What Is a Cash Advance? From Credit Cards to Apps

When you hear “cash advance”, you may think of a credit card cash advance.

Today we’ll be talking about this, along with another new kind of cash advance.

Cash advance apps offer a new kind of financial service that you’ve probably seen around the App Store and heard buzz about online. (I know I get an ad for Dave almost every time I open YouTube.)

It’s so new, we still haven’t quite figured out what to call it—it’s also known as paycheck advance, payday advance, loan app, or money borrowing app.

No matter which term you use, it’s important to differentiate it from a credit card cash advance.

Contrary to what credit cards offer, with often obscenely high interest rates, cash advance lets you borrow money quickly often with no required fees.

In case you’re looking for a cash advance right now, I’ll drop some of our highest-rated cash advance apps below. If you’re just here to learn, keep scrolling!

Table of Contents

1. How do cash advances work?
   1. Cash advance apps
   2. Credit card cash advances
   3. Payday loans
   4. Bank or credit union cash advance
2. How much can I borrow with a cash advance?  
3. How much does a cash advance cost? 
4. How do I repay a cash advance?
5. Where do I get a cash advance?

How do cash advances work?

Cash advances are a quick way to borrow money when you’re in a tight spot. They’re designed to offer short-term financial relief by providing you with a small influx of cash that’s paid back on your next payday. 

The application process varies depending on which cash advance method you choose, but it’s usually fast and does not require a credit check.

How quickly you receive your cash also depends on the type of cash advance. With payday loans, you receive your money instantly but with apps, you may have to pay an additional fee for immediate access to funds. 

Repayment is automatic, with the amount owed withdrawn from your account the next time you get paid. 

Types of cash advances

Several different types of cash advances are available to consumers. Below are the most common types. 

Type	What to know
Cash advance apps	No interest, subscription or tip-based. Instant access to small amounts of money, typically repaid by next payday. Popular apps include Brigit, Dave, and Empower.
Credit card cash advances	Borrow against credit card limit with high fees (3% to 5%) and high interest rates (~10% higher than purchases). No grace period; interest accrues immediately.
Payday loans	Short-term, high-fee loan (up to $30 per $100 borrowed). Must be repaid by next payday. APR can reach 300% or higher, with risks of NSF fees.
Bank or credit union advance	Requires an existing account with the bank/credit union. Can be issued against a credit card or as a loan. Interest rates are higher than apps, with slower approval times.

Cash advance apps

Recommended: Yes

A cash advance app is exactly what it sounds like: an mobile application that allows you to quickly borrow small amounts of money. Cash advances are short-term loans usually paid back on your next payday. Some of the most popular cash advance apps on the market include Brigit, Current, Dave, and Empower. 

These apps typically work on either a subscription (like Beem) or tip model, so they don’t charge interest on loans, though you may need to pay a fee for instant access to cash. They’re a great option when you’re short on funds but don’t want to fill out a loan application or endure a credit check.  

Credit card cash advances

Recommended: No, due to high APR

A credit card cash advance allows you to borrow money against the available limit on your credit card. To do this, you can either withdraw cash from an ATM, go to a bank, or use a convenience check provided by your credit card company. You can typically borrow only 20% to 30% of your total credit limit, depending on your card issuer’s terms.

Most credit cards charge a fee for cash advances, roughly 3% to 5% of the amount borrowed. You’ll also pay a special interest rate on cash advances that’s higher than interest on purchases; the difference can be up to 10% higher. Plus interest will start to accrue as soon as you withdraw money with no grace period.

The high fees and interest on credit card cash advances add up quickly, which makes cash advance apps more appealing; with no interest or credit check required, they’re more accessible and budget-friendly than a credit card cash advance.

Payday loans

Recommended: No, due to predatory practices and exorbitant APR

A payday loan is an expensive, short-term loan that’s often viewed as predatory lending. Payday loans allow you fast access to cash with loan amounts based on the size of your next paycheck (between 10% to 30% of your wages). You can apply for a payday loan in person or online with your pay stub, identification, and banking information.  

Instead of using interest rates, payday loans charge a set fee between $15 and $30 for every $100 borrowed. Loans must be paid back in full by your next payday. When you translate the high fees and short repayment period into an annual percentage rate (APR), the cost of a payday loan can skyrocket up to 300% and higher, so it’s best to consider alternatives.

Payday loans are repaid either through a pre-written check dated for your payday or an automatic withdrawal, which can lead to insufficient funds charges if your balance is low. Cash advance apps offer more flexibility; some apps allow you to set your own repayment terms or extend your due date up to three times.

Bank or credit union cash advance

Recommended: Maybe, depending on lender terms and APR

You may qualify for a cash advance through your bank or credit union, provided you already have an open account. The loan could either be issued against a bank-sponsored credit card or as an installment loan, depending on the lender. This isn’t a widely offered feature, so check with your financial institution to see if a cash advance is available. 

Apps offer several advantages over cash advances through your bank or credit union. Financial institutions will likely charge high interest rates while cash advance apps typically charge no interest—they make money off subscriptions and/or tips. Getting cash through an app is also much easier because no formal application is required

How much can I borrow with a cash advance?  

The amount you can borrow with a cash advance depends on the type. Credit cards tend to have higher borrowing limits, while cash advance apps offer shorter repayment terms with lower loan amounts.

Credit card cash advance 

A credit card cash advance lets you borrow between 20% and 30% of your credit limit. So if your credit limit is $10,000, you might qualify for an advance between $2,000 and $3,000.

Credit card companies might set the limit based on your credit score. In that case, the higher your score, the more you can borrow via a cash advance from your credit card. 

How much you can borrow with a cash advance app

Cash advance apps typically allow smaller borrowing amounts compared to the total credit limit on a credit card. However, they differ in how they structure limits. For example, cash advance apps often let you borrow between $10 and $750, with repayment due by your next paycheck—usually within two weeks.

Credit cards, in contrast, may allow daily cash advances of several hundred dollars, but these are limited by your overall cash advance credit line, which is often a fraction of your total credit limit. Here’s an overview of the borrowing limits from popular cash advance apps:

App	Advance amounts
EarnIn	Up to $150/day, up to $750/pay period
Dave	Up to $500
Current	$50 – $750
Tilt	$10 – $300
Brigit	$50 – $250
Cleo	$20 – $250
Floatme	$10 – $100

How much does a cash advance cost? 

Pricing structures can vary for cash advances, so it’s important you understand how each option charges for this service. 

Credit card cash advance fees

Most credit cards come with two sets of fees in one transaction:

1. Upfront fee: When you take out a cash advance, many creditors will add a 3% to 5% fee to your balance. So if you take out $1,000 and a 5% fee applies, you’ll owe $1,050.
2. Immediate interest: Your cash advance balance will immediately begin accruing interest at a higher rate. Check your credit card agreement to see how this rate compares to your purchase APR.

Calculate the amount you can expect to pay for your credit card cash advance based on upfront fees and the time it will take you to pay off your balance.

Cash advance app fees

Cash advance apps may charge in a few ways. Some have flat fees, while others charge a percentage of the borrowed amount. Flat fees are more straightforward, but remember to calculate them as a percentage of your cash advance to help you compare options.

For instance, a $1 fee on a $10 cash advance is the equivalent of a 10% fee. But a $1 fee on a $100 cash advance is only 1%. So it’s important to compare both dollar amounts and percentages based on the amount you plan to borrow.

This table shows several pricing structures for instant advance fees. A higher fee applied to a higher advance may be cheaper than the lower range charged on a smaller cash advance. 

App	Instant advance fee
EarnIn	$2.99 – $4.99
Dave	3% – 5%
Tilt	$1 – $8
Cleo	$3.99
Floatme	$3 – $7

How do I repay a cash advance?

Here’s how repayment works for both types of cash advances.

Credit card cash advance

A cash advance is included in your overall credit card balance. You have a minimum payment each month and can pay that or a higher amount to lower your balance and accruing interest. 

Paying more than your minimum amount is ideal because credit card companies must apply any extra payments to your highest-interest balance. Because cash advances often have a higher rate than other credit card transactions, this strategy helps you avoid accruing even more debt. 

Cash advance app

Most cash advance apps require you to connect to your bank account to reschedule an automatic payment. The due date is usually the next payday. Because cash advance apps are smaller than credit card cash advance limits, the whole amount is due right away.

The benefit of this payment structure is that you don’t accrue ongoing interest with a longer repayment plan. Instead, you pay a single fee for an advance that can come straight out of your bank account on payday.

If I had a client who needed quick cash, my recommendation would depend on the amount they needed. If it is a small amount that can be covered by a cash advance and that they can repay by the next pay period, I would recommend a cash advance app. 

If the amount is greater than they can take out from a cash advance app or they can’t repay the cash advance loan in a short period, I would recommend the credit card cash advance and work with them to create a realistic but committed repayment plan.

Erin Kinkade, CFP®

Where do I get a cash advance?

Before choosing a credit card cash advance, remember to compare apps as well. We recommend the following six best cash advance apps that can help you borrow quick cash without ongoing fees and interest that increase your debt.

If borrowing from your credit card makes more sense, you can get a cash advance in several ways. First, you can withdraw funds from an ATM. After inserting your card and logging in, choose a cash withdrawal or advance option, and then select your credit card from the available accounts.

At this point, you’ll also see the fees your card issuer charges for the cash advance. If you agree, finalize the transaction and get the cash from the ATM. You can also go to your bank teller and request cash or get a cash advance check to pay someone from your credit line.