For those of you who aren’t aware, a cash advance on your credit card is basically the same as taking out a loan from the bank except in that this particular loan comes from the available credit you already have on your credit card. That means you’ll need to pay back the money you borrowed, plus interest.
When you take out a cash advance on your credit card, it’ll appear as a charge on your account, and like any charge, it’ll accumulate interest until it’s paid off. It’s also worth noting that the interest rates on cash advances are typically higher than your everyday credit card purchases.
That’s why it’s a good idea to look into other lending options before turning to your credit for financial relief. Here are 4 credit card cash advance alternatives you could consider:
Stuck in a financial rut? Before turning to your creditors for help, turn to somebody who is a little more understanding of your situation and therefore, can be more sympathetic when it comes to paying them back. Don’t be afraid to reach out to family or even a close friend when times get hard. As the ancient proverb goes, “You have not, because you ask not.”
Most 401(k) organizations will allow their contributors to borrow money from their own account. Interest rates and fees will vary depending on who you have your 401(k) set up with, but it’s likely a lot more affordable than borrowing from a creditor. If you have a 401(k) set up with your employer, you can use it to help yourself out of a sticky financial situation.
If your credit’s in a good place, you could always take out a personal loan from your bank. It’ll be cheaper than taking out a cash advance on your credit card, and since the interest on personal loans is a lot lower, you could get it paid off a lot faster, too. Talk to someone at your local bank today and see if a personal loan might be a good option for your current financial situation.
As a last resort, you could always speak with your local title pawn lender for same-day cash options. Title pawns near you require no credit check and most car owners can get cash right away after a quick and painless approval process.
Plus, you get to keep your car while the lender holds the title as collateral. Granted, this type of loan is not for everyone, but it might be an option to consider when all other options don’t work out.
To prevent yourself from falling into a financial pothole in the future, it helps to up the ante on your income. If you’ve been with your employer for years and years, try asking for a pay increase.
You could also try applying for a higher position that pays more. But if making more money within your current job isn’t an option right now, you could always find a side hustle. It’s more work now, but it’ll pay off when you’re ready to take on the next financial emergency without relying on a cash advance to do it.