Because cash advances can be expensive in terms of fees, interest, and restrictions, learning how to get cash from a credit card without a cash advance is a wise decision that many people strive for. Here are some alternative ways to take cash from credit cards that do not incur fees or interest. Hanfincal will demonstrate this right now.
1. The problem with credit card cash advances
1.1. Credit limit
People usually make the mistake of believing they will receive a cash advance equal to their credit limit. On the other hand, credit cards typically have a significantly lower credit limit for cash advances compared to the total limit of the card. For example, your credit card may have a total credit limit of $5,000 but a cash advance limit of only $750.
Most credit cards charge a 3% to 5% fee for cash advances. So, even if you only need a $1,000 advance for a day, it will cost you $30 to $50. Then there’s the ATM fee, ranging from a few dollars to as much as $10 in some areas.
1.3. Grace period
With a cash advance, there is no grace period for interest. Most credit cards will not apply interest charges to your account until after the due date, which means you can pay off the entire credit card statement balance before the due date and pay no interest. However, there is usually no grace period with cash advance APRs. Interest begins to accumulate the day you take the advance.
1.4. Interest rate
You’re probably aware that the interest rate on a cash advance is excessively high. Many credit card companies have two interest rates: one for regular purchases and another for cash advances. The difference between the two annual percentage rates (APRs) can be as much as ten percentage points in some cases.
2. How to get cash from credit card without cash advance?
There are 4 ways to get cash from credit cards without cash advance are buying prepaid cards, making purchases for friends, retail arbitrage, and shifting your bills around.
2.1. Buy prepaid cards
You can get cash from credit card without cash advance by using prepaid cards. There are a few options, but the most direct and immediate is using your credit card to purchase a Mastercard gift card with sufficient cash and withdraw that cash from an ATM.
You can go to an ATM and withdraw the cash you require once you have received your PIN from the gift card issuer. Make sure that any fees, such as ATM fees, activation fees, and transaction fees, are less than the cash advance fee on your credit card.
Alternatively, you can use your credit card to purchase a store gift card from a popular retailer, such as Walmart, Target, or another large retailer, and then sell it online. CardCash and Raise are two websites that buy and sell unwanted gift cards.
2.2. Make purchases for friends
If you have the opportunity, you can ask your friend if you can purchase the item with your credit card and pay with cash. If your friend agrees, you will receive all cash you require with no advance or ATM fees.
The following are some additional advantages for you and your friend:
- Additional discounts: If you have a store credit card account with the retailer where your friend intends to purchase the item, you may be eligible for a discount by using the card. You can give this discount to a friend or keep the extra money for yourself.
- Credit card reward points: You will earn points based on your credit card purchases if you have a credit card that offers rewards. These credit card rewards can be used to obtain free or discounted gifts or statement credits.
- Extended warranty: Some credit cards offer a free extended warranty on large-ticket items. These warranties typically extend the manufacturer’s warranty by about a year.
2.3. Retail arbitrage
Retail arbitrage is purchasing a discounted item in a retail store and reselling it for a profit on sites such as eBay, Amazon, or Facebook Marketplace. If you use a credit card, you can convert your credit limit to cash with each sale.
You’ll also receive any additional benefits with the credit card, such as rewards points, cash back, statement credits, and more.
This is a slower process than others, but it has no fees — only interest charges, if applicable — and the potential for profit along the way.
2.4. Shift your bills around
If you use your credit card to pay for something that you would typically pay for with cash, go ahead and do so. This could be especially useful if you get a new credit card with a no-interest introductory offer that gives you time to catch up without accruing interest.
Compare your total costs before deciding on the most cost-effective way to get cash. It is good if the fee is less than the cash advance fee you would otherwise pay, but even if it isn’t, if you aren’t charged a higher cash advance APR, it may be worth it.
3. Other alternatives to cash advances
3.1. Balance transfer checks
Some credit card companies offer special low- or no-interest deals to customers who transfer balances from other credit cards. In some cases, these deals will include convenience checks that you can write to anyone, including yourself.
You can write one of these checks to yourself and deposit it into your bank account to take advantage of the special APR.
3.2. Personal loans
You may be able to secure a small personal loan to cover your immediate cash needs if you have a favorable credit report and score. Small loans are available from various financial institutions, ranging from bank branches to credit unions to online lenders.
How to get cash from credit card without cash advance? All of the alternatives that Hanfincal listed above can help you avoid paying unnecessary fees when withdrawing cash from a credit card. While these alternatives may be less cost-intensive than a cash advance, keep in mind that you are still borrowing money with your credit card.
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