What Is a Cash Advance? How They Work
A "cash advance" is a short-term cash loan — but it actually refers to three very different products. The cheapest is a paycheck-advance app (often free); the most expensive is a storefront payday cash advance (391%+ APR). Picking the wrong one can cost 10× more in fees for the exact same amount of money.
The three types of cash advance
When people say "cash advance," they usually mean one of these:
- Credit-card cash advance — withdrawing cash against your credit card's cash limit at an ATM or bank.
- Paycheck advance app — apps like Earnin, Dave, Brigit, or MoneyLion that advance you part of your already-earned pay before payday.
- Payday cash advance — a small short-term loan from a storefront or online payday lender, repaid in a single payment on your next paycheck.
1. Credit card cash advance
Withdraw cash from your credit card at an ATM, bank teller, or with a convenience check. The amount counts against a separate cash-advance limit — usually lower than your purchase limit and visible on your monthly statement. Costs:
- Cash advance APR: usually 25%–30% (higher than your purchase APR)
- Cash advance fee: 3%–5% of the amount, $10 minimum
- No grace period — interest accrues immediately
- ATM fee from the bank ($3–$5)
A $500 cash advance held 30 days typically costs about $35 — pricey, but far cheaper than payday alternatives. The best move with a credit-card cash advance is to repay the same day or the next billing cycle, since interest compounds daily from the withdrawal date.
2. Paycheck advance apps (Earnin, Dave, Brigit, MoneyLion)
These advance you part of your already-earned pay before payday. Most are free or charge a small monthly subscription ($1–$10) plus optional tips. Standard advances range from $20 to $500 and are auto-repaid on your next direct deposit.
The CFPB has flagged some apps as functionally similar to payday loans because tips and "express" fees can push effective APRs above 300% on small short-term advances. Used carefully — small advance, no tip, no express fee, repaid on payday — they're usually the cheapest cash-advance option available. See our cash advance app comparison for limits, fees, and bank-compatibility details.
3. Payday cash advance (storefront or online)
A "cash advance loan" at a payday lender is the same product as a payday loan, just with different marketing language. Loan amounts run $100–$1,000, the loan is due on your next paycheck (14–31 days), and the fee is typically $15–$30 per $100 borrowed. Effective APRs run 300%–600% in the states that allow them. See payday loans, our online payday loans guide, and your state's loan laws for the rules where you live.
Quick comparison
| Type | Typical fee on $300 for 14 days | Funding speed | Best when |
|---|---|---|---|
| Paycheck advance app | $0–$10 | Minutes to 3 days | You need it before payday only |
| Credit card cash advance | $12–$18 | Instant at ATM | You'll repay within a billing cycle |
| Payday cash advance | $45–$90 | Same business day | Almost never — try the other two first |
How to choose between them
- Need under $500 before payday? Start with a paycheck-advance app — almost always the cheapest.
- Already have a credit card with available cash limit? A credit-card cash advance beats payday products, especially if you can pay it off the same billing cycle.
- Need $500–$1,000 with no card and no recurring direct deposit? Compare a small installment loan first — it's almost always cheaper than a payday cash advance over any horizon longer than two weeks.
- Need same-day cash in hand? A storefront cash advance is the fastest, but treat it as the option of last resort.
Smarter alternatives
- Compare cash advance apps head-to-head
- Personal loans for $1,000+ needs
- Credit union Payday Alternative Loan (PAL) — capped at 28% APR, up to $2,000
- Earned-wage access through your employer's payroll (DailyPay, Branch) — usually free
- Negotiating directly with the creditor you owe
Reviewed by Megan Holcomb. See our fact-checking policy.