If you have a Discover credit card, the issuer makes the process of getting a cash advance simple – but it’s still very costly.
When a financial emergency happens, and you need cash urgently, you may wonder if you can get it from your credit card. Indeed, there’s a way to receive cash from your credit line with a cash advance. It’s a costly option, but when your emergency fund is dried up, and you have no alternatives, it can be a quick solution.
If you have a Discover credit card, you’re in luck. The issuer makes it rather easy for cardholders to borrow cash against their credit line. Read on to learn how to get a cash advance with Discover and what to keep in mind before you use this option.
Getting a cash advance with Discover
What is a cash advance?
A cash advance offers a way to use your credit card to get cash, whether from an ATM or bank branch, by transferring the money to your checking account or cashing a convenience check.
With a convenience check, you can use credit card funds in situations where you can’t charge your credit card – for instance, for paying your mortgage. However, this is generally not recommended, especially if you need funds for a large transaction.
A cash advance can be extremely expensive and turn into a dangerous kind of debt. It comes with its own terms, fees and APR that aren’t at all budget-friendly – to say the least. For that reason, it’s best to explore all other possible options first, such as personal loans or borrowing from family or friends.
How to get a cash advance with Discover
If you’ve exhausted other options and do need to get cash from your credit card, Discover makes it a simple process.
There are three ways you can get a cash advance with Discover.
Stop by a bank branch or ATM
First, you can find a participating ATM or bank. To get cash from an ATM, make sure to create a PIN by logging into your Discover account. If you choose to go to a bank, check if the location provides over-the-counter cash access – Discover recommends you call in before making the trip. At the bank, you’ll need to show your ID and Discover credit card to receive a cash advance.
Get an online direct deposit
If you can wait for a few days, you can transfer cash straight to your checking account. Go to Discover’s website and log in to your account. There, go to “Manage” on your dashboard and click “Cash Access” and then “Deposit cash into your checking account.” You’ll be able to transfer cash advance funds to the bank account you’ve already used to make credit card payments.
Keep in mind that while this option is rather convenient, it can take between one and three days for cash to deposit into your checking account.
Request convenience checks
If you’re eligible, you can also request cash access checks. A convenience check is linked to your credit line and works similarly to a regular personal check. You can make this check in any amount up to your credit limit and pay it off on the terms your credit card issuer offers for cash advances.
What to consider before getting a cash advance
As we mentioned, cash advances can be extremely expensive. Let’s take a look at how the costs add up.
Cash advance fee
Discover credit cards charge a cash advance fee of either $10 or 5%, whichever is greater. Add it to other possible fees, such as an ATM fee, and the cost of your cash advance goes up rather quickly.
Higher interest rate
The main reason cash advances get so expensive is the higher interest rate. At the moment, Discover charges a 24.99% APR on cash advances. Unlike interest charged on purchases, cash advance interest is charged right away. If you don’t repay the balance immediately, these charges will start to add up, quickly putting you in accumulating debt.
As you can see, cash advances can become detrimental to your financial health. If you don’t have an emergency fund set up yet, it’s best to look into other options before borrowing cash against your credit line. Or, if a cash advance seems to be the only option, look into the credit cards with lower cash advance APRs.
For example, the PenFed Platinum Rewards Visa Signature® Card has a cash advance APR of 17.99%, which is still expensive, but lower than that of the majority of other cards. Additionally, the card charges no cash advance fee, as well as no annual fee, and earns 5 points on gas purchases, 3 points on grocery purchases and 1 point on everything else.
A cash advance should be the last resort option, but if you do need to borrow cash against your Discover credit line, the issuer makes the process easy. Make sure to keep in mind fees and interest to make room for them in your budget.