What is a cash advance?
“Fast Cash” “No Credit Checks” “Payday Loans”
What does Cash Advance mean?
The words “cash advance” appear in a lot of different places. You might see them painted on the window of a store that advertises “Fast Cash,” “No Credit Checks,” or “Payday Loans.” You might see them buried in your credit card statement. You might even see them in your H.R. manual at work.
“Cash advance” can refer to a number of different things, and as the name suggests, they’re all ways of getting a quick influx of cash. But how you get that money—and the rates you’ll pay to get it—aren’t the same.
In fact, “cash advance” can refer to three totally different things. They have the same name, but that’s where the similarities end.vSome “cash advances” are better than others, and not all are safe. Here are the three kinds of “cash advance” you might encounter, and what you need to know about them so you can make the right decision when you borrow.
“Cash Advance” Loans
This type of “cash advance” is offered by online and storefront lenders. The word “loan” may or may not appear in the title, but that’s exactly what it is. And it’s not just any type of loan. A “cash advance” loan is simply a payday loan in disguise.
Credit Card Cash AdvancevA credit card cash advance is a type of loan offered by credit card companies. You use your credit card to borrow money, which you’re then responsible for paying back along with interest and fees.
Employer Cash Advance
Unlike cash advance loans and credit card cash advances, an employer cash advance is not a loan. The money you receive is yours—it comes straight out of your next paycheck. Not all employers offer cash advances, and those that do may have strict policies that limit the number of times you can request an advance and reserve approval for true emergencies.
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