What Is a Cash Advance and How Do You Get One?


May 19, 2023



min read

What is a cash advance?

Cash advances are a type of short-term loan that is often used to cover unexpected expenses or emergencies. They can be acquired through credit card companies, as well as from payday lenders or cash advance stores. For the purposes of this article we’ll discuss cash advances for credit cards.

How do cash advances work?

When you take out a cash advance, you are essentially borrowing money against your credit card's available balance. The amount you can borrow depends on your credit limit and the terms of your credit card agreement. Cash advances can have higher interest rates than regular credit card purchases and potentially additional fees.

Is a cash advance a payday loan?

A cash advance from a credit card or payday loan company are similar in that they both offer short-term loans with potentially high interest rates and fees. However, there are some key differences between the two.

A cash advance offered by credit card companies allows cardholders to withdraw cash against their credit limit. The amount borrowed is then added to the cardholder's balance and subject to interest charges. Cash advances usually have higher interest rates and fees than regular credit card purchases.

On the other hand, a payday loan is a type of short-term loan offered by lenders that is designed to be repaid with the borrower's next paycheck. Payday loans often have high interest rates and fees.

While both cash advances and payday loans can be costly and should be used with caution, cash advances may be a better option for those with credit cards who need quick access to cash in an emergency. It's important to carefully read the terms and conditions of any loan and consider alternative options before taking out a cash advance or payday loan.

What are the requirements for a cash advance from a credit card?

To be eligible for a cash advance, you must have an active credit card with available credit. Based on the lender, you may also need to meet other requirements, such as having a certain credit score or income level.

What are the benefits of cash advances?

Cash advances can be a quick and convenient way to get cash when you need it. They can be useful for covering unexpected expenses or emergencies, such as car repairs or medical bills. Additionally, cash advances can be easier to obtain than traditional loans, as they typically require less paperwork and fewer eligibility requirements.

What are the downsides of cash advances?

Despite their benefits, cash advances can also come with significant downsides. They usually have higher interest rates and fees than traditional loans or purchases and can become expensive if not repaid promptly. If you find yourself relying on cash advances frequently, it may be a sign of deeper financial issues that should be addressed.

Resources for deciding if cash advances are right for you

If you're considering a cash advance, it's important to weigh the pros and cons carefully and consider alternative options, such as borrowing from a family member or friend or seeking assistance from a non-profit credit counseling agency. 

Ultimately, the decision to take out a cash advance should be based on your individual financial situation and needs. If you do decide to take out a cash advance, be sure to read the terms and conditions carefully and make a plan for repaying the loan as soon as possible to avoid accruing additional interest and fees.

The Yendo Card

Yendo is the first credit card that's backed by the value of your car. The card can provide access to credit for those who might not be able to qualify for other credit cards. It's a real credit card, powered by Mastercard, that provides credit limits from $450 - $10,000, depending on the value of your car. So, rather than re-applying for loans, for example, you can access funds an ongoing basis and, with responsible usage like on-time payments, build your credit too.

Features & benefits

  • Credit limit - access up to $10k in credit
  • App - the Yendo app lets you manage your account, wherever you are
  • Virtual card - access a portion of your credit limit prior to getting your physical card in the mail with the Yendo virtual card. Use your virtual card in addition to your physical card
  • Cash advances - ability to do cash advances on your card if you need to access money quickly
  • Access to revolving credit – you’ll have a revolving line of credit that opens up as you make payments
  • Credit reporting – all your account activity will be reported to the credit bureaus, giving you the perfect opportunity to build your credit