4 Alternatives to Credit Card Cash Advances

1. Personal Loan

A personal loan could be an excellent option if you need some money to get through a financial rough spot. Personal loans typically come with lower interest rates than credit cards, and credit card cash advances in particular. According to November 2023 data from the Federal Reserve, the average interest rate on a 24-month personal loan is 12.35%, which is over 10 percentage points lower than the average credit card rate of 22.75%. Interest rates on cash advances could be even higher along with a cash advance fee of 5% or $10, whichever is greater.

If you need a sizable sum, personal loans have limits ranging from $1,000 to $100,000. Conversely, credit cards generally only allow you to withdraw a specific percentage of your credit limit—such as 30%. Another advantage of a personal loan is that it usually comes with a fixed interest rate and term, which can make managing your loan repayment predictable and simple.

Personal loans aren’t without their own disadvantages, however. Most lenders charge an application fee and a loan origination fee, typically 1% to 8% of the loan amount. And while online personal loans often offer funding as fast as the same day or the next business day, that’s still not as fast as simply pulling out money at an ATM or bank teller window. Still, the amount you could save in interest charges may be worth the extra time and effort it takes to take out a personal loan.

While personal loan qualifications vary by lender, common eligibility criteria include:

• FICO Score in the good or excellent range (at least 670)
• Strong income—the higher, the better
• Low debt-to-income ratio (DTI), usually below 36%

2. Intro 0% APR Credit Cards

As its name implies, an intro 0% APR credit card allows you to make interest-free purchases and balance transfers, but not cash advances. If you need the card to pay for a new refrigerator, an emergency medical bill or another large unexpected expense, the 12- to 21-month promotional period could give you enough time to repay the amount interest free. That may be a better option than taking a cash advance and incurring the high interest rates and fees that come with it.

Additionally, you can free up money in your budget by consolidating high-interest credit cards with the 0% introductory balance transfer card. Without interest charges, you’ll save on borrowing costs if you repay the amount before the promotional period ends. However, balance transfers usually come with a balance transfer fee of 3% to 5% of the transferred amount, something to consider when weighing your options.

Once the introductory period expires, you’ll be subject to the card’s standard interest rates, which could be substantial. Remember, you’re still required to make your minimum monthly payment on time or your promotional rate could revert to your card’s regular rate, potentially upwards of 30% APR.

Another downside is that you generally need a good to excellent credit score to qualify for an intro 0% APR credit card. However, if you qualify, this option could give you the short-term financing you need without accruing high interest charges, which may be a better option than a cash advance.

3. Credit Card Loan Program

Some credit cards offer loans or installment plans that may provide you with credit at a lower interest rate than a cash advance. These plans allow you to convert eligible purchases of $100 or more into an installment plan. If your card issuer offers this option, you may qualify for a repayment plan with fixed monthly payments for a specific period. These installment plans may be more manageable—and less costly—than repaying a revolving balance from a cash advance.

This option usually isn’t widely advertised, but it offers a way to finance purchases without going through the application and credit check process. These installment plans are usually offered through a specific program, such as My Chase Plan and U.S. Bank ExtendPay Plan.

As you might expect, your mileage may vary with these plans. In some cases, you may avoid interest charges on purchases altogether by paying a fixed monthly fee on your statement. As with any loan option, confirm the potential fees and interest charges associated with the loan before proceeding.

4. Buy Now, Pay Later

Buy now, pay later (BNPL) is an installment loan that allows you to make a purchase and repay it over time with fixed monthly payments. These loans are commonly available as a payment option when making purchases at brick-and-mortar retailers and online outlets. The primary benefit BNPL offers is low borrowing costs, as most providers don’t charge interest as long as you make payments on time. Be aware, however, that missing a payment due date could trigger fees, a penalty interest rate or deferred interest. Verify the interest and penalty terms before applying for a BNPL plan.

Not all BNPL installment loans are interest-free. Some offer interest rates as high as 36%, so verify your terms before applying. Loan terms also vary. Affirm, for instance, offers loan terms ranging from one to 48 months, while Afterpay and PayPal Pay come with six-week terms.

A BNPL plan could benefit you more than a cash advance if it comes with a low or no interest rate. Many BNPL programs allow you to borrow without checking your credit, which could make this option more attractive if you’re building (or rebuilding) your credit. As with any credit product, make sure you can comfortably afford the payments before using a BNPL option to avoid adding strain to your finances.

The Bottom Line

A cash advance can be advantageous if you’re in a financial pinch, especially if you can repay it in short order. But understand, cash advances generally carry high interest rates and potential fees. You might consider one of the alternatives above to help save on borrowing costs and potentially ease your financial burden.

If you’re unsure how to climb out of a financial hole, consider consulting with a certified financial counselor. A qualified professional may help you devise a plan to manage your money, reduce debt and achieve your financial goals. It’s also a wise practice to build an emergency fund to avoid resorting to debt to address future emergencies.

Your credit health is another essential element of your overall financial strength. As you seek alternatives to cash advances, work toward building your credit. Accessing your credit report and score for free with Experian can help you see where your credit stands so you can address any issues if necessary.