycheck, you may want to consider a service like Plastic to tackle certain bills. The site allows you to use a credit card to cover expenses that are often not otherwise payable this way, including rent, utilities, child care, etc. For a 2.85% service charge, Plastiq will charge your card for the invoice, a check to the seller in your name and mail it to them.

Assuming you can pay the bill quickly – that is, without carrying it over to the next month and without being hit by the double-digit interest rate on your credit card – a convenience fee of 2.85 % may be worth it and may be cheaper than other options. If you are using a rewards credit card for the bill, this can also help cover upfront costs.

4. Buy now, pay for services later

Sometimes it is not possible to shell out a large amount of money at once, whether you are strapped for cash or not. Buy now, pay later providers, like Affirm, Afterpay, and Klarna, allow users to split purchases into small installments that you can pay off over time, typically between three and 12 months.

While some BNPL options come with interest rates and fees that can be expensive, if you are able to pay your bill within a short period of time, they can offer more flexible financial relief.

It is important to note, however, that BNPL is only offered by specific traders. This means that if you need quick cash to rent or buy groceries, for example, the services may not be of use to you.

5. Flexible credit card options

There are alternative credit cards which can offer flexible financing options that are less expensive than cash advances. For example, the $ 0– annual-rate Upgrade the Visa® card with cash rewards allows cardholders to tap into their credit limits for personal loans. Customers can repay the borrowed amount in monthly installments equal to a fixed interest rate.

6. Personal loans

Lenders offer many types of personal loans, including secured loans, which are backed by collateral, and unsecured loans, which are not. Some offer fixed rates, which means you pay the same amount each month until the loan is paid off, while others offer variable rates, which means your payments can change over time. The rates generally vary from 5% to 36%.

Although the interest rate is still relatively high, it can be lower than that of a cash advance, especially after taking into account the other costs involved in the subscription, which are usually a fixed fee or a percentage of the amount. took of.

7. Alternative “quick liquidation” options

If you’re in dire financial straits and need more immediate financing, there are quick ways to find relief:

  • Cash in your rewards: If you have a credit card with a cash back program, you may be able to redeem your rewards for a good chunk of change.

  • Request an advance on your salary: While a cash advance on your credit card can be risky and expensive, asking your employer for a cash advance on your paycheck can be a way to meet your financial needs without incurring any fees or charges.

  • Request local assistance: Many local organizations offer financial assistance to people in difficulty. Local organizations that can generally be of help can include religious organizations, nonprofits, or community centers.

Information relating to the Wells Fargo Platinum Card was collected by NerdWallet and has not been reviewed or provided by the issuer or provider of this product or service.



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