Credit cards with low cash advance fees

As a rule, taking a cash advance against your credit card is not the best way to get cash on short notice. Nearly all lending institutions charge a combination of high fees and high-interest rates on cash advances. It’s a practice best avoided unless it’s absolutely necessary. But if you occasionally need to take advantage of cash advances, below is a list of the best credit cards to use.

Before we get into our list, we need to disclose that the number of credit cards offering any type of price advantage on cash advances is extremely limited. Most credit card lenders prefer to discourage cash advances since they are seen as a potential indication of financial distress. As a result, they charge higher fees for cash advances than other types of credit card transactions.

For example, credit cards typically charge the higher of $10 or 5% of the cash advance. As well, there’s a higher APR on cash advances. This will typically be in a 26% to 28% range, which is only a couple of points below the penalty APRs (usually 29.99%) charged by most card issuers.

In compiling our list, our criteria include credit card issuers that either charge lower cash advance fees, lower cash advance APRs, or both. But the benefit of the lower cash advance pricing must be weighed against the other benefits offered by each credit card.

With that information in mind, here is our list of the best cash advance credit cards.

Best Cash Advance Credit Card: DCU Visa Platinum

DCU Visa Platinum topped our list because not only does the card not charge a cash advance fee on the amount of the advance, but they also don’t increase your interest rate on the advanced proceeds. In fact, DCU charges the same interest rate on cash advances as they do for balance transfers and purchases. And that rate range is one of the lowest in the credit card industry, to begin with.

The practice of not charging cash advance fees or even balance transfer fees for that matter is more common among credit unions than it is among banks. But just in case your local credit union doesn’t offer no-cost cash advances, you can open an account with DCU.

Even though the credit union is based in New England, you can sign up for an account from anywhere in the U.S. You’ll need to open a checking account to get a credit card, but it’ll be well worth it if you’re a frequent user of cash advances.

Just be aware that the card doesn’t come with many of the other benefits of other major credit cards. For example, there is no sign-up bonus, no ongoing rewards, and no 0% introductory APR.

Runner Up For Best Cash Advance Credit Card: Capital One QuicksilverOne Rewards

Capital One QuicksilverOne Rewards is our runner-up, primarily because the cash advance APR is the same as it is for purchases and balance transfers. There’s no premium APR assigned to cash advances. The card does charge a cash advance fee, but it’s at the lower end of the range for major credit card companies.

But this card didn’t take second place just because of its more relaxed cash advance fee structure. The card comes with unlimited cash back on all purchases, as well as a very low annual fee. All that’s packed into a credit card that’s designed for those with average credit, and that’s why we like this card.

Best Cash Advance Credit Cards

1. DCU Visa Platinum

Best for: No extra cost for cash advances.

DCU Visa Platinum is the perfect credit card if you want a no-cost cash advance. The card has a lot of compelling features and the no-cost cash advance is only one of them. As we mentioned earlier, you’ll need to open a checking account to apply for a credit card, but there are plenty of benefits with the card if you do.

For example, whether you make a purchase, a balance transfer, or a cash advance, there are no fees and no increased APR. DCU also offers two other no-fee cash advance credit cards, though they come with higher regular interest rates.

DCU Visa Platinum card features:

• Cash advance fee: None
• Annual fee: None
• Sign-up bonus: None
• Rewards: None
• 0% introductory APR: None

2. Capital One QuicksilverOne Rewards

Best for: Average credit.

The Capital One QuicksilverOne Cash Rewards Credit Card takes our Number 2 spot because while they have a standard low-end cash advance fee of the higher of $10 or 3% of the advance taken, they don’t charge a higher rate on the cash advance balance. And what really makes this card attractive is that it’s available for those with average credit.

The favorable cash advance fee structure aside, the card comes with a very low annual fee and provides unlimited 1.5% cash back on all purchases.

Capital One QuicksilverOne Rewards card features:

• Sign-up bonus: None
• Rewards: Unlimited 1.5% cash back on all purchases

3. Capital One Venture Rewards Credit Card

Best for: Reasonable cash advance APR with very generous sign-on bonus and rewards.

The Capital One Venture Rewards Credit Card has the same cash advance fee structure as the Capital One QuicksilverOne Rewards card. And though it technically doesn’t have a higher APR for cash advances, it nonetheless charges the highest regular APR possible on those transactions.

Because of the sign-up bonus and the ongoing rewards, we were tempted to put this card in second place. That’s particularly true since both the bonus and the rewards are among the best in the industry. But the card does require excellent credit, which puts it a notch below its sister card, at least as far as cash advances are concerned.

Put another way, this is an excellent credit card to have if you never plan to do a cash advance. And a reasonable one if you do.

Capital One Venture Rewards Credit Card features:

• Sign-up bonus: 75,000 bonus miles after spending $4,000 in purchases in the first three months of opening the account
• Rewards: Earn 2X miles for every dollar spent on every purchase, every day, unlimited

4. Bank of America® Customized Cash Rewards

Best for: Reasonable cash advance fee structure with generous 0% introductory APR.

Bank of America® Customized Cash Rewards is also at the low end of the cash advance fee range for major credit cards and charges only a slightly higher APR than for regular purchases. But the card is packed with benefits, including an easy-to-qualify-for sign-on bonus and generous ongoing rewards.

Bank of America® Customized Cash Rewards card features:

• Sign-up bonus: $200 after spending $1,000 within 90 days of opening your account
• Rewards: 3% cash back in the category of your choice; 2% cash back at grocery stores and wholesale clubs, 1% for all other purchases.

5. BankAmericard® Credit Card

Best for: Reasonable cash advance fee structure with no penalty APR.

The BankAmericard® Credit Card has a cash advance fee structure similar to the Bank of America® Customized Cash Rewards card. It doesn’t have the sign-up bonus or the ongoing rewards of that card, but it does match it with no annual fee and a 0% introductory APR for 18 billing cycles on purchases and any balance transfers made within 60 days of opening the account.

But what gives this card a leg up on the competition is that there’s no penalty APR for late payments. Everybody misses a payment every now and again and this is one card that won’t penalize you for doing it, at least not on the rate. And if you do need to take a cash advance, this isn’t the worst card to do it with.

BankAmericard® Credit Card features:

• Sign-up bonus: None
• Rewards: None

6. Blue Cash Everyday® Card from American Express

Best for: Frequent shoppers.

American Express had shoppers in mind when it created the Blue Cash Everyday Card. Earn up to $150 back when you shop with PayPal, plus earn $100 back as a statement credit after you spend $2,000 in purchases in the first 6 months of Card Membership for a $250 bonus total! Terms Apply.

This card is impressive-yet-simple and makes it easy to instantly get cash back rewards, even after the sign-up period ends. Plus, there’s no annual fee. Could it get any easier?

Blue Cash Everyday® card features:

• Annual fee: None
• Sign-up bonus: $250 welcome bonus as statement credits when you shop with PayPal and spend $2,000 in purchases in the first 6 months of Card Membership for a $250 bonus total!
• Rewards: 3% cash back at U.S. supermarkets (up to $6,000 per year, then earn 1%); 3% Cash Back at U.S. Gas Stations (up to $6,000 per year, then earn 1%), 3% Cash Back on U.S. Online Retail Purchases (up to $6,000, then earn 1%). You earn 1% back on all other purchases. Terms apply.
• See Rates & Fees

What is a Cash Advance?

A cash advance is when you borrow against a credit card line without a specific purpose. For example, you’re not using the card to make a purchase, or even to pay off another credit card or debt as a balance transfer. You’re simply taking the funds to be used for some other unspecified purposes.

Credit card issuers consider these to be cash advances and will usually charge you a fee for doing so, as well as a higher interest rate. That’s because cash advances are seen as a higher-risk use of your credit card, and even one that can predict default. After all, if you’re taking an advance against your credit card line, you probably don’t have savings or other funds you can tap for short-term needs.

You should also be aware that the grace periods that come with purchases that don’t require you to pay interest on balances paid off within 30 days do not apply to cash advances. Interest will be applied from the day you take the advance against your credit line.

How Cash Advances Work?

A cash advance can be initiated in several different ways. Perhaps the most common is when you use your credit card to get cash at an ATM machine or a bank teller window. This will typically need to be done with an ATM machine or a bank branch that is part of the issuing credit card company’s banking network (but not always).

Some credit cards will also enable you to access cash advances online. You take the advance against your credit line and transfer the funds into a checking or savings account.

Still, others may offer checks with your credit card. When you complete a check and deposit it into a bank account, it becomes a cash advance against your credit line.

Once you receive the cash, it’s immediately charged as an advance against your credit line, and subject to all the restrictions and charges that apply to this type of transaction.

Who Are Cash Advances Best For?

Cash advances usually only make sense if you don’t have any other way to access cash, and you’re facing a true emergency situation. The fees and interest rates make them an expensive way to access cash in the normal course of business. For that reason, they should be used sparingly and only under very limited circumstances.

Now, if you have a credit card that does not charge a cash advance fee or a higher APR like the DCU Visa Platinum you can use cash advances at will. But as you can tell from this list, that’s an unusual situation.

But if you have a credit card that has a low cash advance fee structure and you expect to be able to repay the advance very quickly after taking it, it might also work in certain circumstances.

For example, let’s say you have a credit card that charges the higher of $10 or 3% of the amount of the advance. They also tack on an interest rate of 26.74%. If you take a cash advance of $1,000, you’ll pay a cash advance fee of $30. If you can pay the advance back in just a few days, the impact of the interest rate will be minimal.

But even in that situation, $30 is a lot of money to pay for a short-term loan of $1,000. That’s why even this type of cash advance is best avoided.

What are the Best Alternatives to a Cash Advance?

If you don’t have a credit card with favorable cash advance terms and fees and you don’t qualify for a new one, there are alternatives available:

401(k) loans: If you have an employer-sponsored retirement plan, like a 401(k), 403(b), 457 or Thrift Savings Plan (TSP), you may be able to take a loan against your plan. Generally speaking, the IRS allows you to borrow up to 50% of your vested interest in your retirement plan, to a maximum of $50,000. You will then have up to five years to repay the loan. You won’t need credit to qualify, the interest will be lower than just about any other loan source, and you’ll be paying it to yourself anyway.

Bank personal loans: Most banks and credit unions today offer personal loans. These are unsecured loans made to bank or credit union customers that can be used for just about any purpose. They carry a fairly-low interest rate, and generally have no fees. However, you will need excellent credit to qualify. Use a marketplace like Fiona to try to find the best offer possible. There, it’s possible to see the best loan options and the lowest rates in a process that’s incredibly easy.

Roth IRA withdrawals: If you have a Roth IRA account, you can withdraw your contributions free of income tax and an early withdrawal penalty. Since your contributions are not tax-deductible when made, they don’t create a tax liability even on early withdrawal. The IRS also allows you to withdraw the full amount of your contributions before you take out any accumulated investment earnings.

Low-Interest or 0% Intro APR credit cards: It might sound counterintuitive to use a credit card to help get your bills down, but this will actually give you more time to get back on your feet financially. However, for this to be a viable option, you have to be sure you’ll be able to pay the balance in full by the time the friendly introduction terms end. Otherwise, you could face high interest and even more debt than before.

Family and friends: If you only need a small amount of money and you have the ability to repay the money in no more than a few months, this may be an option. But if you do take a loan from a family member or friend, make sure to strictly observe the terms and fully repay the amount borrowed. Otherwise, the price of this type of loan can be a damaged or lost relationship.

Cash Advance apps: One app that offers an easy way to get Cash Advances is Empower. Empower offers a powerful debit card, the Empower Card. When you deposit your paycheck to the Empower Card, you’ll unlock a few perks.

One is the option to request Cash Advances of up to $250.^ Empower will send the cash directly to your Empower Card and you can immediately use those funds to make purchases or withdraw the money for free from more than 37,000 ATMs nationwide.

There are no late fees or interest to worry about with the Cash Advance. Empower automatically takes the repayment from your next paycheck, making the whole process a breeze.

The second is that you can get access to your paychecks up to two days faster.* This can help if you're low on cash and waiting for payday to replenish your checking account balance.

Financial Advisor: Nothing can replace the sound advice of a financial advisor who truly understands the nuances of your financial situation. Whether in person or virtual, there are a few ways to find an advisor who’s not only suitable but as affordable as possible too. One great tool to use is Paladin Registry, a website that connects people with vetted and highly rated financial advisors that can best help their situation -- plus it’s free to use. SmartAsset is another way to connect with a great financial advisor. After taking a quiz about your finances, SmartAsset will connect you with a financial advisor, while also offering a ton of useful tools to track your money.

Credit Card Cash Advance Terms

• Cash Advance APR: The interest charged on cash advance transactions, based on the amount of the cash advance and the individual's credit score.
• Cash Advance Fee: A fee charged by the institution for each transaction, in addition to the APR. It may be a set fee per transaction or a percentage of the transaction amount.
• Introductory APR: A special low APR offered by the card for a set period of time after joining.

How We Came Up With This List

We first took a look at the credit cards we trust that offer cash advance options. From that list, we culled out the ones offering the easiest terms, lowest APR, and most reasonable fees. From that, we also considered the kinds of introductory rates, rewards, and cash back options that are of most assistance in times when a cash advance is needed. This could range from 0% introductory APR periods or cash back points on everyday shopping.

Pros and Cons of Cash Advances

• Provides immediate access to cash if you have no other source.

• Cash advances usually have a higher APRs than purchases or balance transfers.

• Even if you pay off the advance immediately, you’ll still pay the cash advance fee, which makes it a very expensive way to borrow.

• There is no grace period – interest will begin as soon as the advance goes through.

• If you use cash advances too frequently, the credit card issuer may re-evaluate your credit line – don’t be surprised if your credit line is reduced.

• Regular use of cash advances could be an indication of a lack of savings.

FAQs

Why don’t credit card issuers make cash advance costs the same as balance transfers? Are they basically the same type of transaction?

Actually, they’re not the same type of transaction at all. A balance transfer is where you move debt from another credit card onto another. Not only is that like transferring your existing business to the target credit card, but it also doesn’t increase your total liability. You’re simply moving a debt from one credit card provider to another. The credit card issuer may even incentivize that transaction by providing a 0% balance transfer offer. A cash advance is creating new debt. And it’s doing so for a reason the banks considered to be less than fully satisfactory. Because it indicates a lack of access to cash alternatives, frequent use of cash advances can be an indication of financial difficulties. Since lenders risk-adjust all types of lending, cash advances will carry a higher fee structure than balance transfers.

Can I avoid the higher interest rate on cash advances by paying off the advance immediately?

You can, as long as you have no previous balance on your credit card. But if you already owe a balance, the credit card issuer will blend that with the cash advance. For example, let’s say already owe $5,000 on your credit card from previous purchases. You take a cash advance of $1,000 – then pay back the full amount of the advance three days later. In your mind, the cash advance has been fully repaid and should not be subject to a higher APR. But the bank will prorate your repayment between the cash advance and the previous purchase balance. Since the payment represents 1/6 of the new outstanding balance of $6,000, the balance subject to the purchase APR and the balance subject to the cash advance APR will each be reduced by 1/6. That means you may be paying the cash advance APR for many months into the future.

What’s the best way to avoid needing cash advances?

The primary function of cash advances is to provide access to cash on very short notice. Since it’s an expensive way to obtain cash, the best solution is a combination of a well-run monthly budget and a fully-funded emergency fund. The budget will keep you from needing cash on short notice in the first place, while the emergency fund will be available if there are any holes in that plan.

Final Thoughts

When all is said and done, a beneficial cash advance pricing schedule should not be a compelling reason to choose one credit card over another. Since cash advances are predictably expensive no matter which credit card you use, they’re best avoided entirely. And since you’ll only be making infrequent use of them, lower pricing shouldn’t be a major factor.

Concentrate instead on the overall benefits provided by a credit card. Those include the regular APR you’ll be paying on purchases, as well as the ongoing rewards the card pays, any sign-up bonus offered, and a 0% introductory APR. Those will have a much greater impact on the overall cost of your credit card than any reduced cash advance fee structure.