You need to make a large cash purchase, and paying with a debit card isn’t an option. Neither is cash back from a retailer or a withdrawal from an ATM location near you since you need more money than these two methods allow you to access. Are you completely out of luck?
Not necessarily. You may be able to request a debit card cash advance to get the funds you need.
What is a Cash Advance?
The term, cash advance, is typically associated with credit cards. If you have a credit card that allows cash advances, you can withdraw this amount (up to the limit) from an ATM, and the amount you borrow will be factored into your outstanding balance. Unfortunately, interest will also start accruing right away – often at a higher rate – since there’s no grace period on cash advances made from credit cards.
What Is a Debit Card Cash Advance?
A debit card cash advance is just like any cash advance, except it comes from your debit card. The bank provides an overdraft if you request a debit card cash advance.
Can You Get a Cash Advance on Your Debit Card?
You can also get a cash advance on your debit card by visiting any bank or credit union that offers this service. If they honor your request, the funds will be pulled from your checking account and provided to you at the counter.
How Much Does It Cost to Get a Debit Card Cash Advance?
Most debit card cash advances are subject to a fee – typically a percentage of the total amount you withdraw. Inquire with your financial institution to confirm the cost, as it varies.
How It Differs from a Credit Card Cash Advance
Credit card cash advances usually let you borrow more money since it’s based on your credit limit. A debit card cash advance results in an overdraft. Both of these cash advances are subject to fees. The main difference is that a credit card cash advance uses your credit limit, while a debit card cash advance uses your checking account.
Some banks also offer overdraft protection services, where you can have a negative balance of up to $100 without incurring any overdraft fees.
Pros and Cons of Debit Card Cash Advances
These are some of the things to consider before tapping into your bank account for a debit card cash advance.
Advantages
- You receive extra cash: It may be a good idea to use a debit card cash advance if you want funds quickly. You won’t have to wait multiple business days to get approved for a loan or a line of credit.
- It’s available to people who don’t have the best credit: These transactions are available for anyone, even if you do not have the best credit score. While the same perk applies to credit card cash advances, you need a credit card account with a low enough balance to receive a cash advance.
- Avoid more expensive financial products: Credit card issuers charge excessive fees and have high interest rates. You can avoid these additional fees and keep your costs low with a debit card cash advance.
Disadvantages
- High fees: You will have to pay a cash advance transaction fee every time you initiate a cash advance. Some of these fees can get quite high and resemble a high APR on a loan. You should review the issuer’s conditions before proceeding.
- Negative debt cycles: Relying on debit card cash advances too often can whittle away at your savings. While a cash advance can help with short-term expenses, relying on it too often is one of the ways people fall behind on their financial goals. You should assess your financial situation before getting a cash advance.
- Your bank account can get closed: If your bank account is negative for 30-60 days, the financial institution may close your account. You’ll then hear from a debt collector about the remaining balance. Credit card cash advances don’t present this risk, but falling behind on that type of cash advance can have a negative impact on your credit score.
Should You Get a Debit Card Cash Advance?
You may wonder if a debit card cash advance is a sensible option. It could be in these circumstances:
- The amount of cash you need exceeds the ATM withdrawal limit.
- Your bank or credit union doesn’t have branches in your area.
- You’d prefer not to advance cash from a credit card to avoid paying interest.
How to Get a Debit Card Cash Advance
You can get a debit card cash advance through one of the following choices.
Using an ATM
ATMs are great for cash withdrawals, but you can also use them to make cash advances. Tapping into extra funds can make it easier to cover various expenses.
Going to a Bank Branch
You can visit a physical branch instead of going to your bank’s website to initiate a debit card cash advance. You can speak with a representative at the company and get a better understanding of the total cost of a cash advance. It’s usually a flat fee.
Online Banking Options
Some online banks have cash advance options. For instance, Dave and SoFi are some of the online banking companies that let you initiate cash advances. You can also go to your bank’s mobile app or online dashboard to facilitate a cash advance. Reviewing your information online will also give you a better perspective of your payment history, a key detail that impacts your cash advance limit.
Costs and Fees Associated with Debit Card Cash Advances
Debit card cash advances have several fees to keep in mind. Here’s what you should know.
Potential Fees and Charges
Most debit card cash advances come with a flat fee. You can pay additional fees if you do not pay your debit card cash advance in time.
Interest Rates and How They Apply
Some companies charge interest rates for debit card cash advances, but it’s usually overdrafts instead. You should read the fine print before committing to a cash advance.
Comparing Costs with Other Cash Advance Options
Reviewing costs for multiple cash advances can help you find the best deal. You can also seek out alternative methods for accessing cash, such as a short-term loan. Knowing all of your choices and comparing each one can help you save money each time you need to access additional cash.
Alternatives to a Debit Card Cash Advances
Unfortunately, a cash advance on a debit card may not be viable if you need more funds than you have in your checking account. In this case, here are some alternatives worth considering:
Request a Salary Advance
Consider asking your employer to release your paycheck early. Of course, there are no guarantees they’ll honor your request, but it’s worth inquiring.
Borrow From Friends and Family
You can also ask a relative or friend for the funds. Be sure to put the agreement in writing and uphold your end of the bargain to avoid conflict later on down the line.
Apply for a Personal Loan
You could be eligible for a personal loan with a competitive interest rate and favorable terms if you have good or excellent credit. Even better, some lenders offer fast approvals and rapid funding times to get the money in your hand as soon as possible.
FAQs About Debit Card Cash Advance
You can reach out to your bank or use an ATM to borrow additional money. Many banks have overdraft protection features, and some of them let you overdraw your account up to a certain amount without incurring fees.
Debit card cash advances do not hurt your credit. Most credit card cash advances also won’t hurt your credit as long as you pay them back quickly. It’s possible to receive a cash advance even if you have bad credit.
