What is a Cash Advance?
You can borrow money against your credit card limit with a cash advance. It’s essentially like taking out a short-term loan using your credit card. A cash advance can be obtained online, in person at a bank, or occasionally even over the phone.
Can You Do a Cash Advance Over the Phone?
The answer to this question is a bit complicated. Technically, it is possible to do a cash advance over the phone However, it is not a common practice and many banks and credit card issuers do not allow it This is because cash advances over the phone are considered to be high-risk transactions.
Why Are Cash Advances Over the Phone Considered High-Risk?
There are a few reasons why cash advances over the phone are considered to be high-risk:
- Identity theft: It is easier for someone to steal your identity and use your credit card to get a cash advance over the phone than it is to do so in person.
- Fraud: Fraudsters can use stolen credit card numbers to get cash advances over the phone.
- Chargebacks: If you do not recognize a cash advance that was made over the phone, you can dispute it with your credit card issuer. This can lead to a chargeback, which can be costly for the bank or credit card issuer.
How to Get a Cash Advance Over the Phone
If you are able to find a bank or credit card issuer that allows cash advances over the phone, you will need to provide the following information:
- Your credit card number
- The expiration date of your credit card
- The amount of cash you want to advance
- Your Social Security number
- Your date of birth
- Your address
- Your phone number
Once you have provided this information, the bank or credit card issuer will process your request. You will then be able to pick up your cash at a designated location.
Alternatives to Cash Advances
If you need cash in an emergency, there are a few alternatives to cash advances that you may want to consider:
- Personal loan: A personal loan is a type of unsecured loan that you can get from a bank or credit union. Personal loans typically have lower interest rates than cash advances.
- Line of credit: A line of credit is a type of revolving credit that you can use to borrow money as needed. Lines of credit typically have lower interest rates than cash advances.
- Payday loan: A payday loan is a type of short-term loan that you can get from a payday lender. Payday loans typically have very high interest rates and fees.
Cash advances over the phone are a high-risk transaction that many banks and credit card issuers do not allow. If you need cash in an emergency, there are a few alternatives to cash advances that you may want to consider.
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Although a cash advance could appear like a simple way to get cash quickly, the interest and fees associated with it could be very expensive. Read the terms carefully before obtaining a cash advance to avoid unpleasant surprises later on. And better yet, avoid a cash advance altogether.
Here, CNBC Select goes over the fundamentals of a cash advance, including what it is, its terms and fees, and better options for instant cash.
Cash advance terms and fees
Although cash advances are a quick and simple way to get money, they frequently have high fees that outweigh any advantages. Examine the terms before taking out a cash advance so you are aware of the hefty fees you will probably have to pay.
- APR for cash advances: Compared to purchases or balance transfers, cash advances have a different, frequently higher, interest rate. As an illustration, the Citi Double Cash Card (C2%AE) offers a 200 percent annual percentage rate on balance transfers for the month of 2018. After that, the variable APR will be 19. 24% – 29. 24%, but a 29. 99% variable APR for cash advances. (see rates and fees. ).
- Cash advance fee: The credit card issuer frequently assesses a cash advance fee, usually equivalent to 3% or 5% of the total amount of each cash advance you request. In this case, for instance, a $250% cash advance with a 5% fee will cost you $12. 50.
- Fee from an ATM or bank: You should anticipate paying a fee to obtain a cash advance when using an ATM or going to a bank.
- No grace period: There is no benefit to cash advances from a grace period. This implies that interest will be assessed to you from the moment you take out a cash advance. That is not the case when you use your card to make a purchase and the issuer grants you a grace period of at least 21 days during which you can pay off your balance in full and avoid paying interest if you pay it off by the due date.
- distinct credit limit: A portion of your total credit limit is frequently set aside for cash advances. It’s possible that you can withdraw just a few hundred dollars.
How a Credit Card Cash Advance Works (and why you shouldn’t do one)
FAQ
How to get $500 instantly?
Can you do a cash advance electronically?
How do I do a cash advance?
How much cash advance can I get on my credit card?
Can I get a cash advance over the phone?
Over the phone: A cash advance processed over the phone transfers money from your credit line to an account of your choosing — such as your checking account or savings account — for you to access. However, not all credit card issuers allow you to complete a cash advance over the phone.
How much is a cash advance on Money app?
The app also provides budgeting tools .2.**EarnIn**: Allows you to borrow up to $100 per day or $750 per pay period with no fees .3. **Dave**: Offers cash advances of up to $500 with a
When should you use a cash advance app?
You’ll also find out when it’s time to consider other options, like using a personal loan or opening a line of credit. Cash advance apps are a type of direct-to-consumer lending. This means they’re offered by lenders that work directly with consumers without going through a middleman.
Where can I get a cash advance?
You can complete a cash advance at an ATM, in person at a bank or — in some cases — over the phone. You should only use credit card cash advances for emergencies due to the cash advance fee and high APR. A cash advance is when you withdraw money against your credit card limit.