If you’ve ever found yourself short on cash and wondering if a credit card cash advance is a smart solution, you're not alone. While it may seem like a quick fix, cash advances come with major drawbacks that can damage your financial future. Instead, more sustainable solutions— like the credit-building tools offered by Liftoff—can help you rebuild credit and improve your long-term financial stability.
What Is a Cash Advance?
A cash advance is essentially a short-term loan taken against your credit card limit. You can withdraw money from an ATM, bank, or by using those “convenience checks” credit card issuers mail out. But unlike regular credit card purchases, cash advances come with high fees, sky-high interest rates, and zero grace periods.
The True Cost of a Cash Advance
Here’s why cash advances should be your last resort:
1. High Fees: - Expect to pay 5% of the transaction or $10 minimum, whichever is higher. Add ATM fees, and your quick cash starts to cost more than it’s worth.
2. Skyrocketing Interest Rates: - Cash advances often carry APRs of 24% or higher, regardless of your normal credit card interest rate.
3. No Grace Period: - Unlike regular purchases, interest on a cash advance starts accruing immediately, so the longer you take to repay, the more you’ll owe.
Example: Borrowing $800 with a 24.9% APR and paying just $50/month can cost you over $1,000 in total—and that doesn’t include the fees.
Better Alternatives to Cash Advances
✅ Liftoff: The Smarter Way to Rebuild Credit
Instead of turning to high-interest debt, use Liftoff to get back on track. Whether you’re new to credit or recovering from past financial missteps, Liftoff offers practical, low-risk tools to boost your credit score the right way.
🔹 Rent Reporting
With Liftoff’s Rent Reporting, you're on-time rent payments can be reported to major credit bureaus—giving you credit for what you’re already paying.
🔹 Credit Builder Account
Open a Credit Builder Account, which sets aside small monthly payments in a locked savings account. These payments get reported to the credit bureaus, helping you build a positive payment history.
🔹 Mastercard Linked Line
Access Liftoff’s secured Mastercard®, which helps you establish credit responsibly with manageable spending limits and regular bureau reporting.
🔹 Subscription Manager & Credit Monitoring
Stay in control with Liftoff’s subscription management tools and credit monitoring, so you avoid unnecessary overdrafts or late payments that can hurt your credit.
Other Alternatives to Consider
If Liftoff’s tools aren’t immediately accessible, there are still safer options than a cash advance:
· Emergency Savings – Even $500 set aside can help you avoid predatory debt.
· Loan from Friends/Family – Just be sure to treat it like a formal loan with a repayment plan.
· Employer Payroll Advance – Some workplaces offer early access to earned wages.
· Personal Loans – Especially from credit unions, these often have lower APRs than credit cards.
What to Avoid at All Costs
Even worse than a cash advance? These predatory loans:
🚫 Payday Loans with APRs near 340%, payday loans trap borrowers in cycles of debt.
🚫 Auto Title Loans Risk losing your car over a short-term loan with outrageous fees.
🚫 Retirement Account Loans Tapping into your 401(k) or IRA stunts your long-term financial growth.
Final Thoughts: Build, Don’t Borrow
While a cash advance may seem convenient, the financial cost is rarely worth it. Instead of diving deeper into debt, start building a stronger credit foundation today with Liftoff’s full suite of credit-building tools. From rent reporting to secured credit accounts, Liftoff helps you take control of your financial future—without the high costs and high risks of fast cash loans.
Get started with Liftoff today and start building the credit you deserve—one smart step at a time.