Can You Get a Cash Advance With No Bank Account?
Regular credit card cash advances do not require a bank account. Sort of. It’s complicated.
When you need quick cash to cover an emergency expense, there are a couple different routes you could go. You could visit the ATM and withdraw some funds, you could bring in a check and get it cashed, or you could even take out a payday loan—though that one is by far your worst option.
(Okay, no, selling your plasma to that guy Dmitri who hangs out behind the Panera Bread is your worst option. But a payday loan is a close second.)
Your options become a lot narrower, however, if you don’t have a bank account. You can’t write a check without one, nor can you visit an ATM. Plus, many payday lenders will still require that you have an account before they’ll lend to you.
A cash advance might be a good option, but can you get one without a bank account? The answer here is … maybe. For one thing, it depends on what you mean by “cash advance.”
What is a cash advance?
A cash advance is a type of credit card transaction. Instead of using your card to simply make a purchase, you can use a cash advance on your card to receive paper money. The amount that you withdraw is then added to your total balance, the same way that the cost of a normal transaction would be.
Besides the money that you receive, cash advances differ from normal credit card transactions in three important ways. First, most cards charge an additional fee for taking out a cash advance. Typically this fee is something like “$5 or 3 percent of the amount withdrawn, whichever is higher.” So right off the bat, you have to pay in order to get cash with a cash advance.
Second, cash advances do not come with an interest-free grace period. With traditional purchases, there is typically a 30-day window between when the purchase is made and when the purchase amount starts accruing interest. This means that if you can pay that balance off in full before the grace period ends, you can avoid paying any additional costs.
But with cash advances, that interest starts accruing immediately. Between that interest and the cash advance fee, there’s no way to avoid paying extra money. Plus, the interest rates for cash advances are much higher than the interest rates for regular transactions. If you want to take out a cash advance on your credit card, it is going to cost you.
(Tired of relying on cash advances for emergency expenses? Check out our blog post: Saving Strategies to Avoid a High-Interest Cash Advance Loan.)
Can you get a credit card without a bank account?
Why are we asking this question? Well, it’s because it gets to the heart of why answering this query is so tricky. See, while a credit card cash advance doesn’t require a bank account, you’re probably going to need a bank account in order to get that credit card in the first place. Theoretically, the answer is yes. But in reality? It’s a no.
If you are looking for a traditional unsecured credit card, but you don’t have a bank account, you’re going to be out of luck. Pretty much all credit cards are going to require that you have a bank account before they’ll approve you. Not having a bank account is a big red flag for them—it means you’re much more likely to not pay back what you borrow.
If you can’t take out a credit card without a bank account, that means you won’t be able to get a cash advance without one either.
You CAN get a cash advance with a secured credit card or prepaid debit card.
People who don’t have bank accounts can still apply for a secured credit card. With these cards, you make a cash deposit into an account that the card-issuer opens up for you. That cash amount then determines your credit limit. So a $500 deposit would mean a $500 limit. You could then use this secured credit card to take out a cash advance.
But this arrangement raises the question: Why would you use a secured credit card to take out a cash advance when you could just use the cash that you already deposited to open the card?
Well, the odds are good that if you’re in this situation, you probably have bad credit. Using a secured credit card and making your payments on-time is a great way to raise your credit score—so long as the card-issuer reports to the credit bureaus.
While secured credit cards often come with higher fees (not mention more fees) than traditional credit cards, using one of them is much preferable to doing everything in cash. Using one properly can improve your credit score over time, eventually leading you to a card with much better benefits and lower rates.
You could also take out a prepaid debit card to take out a cash advance. With these products, the funds are loaded directly onto your card; the money is yours to spend, with no interest accruing at all. You can use one of these cards at an ATM to take out cash—but it will probably come with even more fees than a standard cash advance would. Plus, unlike secured credit cards, a prepaid debit card won’t improve your credit.
(To read more about other alternatives to traditional banking, check out our blog post: How to Survive in a Banking Desert.)
Some “cash advance” loans don’t require a bank account.
Remember earlier in this post when we mentioned payday loans? Those are short-term, high-interest no credit check loans that are designed to quick and easy—but in exchange, they are much more expensive than a regular personal loan, and they’re aimed at folks who have poor credit scores. The typical term for a payday loan is something like two weeks, with an annual percentage rate (APR) of 350 percent.
Here’s the thing about payday loans: A number of them advertise themselves as “cash advance” loans. And while most payday loans do require you to have a bank account, there are some that don’t. Many bad credit loans will direct deposit your funds into your checking account, but cash advance loans that don’t require a bank account will either hand you cash or will put the money on a prepaid debit card.
These loans are probably the most dangerous kind of cash advance. For one, they are far more expensive than the kind of cash advance you’d take out on your credit card. For another, their short repayment terms make them exceedingly difficult to repay on time. And while that might seem like a mistake on the part of the lender, it might actually be a key part of their business plan.
See, with predatory no credit check loans, the lender stands to make more money if you can’t repay your loan on time. This allows them (where it’s legal) to roll the loan over, extending the due date in return for you paying off the interest on the original loan term. The lender then charges you additional interest on the extended term, essentially doubling the cost of your loan.
This rollover process—where people are constantly extending their loans while never paying anything beyond the interest owed—can easily transform into a dangerous cycle of debt. So while you might be able to get a “cash advance” loan without a bank account, we highly recommend you stay away from them.
To learn more about the dangers of predatory lending, check out these related posts and articles from OppLoans:
- A Field Guide to Spotting Predatory Lenders
- Tax Refund Anticipation Loans Are More Dangerous Than You Think
- 5 Alarming Payday Loan Statistics