How to Get Cash from a Credit Card Without a Cash Advance
Cash advances can be helpful, but these alternatives will do nearly the same thing with fewer downsides.
Contributing Writer at Tally
August 18, 2021
When the need for cash hits, but your bank account is low, you have options. One of these is a credit card cash advance.
Credit card cash advances are convenient because you simply use your credit card at an ATM, just like a debit card. However, because of fees, interest rates and other problems, credit card cash advances should be considered a last resort.
Fortunately, there are ways to get cash from a credit card without a cash advance. Here, we’ll cover how to get cash from a credit card without a cash advance. But first, let’s explore how cash advances harm your finances.
The problem with credit card cash advances
It may seem easier to just go to the ATM, enter your credit card PIN and get a cash advance, but there are some reasons why you may want to find alternatives. It all starts with fees.
First, most credit cards charge a 3% to 5% fee for taking out a cash advance. So, if you want a $1,000 advance, that will cost $30 to $50 — even if you only need it for a day. Next is the ATM fee for making the cash withdrawal, ranging from just a few dollars to as much as $10 in some areas.
Next, there’s the higher interest rate. Most credit card companies have two interest rates: one for regular purchases and a higher one for cash advances. In some cases, the difference between the two annual percentage rates (APRs) can be 10 percentage points or more.
On top of the high interest rate, there is no grace period for interest. Most credit cards won’t apply interest charges to your account until after your due date, meaning you can pay off the entire credit card statement balance before your due date and pay no interest. With cash advance APRs, however, there is typically no grace period. Interest starts accruing from the day you take the advance.
Finally, credit cards normally have a significantly lower credit limit for cash advances compared to the card’s total limit. For example, your credit card may have a $5,000 credit limit overall, but its cash advance limit may only be $750.
3 ways to get cash from a credit card without a cash advance
While a cash advance may be easier than an alternative, it comes with serious costs. There are ways to convert your credit card limit into cash without incurring fees, but it takes a little creativity and planning.
Make purchases for friends
Do you have a friend who’s about to make a big purchase with cash? If so, you can ask your friend if you can buy the item on your credit card and take the cash. If your friend is agreeable to this, you’ll get all the cash you need with no advance or ATM fees.
Plus, if you have a 0% APR introductory rate card, you can repay that $1,000 slowly without paying any interest.
Some additional benefits to you and your friend are as follows:
Credit card reward points: If your credit card offers rewards, you will earn the points based on these credit card purchases. You can use these credit card rewards to get free or discounted gifts or statement credits.
Extended warranty: Some credit cards automatically place a free extended warranty on big-ticket items. These warranties are typically about a year beyond the manufacturer’s warranty.
Additional discounts: If you have a store credit card account for the retailer your friend is planning to buy the item from, you may qualify for a discount by using the card. You can either pass this discount on to your friend or keep the extra cash for yourself.
There are a couple of downsides to this option. The most obvious is if you don’t have enough available credit to complete the transaction. You can also end up significantly increasing your credit utilization ratio — your credit card balance relative to your credit limit — which can lower your credit score.
Buy prepaid cards
You can also avoid cash advances and get cash from a credit card using prepaid cards. You can take a few approaches, but the most direct and immediate one is buying a Mastercard gift card with a sufficient amount of cash on it using your credit card and withdrawing that cash from an ATM.
These cards usually don’t come with the PIN required to access the cash, so you must contact the gift card issuer to get it. In some cases, they’ll give you the PIN over the phone, but you may also have to wait for them to mail it to you.
With the PIN in hand, you can go to an ATM and withdraw the cash you need. Make sure to calculate any fees, like ATM fees, activation fees and transaction fees, to ensure they are less than the cash advance fee on your credit card.
Not every Mastercard-branded gift card will allow you to withdraw cash from an ATM. Check the terms before buying the card to make sure this is possible.
Alternatively, you can buy a store gift card from a popular retailer — think Walmart, Target and other large stores — with your credit card then sell it online. Several sites buy and sell unwanted gift cards, such as CardCash and Raise.
Keep in mind that these sites will buy your cards at a discounted rate, so make sure the amount they discount your gift cards is less than you’d pay in cash advance fees. If it’s the same or more than a cash advance fee, then it’s not worthwhile.
Another way to convert your credit limit into cash is using your card for retail arbitrage.
Retail arbitrage is buying a discounted item in a retail store — generally an item on clearance — and reselling it for a profit on places like eBay, Amazon or Facebook Marketplace. If you use a credit card to facilitate this, you can convert your credit limit to cash with every sale.
Plus, you’ll also reap any other rewards that come with the credit card, including rewards points, cashback, statement credits and more.
This may be a slower process than other options, but it comes without fees — only interest charges, if applicable — and has the potential for profit along the way.
Other alternatives to cash advances
If you need cash, but none of the above methods will work for you, there are other alternatives to cash advances.
With a favorable credit report and score, you may be able to secure a small personal loan to cover your immediate need for cash. Many financial institutions offer small loans, from bank branches to credit unions to online lenders. Many times, they can deposit funds into your bank account the next business day.
Balance transfer checks
Some credit card companies offer special low- or no-interest deals to transfer other credit card balances onto them. In some cases, these offers will include convenience checks you can make out to anyone, including yourself.
You can make one of these checks out to yourself and deposit it into your bank account while also enjoying the special APR.
Remember that these typically come with a 3% to 5% fee, so make sure that’s lower than the fees you’d pay for a cash advance.
There are options to help you avoid cash advances
Cash advances can be helpful, but with their added fees and interest rates, they should be a last resort. They’re not only costly, but they can drag your credit score down and lead to unnecessary financial stress.
With alternatives like buying items on credit for friends and taking cash payments, buying and selling gift cards or retail arbitrage, you can convert your credit limit to cash without the added fees of a cash advance. You just have to be willing to think outside the box.
If you’re in a bind with credit card use — whether it’s cash advances or regular purchases — Tally’s credit card repayment app can help.
It not only streamlines your credit card payments into one monthly payment, but it also includes a lower-interest line of credit1, if you qualify, that you can use to pay off your higher-interest credit card debts.
1To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate.