It’s four days to payday, your car breaks down, and you need $150 to get it fixed. The problem? You don’t have $150.
Do you start taking the bus, borrow a friend’s car, or ask family for money? If you’re like many people, none of these options sound like a practical or good idea.
Luckily, there’s one way to get the cash you need without inconveniencing yourself or your loved ones: a cash advance. Cash advances help relieve the emotional stress and financial pressure many working adults face during emergencies.
That said, not all cash advances are created equal, and some have higher fees and stricter terms than others. So let’s look at all your options to help you make the smartest choice for your financial situation.
A cash advance is a service that lets you access money before you actually have it — either by borrowing against your available credit limit (credit card cash advance) or by borrowing against your earned but unpaid wages through an app (paycheck cash advance).
While both come in handy for covering unexpected bills before payday, they’re inherently different.
A credit card cash advance is when you withdraw cash against your credit card’s available limit. The card issuer treats it like a loan, which often comes with:
This option can be convenient, but it’s usually the most expensive way to borrow quickly.
Paycheck cash advances (also called earned wage access, or EWA) let you borrow against wages you’ve already earned but haven’t been paid yet. These don't depend on your credit score: Providers set their own rules, limits, and fees.
Some EWA providers make you apply in person, while others are fully app-based, like Klover. The costs are often lower than a credit card cash advance, and in many cases, you can avoid interest entirely.
Usually, a credit card advance will show up on your credit card bill, while a paycheck advance will appear on your monthly bank statement. App-based advances can use an automatic payment deduction from your next paycheck, or you might have the option to repay manually in the app.
Whichever option you choose, it’s essential to pay off your advance on time. Otherwise, interest and fees can start accruing, and you’ll end up paying much more than the original amount.
For example, say you use your credit card to take out a $500 cash advance with a 5% fee upfront. That means you immediately owe $525.
But your credit card has a 29% interest rate on cash advances, and interest starts adding up right away (no grace period).
After just one month, your balance grows to about $537. If you only make the minimum payment — say $35 — most of that goes to interest, not your balance.
Keep rolling it over, and in just six months, you could owe over $600 on that original $500 loan. And the higher that credit card balance climbs, the harder it becomes to pay off.
How cash advances work differs based on your method of request. Here’s a quick breakdown:
While traditional cash advances may seem attractive because they’re familiar, they may come with some sneaky costs and risks that catch you off guard, like:
Between the instant advance fees and interest charges, it’s easy for debt to pile up quickly if you go the traditional route, especially if you’re only making the minimum monthly payment. Unfortunately, you may find yourself in a debt cycle that causes repeated financial strain.
No, taking out a cash advance won’t affect your credit score — at least, not directly.
But a credit card cash advance can affect your score indirectly if it pushes your card closer to its credit limit, as it increases your credit utilization ratio. A credit card cash advance can also affect your credit score if you miss a repayment.
On the other hand, paycheck cash advance apps like Klover typically don’t impact your credit score because you aren’t borrowing against your credit. You’re just accessing part of your paycheck a little early.
Between the credit limits, interest rates, and various fees, traditional cash advances can come with a lot of risk. The good news is that there are better and safer alternatives.
Some people turn to personal loans, which often have lower interest rates than credit card advances. But they also come with a lot more hoops to jump through for approval — credit score requirements, longer approval times, minimum borrowing amounts. So they’re a better option for large, planned purchases than short-term needs.
Fortunately, modern solutions like earned wage apps make it much easier and more affordable to get a cash advance right when you need it.
Earned wage apps are a low-cost, convenient alternative to credit card advances and personal loans. Options like Klover that are not loans offer no-interest cash advances, so you don’t have to worry about accruing interest costs. And they’re cheaper and more transparent with their fees than payday loan providers, which can have APRs anywhere from 300–500%.
It’s also easier to get a cash advance from apps like Klover than a personal loan from a bank, as the latter typically involves credit checks and long approval times.
If you need more money than an app offers, you can always get advances from multiple apps. This is still more cost-effective and flexible than credit card advances and personal loans.
Just remember to repay your advance from each app on time to maintain a good credit history with them.
Join Klover today to access your cash before your next paycheck.
Is taking a cash advance a good idea? It depends. Here are the pros and cons of advances to help you decide whether they’re the right option for you:
Pros
Cons
It’s worth noting, however, that these pros and cons largely depend on your chosen cash advance method. Traditional options expose you to more potential downsides than modern solutions like Klover.
Klover provides immediate access to cash without the financial risks of traditional advance methods. We also offer transparent terms and ensure zero hidden fees, making our app a cost-effective, safer, and more consumer-friendly solution.
Cash advances are a lifesaver when you’re short on funds. But how you use them will determine whether they stay valuable or add to your financial distress.
Here are some tips to help you keep things under control:
A cash advance can be a lifesaver when you’re in a tight spot and your paycheck is still days away. But it’s important to consider all your options and make the right choice for your situation. Credit card advances can come with incredibly high costs that make it hard to get ahead, so think of them as a last resort.
If you want quick access to cash without the financial drawbacks and risks of traditional options, consider an earned wage app like Klover.
With Klover, you can borrow money quickly without trapping yourself in a debt cycle. Our cash advances come with zero interest or late fees, minimizing your overall costs, and our transparent terms keep you informed and in control every step of the way.
Download the Klover app today for affordable, hassle-free cash advances.
