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Can You Get a Cash Advance with a Debit Card?
Paying with cash is like using the bathroom. When you gotta do it, you gotta do it. And while cash-only transactions might not be as common now in the age of your Venmos and your Paypals, it’s still something you’re going to encounter every so often.
Even if you don’t carry cash around on the regular, any small cash transaction can be handled pretty easily. You can just go to your local ATM and make a withdrawal, or you can pop into the store and get cash back.
But if you need to make a larger cash transaction—like paying for a used car—then you’re going to have to turn elsewhere. You’ll probably have to take out a cash advance on your debit card. Not familiar with how that works? No worries. That’s what we’re here for.
Yes, you can use your debit card to get a cash advance.
When you think “cash advance”, you’re probably thinking about a credit card cash advance. That’s where you take out money using your credit card, and the amount you withdraw is added to your total balance. (You can read our complete guide to cash advances in the OppU article What is a Cash Advance?)
A debit card cash advance is different. Instead of adding funds to a revolving balance, a debit card cash advance withdraws that money directly from your checking account. In terms of where the money comes from, a debit card cash advance is exactly the same as taking out money from the ATM.
To take out a debit card cash advance, all you need to do is go to a local bank or credit union branch and talk to a teller. There will be a fee for requesting the advance, usually some small percentage of the total amount withdrawn.
What’s the point of a debit card cash advance?
If taking out a debit card cash advance is basically the same thing as taking out money from the ATM, then what’s the point? Well, there are a few different reasons why taking out a cash advance on a debit card is useful:
1. They come with higher limits: If you’ve ever tried to take out a lot of money from your ATM, you’ve probably run into a problem: There’s a daily limit on how much you can withdraw. For regular ol’ checking accounts, it’s usually somewhere between $300 to $500. But with a cash advance, the limit will be much higher—in the thousands of dollars, not the hundreds.
2. You can use other banks: For the most part, you can go to any local bank branch and get a debit card cash advance, even if it’s not affiliated with your bank. If you bank through a credit union, this will mostly be the with other credit unions too. Not being limited to your bank is a huge advantage. Though it should be noted that not all banks will accept your request for a cash advance. Check with your bank for details.
3. They don't carry interest: When you take out a cash advance on your credit card, you’re getting charged more than just a fee; you’re getting charged interest, too. And that interest rate will not only be higher than the rate for your standard transactions, it will also skip the one-month grace period. That interest will start accruing immediately. On the other hand, debit card cash advances don’t come with any interest, just the initial fee. That makes them a much cheaper option for fast cash!
What are the downsides to a debit card cash advance?
The biggest downside is this: you cannot take out a cash advance on a debit card for more than you have in your checking account. Many times, when people need emergency cash, it’s because they don’t have the money period to cover an unforeseen bill. In cases like this, a debit card cash advance isn't going to do them much good.
Now, you may be able to swing a cash advance that’s larger than your checking account balance, but doing so means overdrafting, and overdrafting means dealing with some pretty sizeable fees. According to a report from the Consumer Financial Protection Bureau (CFPB), the average overdraft fee works out to an annual percentage rate (APR) of over 17,000%.
In the end, the best way to handle unforeseen expenses is to have an emergency fund—cash that’s available for you to use anytime.