Cash advances can be a costly way to access money quickly, but there are ways to minimize the fees and interest associated with them. The best way to avoid cash advance fees is to not make a credit card cash advance in the first place. If you need to access cash, there are other options available, such as prepaid cards, P2P lending, and low-cost payroll advances. You can also take advantage of introductory offers from credit card companies, such as Chase Slate's 15 months interest-free and no transfer fee.
If you can't avoid the transaction altogether, you can minimize the cash advance fee you pay by reducing the amount of cash you withdraw from your credit card. The ideal way to minimize cash advance costs is to borrow only the absolute minimum you need. The lower the amount of your cash advance, the less you have to pay in fees and interest. You can also buy a Mastercard gift card with a sufficient amount of cash with your credit card and withdraw that money from an ATM.
This is a direct and immediate way to get cash without incurring a transfer fee. Another option is to take out a secured loan, such as a home equity loan or line of credit. These loans are backed by collateral and often have less stringent credit requirements than unsecured loans. You can also consider P2P lending, which is a system where people borrow money from investors instead of banks.
Credit requirements are less stringent and pass rates are higher. Payday loans generally charge triple-digit interest rates of 300% to 500% and above, so it's best to avoid them if possible. However, if you need to buy some time before your next paycheck, you might consider a service like Plastiq to deal with some bills. For a 2.85% service fee, Plastiq will charge your card with the bill, write a check to the vendor in your name, and then mail it to you. If you're under the age of 59 and a half, you can use your Roth IRA as an emergency fund without penalty or additional taxes. However, make sure you don't withdraw more than you contributed, even if the account has grown in size.
Earnings from your contributions are subject to taxes and penalties. With the Wells Fargo Reflect℠ card, for example, you can take advantage of a nearly two-year interest break with an introductory APR of 0% for 18 months from account opening on eligible purchases and balance transfers, followed by a continuous APR of 13.24%-25.24% variable APR. Sometimes it's not feasible to spend a large sum of money all at once, whether you're short on money or not. Buy now and pay later providers allow users to split purchases into small installments that you can pay over time, usually three to 12 months. You may consider using the cash advance feature of your credit card if you need quick access to cash instead of putting something on credit. Your credit card statement should show you the different interest rates for your purchases, cash advances, and balance transfers. Instead of paying interest and cash advance charges, transfer a large balance to a card that does not offer zero interest for a period of time and use the money the card would have paid as a cash advance. If you use a rewards credit card for your bill, you can also help defray that initial charge. We recommend avoiding a cash advance altogether and opting for some alternative options that have better conditions.
