The truth about fast money: What to know first
When you’re short on money, a cash advance can feel like a quick fix. According to the Federal Reserve, 37% of U.S. adults say they wouldn't have the cash or equivalent to cover a $400 emergency. That’s why cash advances exist — to give people quick access to money when they need it most. But quick doesn’t always mean cheap.
This guide explains what a cash advance is, how it works, the different types, and better alternatives you may want to consider.
What is a cash advance?
A cash advance is a short-term loan that gives you quick access to cash. The most common type is a credit card cash advance, where you withdraw money from your credit line. But cash advances can also come from payday lenders, merchant financing, employer paycheck advances, or even mobile apps.
What is a cash advance on a credit card — and how does it work?
The most common type of cash advance happens through a credit card. Instead of swiping to make a purchase, you use your credit line to take out cash. Here are a few ways it typically works:
- ATM – You can use your credit card at an ATM to withdraw cash, just like a debit card.
- Online – Some credit card issuers allow you to request a transfer online directly to your bank account.
- Convenience check – Card issuers sometimes mail “convenience checks” that you can use to withdraw money against your credit line.
While this seems fast and easy, interest rates on credit card cash advances are usually higher than normal purchases — and they start accruing immediately, with no grace period.
Other types of cash advances
Beyond credit cards, there are other ways people can access cash quickly.
Merchant cash advance
This is a financing option for businesses, where lenders give an upfront sum in exchange for a portion of future sales.
Payday loans
These are short-term loans tied to your next paycheck and often come with extremely high fees and APRs.
Credit card cash advance
This is the standard cash advance on a credit card, where interest starts accruing immediately, with no grace period.
Employee cash advance
Some employers allow workers to borrow against their upcoming paycheck. This is usually deducted from future pay periods.
Line of credit advance
If you have a personal line of credit with a bank, you can draw funds when needed. This usually has lower interest than a credit card cash advance.
Bank-based early direct deposit
Some banks now offer services that release your paycheck to your bank account two or three days early. Examples include Wells Fargo Early Pay, TD Bank Early Pay, Huntington Early Pay, and online financial institutions like Chime, Ally, Current, and Varo.
Advantages and disadvantages of cash advances
Like most financial tools, cash advances have upsides and downsides.
Pros of cash advances
- Fast access to cash
- Multiple options available (credit, employer, app, bank)
- May help cover emergencies
Cons of cash advances
- High fees and interest (especially with credit cards or payday loans)
- Can lead to debt cycles
- Usually not a long-term financial solution
Cash advance costs and fees
Cash advances are almost always more expensive than regular credit.
- Interest rates: Often higher than standard purchase APRs
- No grace period: Interest starts immediately
- ATM and processing fees: Common with credit cards
- Flat fees: Payday and merchant advances may charge upfront costs
Cash advance cost example
If you take a $300 credit card cash advance at 25% APR with a $10 fee and repay in one month, you’d owe about $16 in interest and fees — on top of the $300 you borrowed.
For more details, read our full guide to cash advance apps.
Earned wage access (EWA) apps: A safer alternative
EWA apps like EarnIn, Dave, and Brigit can be an alternative to cash advance apps. EWA apps let workers get part of their earned wages before their official payday. For example, EarnIn's Cash Out1 feature lets you get up to $150/day, with a max of $750 per pay period — no interest, no mandatory fees (just optional tips2), and no credit checks. It's not a loan; it's simply a way to get your money when you need it, rather than waiting for the traditional payroll cycle.
What are the differences between cash advances and EWA?
While both cash advances and EWA apps can release cash quickly, they are not the same methods. For example:
- Cash advance apps usually come from banks, lenders, or credit cards. They function as short-term loans and almost always include fees and interest.
- Earned wage access (EWA) apps, like EarnIn, come from employers or fintech companies. These are based on wages you’ve already earned, so they don’t create debt.
Here’s a comparison of features for cash advances vs. EWA:
- Source. Bank or credit card vs. employer/app
- Cost. High fees vs. usually lower fees or no interest
- Repayment. Adds to credit card balance vs. deducted from paycheck
For workers living paycheck to paycheck, EWA apps are often a safer alternative than high-interest cash advances.
Choosing a cash option that’s right for you
Not all cash apps are the same. Use this quick chart to compare cash advances and EWA:
Type | Best for | Costs | Risks |
Credit card cash advance | Emergency cash | High APR; ATM fees | Debt builds quickly |
Payday loan | No credit access | Extremely high fees | Debt cycle risk |
Employee cash advance | Workers needing early pay | Usually low or no cost | May reduce future checks |
Earned wage access (EWA) apps | Workers with banked wages | Limited daily/weekly access | |
Bank early direct deposit | Bank customers | No added cost | Only 2–3 days earlier |
What you may not know about cash advances
Before choosing a cash advance, it’s important to understand the fine print:
- Some banks cap the amount you can withdraw, often $200–$500.
- Interest compounds daily, making balances grow fast.
- Using too many cash advances can hurt your credit if you can’t repay on time.
Alternatives to cash advances in 2025
Instead of relying on high-cost cash advances, consider:
- Budgeting apps to smooth out spending gaps.
- Emergency savings funds.
- 0% APR credit card promotions.
- Earned wage access (EWA) apps, like EarnIn, which give you access to wages you’ve already earned without mandatory fees.1
FAQs about cash advances
What is a convenience check?
A paper check your credit card issuer sends, allowing you to draw against your credit limit.
Do cash advances hurt your credit?
Not directly — but high balances and missed payments from cash advances can lower your score.
How much cash can you get with a cash advance?
It depends on your credit limit and issuer rules, but usually less than your total available credit.
How does interest on a cash advance work?
Interest starts accruing immediately, with no grace period. This makes cash advances more costly than regular card purchases.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
This Blog was sponsored by EarnIn. While the author received compensation, the information shared is grounded in independent research and intended to provide helpful and accurate guidance to readers.
EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out.
1
A pay period is the time between your paychecks, such as weekly, biweekly, or monthly. EarnIn determines your daily and pay period limits (“Daily Max” and “Pay Period Max”) based on your income and financial risk factors as outlined in the Cash Out Maxes section of our Cash Out User Agreement. EarnIn reserves the right to adjust the Daily Max and Pay Period Max at its discretion. Your actual Daily Max will be displayed in your EarnIn account before each Cash Out.EarnIn does not charge interest on Cash Outs or mandatory fees for standard transfers, which usually take 1–2 business days. For faster transfers, you can choose the Lightning Speed option and pay a fee to receive funds within 30 minutes. Lightning Speed may not be available at all times and/or to all customers. Restrictions and terms apply; see the Lightning Speed Fee Table and Cash Out User Agreement for details and eligibility requirements. Tips are optional and do not affect the quality or availability of services.
2
Tips go to EarnIn and help us provide tools such as Credit Monitoring for free and keep Lightning Speed fees low. Your service quality and availability aren’t affected by whether you tip or not.3
Lightning Speed is an optional service that allows you to expedite the transfer of funds for a fee. Depending on the product, the fee may be charged by EarnIn or its banking partner. Lightning Speed may not be available in all states and/or to all customers. Restrictions and terms apply. See the Lightning Speed Fee Table for details.
