What is a cash advance?

A cash advance gives you the ability to access more money than is currently available in your account, by borrowing against future income or credit. This can be helpful when you find yourself short on cash. 

For credit card accounts, a cash advance typically comes with fees and a higher interest rate than normal purchases for the amount advanced.

Non-credit-card-based cash advance options are closer to short-term loans. These may come with flat  fees and no interest rates to calculate. Since the costs associated with these cash advance types are generally static and transparent, it is considerably easier to distinguish between their pros and cons.

Stretch your paycheck with a cash advance

Using a cash advance is always a voluntary choice, and in the right circumstances, it can act as a much-needed safety net that provides peace of mind in tough situations. Because a cash advance is usually available immediately, it offers valuable financial flexibility for those on non-traditional pay schedules. If you’re paid biweekly, monthly, or even several months apart, cash advances can help fill the small gaps.

How to know if a cash advance is right for you

Determining whether a cash advance is the right fit for your financial needs depends on several factors. If you need cash fast, consider these three questions before deciding to move forward with your cash advance.

Is my financial need immediate, or can it wait?

For time-based needs like groceries, gas for your vehicle, an important bill, or a date-sensitive expense, a cash advance may be appropriate. Make your decision by comparing costs and benefits. What are the costs of waiting for income versus the fees associated with your borrowed advance? If late fees and/or an overdraft charge would be more than the cost of the advance, then the choice is straightforward.

Can I repay the costs and/or fees?

A paycheck advance comes in handy, but it shouldn’t make your future payday look bleak in the process. When planning out your finances after a cash advance, think beyond the financial challenge at hand. Don’t forget to account for both immediate costs (upfront fees) and future costs (which may include higher credit card interest, automatic repayments, and more).

Can I use this money the way I need to?

If the funds don’t hit your account when you need them, or you can only spend the cash in a specific way, then it defeats the purpose of a cash advance. Using a trusted, tech-savvy lender like Varo ensures you not only have the financial flexibility of a cash advance, but once qualified, you’ll also have immediate access to your money. Other cash advance providers may have built-in waiting periods that can be a day or longer. 

How does it work?

Start the process by reviewing the terms and conditions provided by your lender. You should understand exactly which fees to expect before committing to a cash advance. The amount of repayment you’ll owe, as well as a due date, should also be clearly displayed.

Your lender will review your request, whether it is a credit card issuer, a bank, or another financial institution. They will consider your deposit history, credit history, payment history, or other factors, before potentially approving your advance.

While typically fast, initial cash advance approval timelines can vary widely from lender to lender. This means that it’s generally a good idea to start this approval process before the cash is needed, not mid-crisis. 

Fees associated with a cash advance

The fees and/or interest you’ll pay on your cash advance depends on the issuing lender. For a credit card cash advance, the fee structure may be expressed as something similar to, “$X or X% of the cash advance amount, whichever is greater”. In addition, many credit cards will charge you a higher interest rate on the cash advance than they would charge for normal credit card purchases.

If you pay off the credit card advance in full before the next payment cycle, you can typically avoid paying interest. Cash advances from other lenders don’t typically offer the same payment grace period and can start accumulating interest for purchases immediately. Because of this, fees can begin to add up quickly, even on a small advance amount.

On the flip side, Varo Advance1 has no interest charges—just a single transparent, flat fee on each cash advance received. Qualified customers can get approved for an advance between $20 and $250, potentially working their way up to $500 advances over time.

How quickly can I get a cash advance?

When you need a cash advance, you usually need it quickly. That's why most lenders try to make this process fast. If your application is approved, you can typically expect to see the funds in your account within a day or two.

Varo makes it simple for qualified bank customers. If you've already qualified, getting an advance is as easy as a few taps in the app—no long waits. That's a lifesaver when you're facing urgent bills or unexpected expenses like car repairs. We recommend qualifying now so that you're prepared when those time-sensitive situations arise.

If you’re looking for a cash advance from a credit card issuer, double-check its maximum wait times for approval and cash disbursement first. While some cards simply require you to visit an ATM to withdraw money, others may have a longer review period. Your potential waiting time should be carefully considered before putting in your request. Varo Advances are deposited directly into your account for immediate spending.

Alternatives to a cash advance

If you need funds in a hurry, a cash advance is an excellent option, but it’s not the only one available to you. If you’re still not sure a cash advance is right for your situation, consider these other short-term financial solutions:

• Ask your employer or human resource department for a direct paycheck advance. Many larger companies are willing to work with established employees in times of need or hardship.

• Apply for niche credit such as Care Credit for medical costs or a store-branded credit account for appliance purchases.

• Seek out a personal loan from friends or family, complete with a written agreement and due date to avoid any miscommunication.

• Try out on-demand gig work, such as food delivery, for extra income when an unexpected bill comes due.

Be prepared

Ready to experience the flexibility and peace of mind that a cash advance can offer? Get the funds you need quickly and easily, right in the Varo app. Don't wait until you're in a pinch—qualify today and be prepared for life's unexpected moments. 

With Varo Advance, qualified customers can access between $20 and $250 instantly, and could build their cash advance limit up to $500 over time. Get 0.00% APR and only pay a single transparent, flat fee per advance with the ability to choose your own repayment date between 15 and 30 days from the day your money is received.

Get started today or click to learn more about Varo Advance!

1 Varo Advance(VA) is a small dollar line of credit. Initial limits range from $20-$250, work your way up to $500 over time. Fees range from $1.60 - $40 based on loan amount. Current limit can be viewed in the Varo App. Only one outstanding advance at a time, must be repaid in full prior to requesting a new advance. Varo Bank Account, with minimum Qualifying Direct Deposit (QDD) of $800 in current or previous calendar month required. Limits and eligibility evaluated daily and may change at any time. Add'l qualifications apply.

Qualifying direct deposits are electronic deposits of your paycheck, pension or government benefits (such as Social Security or unemployment) from your employer or government agency to the extent that can be identified. Tax refunds and government stimulus payments, Person-to-Person payments (such as Venmo or Varo to Anyone), and funds deposited using a Varo routing number are not considered a direct deposit.