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What Is a Cash Advance?

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In a simple word, cash in advance is a short term loan that a borrower takes against a credit card up to a specific limit. Unlike a simple purchase that we make with a credit card, a borrower applies for a loan in a form of cash.

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You just need to go to an ATM or a bank and withdraw cash there. Not every bank allows borrowers to turn the whole credit limit into a cash advance loan. Some credit cards allow withdrawing up to two hundred dollars and it’s not always enough. Cash advance online can become a reasonable alternative to simple loans then.

Many online services offer online cash advance. This is the same short term loan that a borrower has to pay off until the negotiated date.

This option allows borrowing bigger amount and, probably, facing more flexible conditions.

Usually, credit card companies charge a fee for borrowing cash advance, borrowing with ATM, or offer higher interest on such credit cards.

Online companies that offer cash advance loans don’t provide borrowers with cash itself. In such cases, we speak about a short-term loan with a very fast approval and a relatively small amount (so, a borrower can pay it off in one or two payments).

These loans are similar to simple payday loans but they aren’t related to the payday.

Basic Points You Have to Be Aware Of

A common thing for all who get cash in advance is that they experience difficulties with paying back this loan.

Almost 80% of borrowers apply for another loan or roll the cash advance over within 2 weeks after applying for the first cash in advance.


In fact, it might become an endless cycle being followed by increasing debt if the borrower does not pay the debt back on time.

That is also happening because most of cash advance lenders are providing with another loan to ones who have already borrowed from them. The scheme is simple – the more one applies for the loan, the more he pays the interest. If one stops making payments and defaults, the lender can and will start the legal actions against him.

Are cash in advance loans so bad? Only if you are not able to pay the debt back as it has been agreed. You might consider it a very expensive type of a short-term loan. If you need money, you can try other loan options, such as installment or personal loans, which might be more safe and affordable.