If you need cash urgently, there is a way to get it through a line of credit with the Discover advance. This is an expensive option, but if you don’t have an emergency fund or any other alternatives, this might be the solution you’re looking for.
If you have a Discover credit card, the issuer makes it fairly easy for cardholders to borrow cash against their line of credit. Before you take out cash against a line of credit, you should know what the terms are. This includes a high APR that applies immediately, a high cash advance fee, and any applicable ATM fees. All of these fees add up quickly. If you take cash often, you will be buried in fees and interest. Be sure to keep this in mind before taking a cash advance.
What is a cash advance?
Withdrawing cash with a Discover card offers a way to use your credit card to receive cash, whether at an ATM or bank branch, by transferring money to your checking account, or by cashing a convenience check.
With a convenient check, you can use credit card funds in situations where you cannot withdraw funds from a credit card, such as paying a mortgage. However, this is generally not recommended as the fees are incredibly high. For example, a $1,500 mortgage will have a cash advance fee of $75 (5% of the cash advance amount) and an annual interest rate of about $375 (at 24.99% per annum).
A cash advance can easily turn into a dangerous form of debt. It comes with its own terms, fees, and annual interest rate, which, to put it mildly, are anything but budget-friendly. For this reason, it is best to explore all other options first, such as personal loans or loans from family or friends.
What to look for before getting a cash advance
As we mentioned, cash advances can be very expensive. Let’s see how the costs add up.
Cash withdrawal fee
Discover credit cards charge a 10% or 5% cash advance fee, whichever is higher. Add it to other possible fees, such as ATM fees, and the cost of withdrawing cash goes up pretty quickly.
For example, if you need money while attending an event, it accumulates quickly. If you withdraw $100 from an ATM using a Discover credit card, you will be charged a $10 cash withdrawal fee and $3 to $5 ATM fee. You will also receive 25% interest on $110 immediately.
Higher interest rate
High interest rates make cash advances quite expensive. At the moment, advance payments on the Discover card have 24.99% per annum. Unlike interest charged on purchases, cash interest accrues immediately. If you don’t pay off the balance immediately, these costs will start to pile up, adding to your debt quickly.
In our previous example with a $100 withdrawal, 24.99% per annum would have turned into a $24.99 fee over the course of the year. Do this ten times and you will be charged $250 to withdraw $1,000. This is a lot of money that you pay to a bank that does nothing for you.
Cash advances can wreak havoc on your financial health. If you don’t have an emergency fund yet, it’s best to explore other options before borrowing cash against a line of credit. Or, if cash out seems like the only option, consider credit cards with lower APRs.
How to get a cash advance with Discover
If you’ve exhausted your other options and need to know how to make a cash advance with Discover, you have three options.
Stop at a bank branch or ATM
First, you can find a participating ATM or bank. To withdraw cash from an ATM, be sure to create a PIN by logging into your Discover account. If you decide to go to the bank, check if the place provides access to cash without a prescription – Discover recommends that you call before you travel. At the bank, you will need to show ID and a Discover credit card to receive a cash advance.
Get Direct Online Deposit
If you can wait a few days, you can transfer cash directly to your checking account. Go to the Discover site and sign in to your account. Once there, go to “Manage” in the toolbar and click on “Access Cash”. Then click “Deposit cash into your checking account”. You will be able to transfer cash advance funds to a bank account that you have already used for credit card payments.
Keep in mind that while this option is quite convenient, it can take one to three days for the cash to appear in your checking account.
Request a convenience check
If you are eligible, you can also request cash access checks. A convenience check is linked to your line of credit and works similarly to a regular personal check. You can make this check for any amount up to your credit limit and pay it under the terms and conditions offered by your credit card issuer for cash disbursement.
To check if you qualify for Discover convenience checks, sign in to your online account. Please note that these checks will be mailed to you in a few days.
bottom line
Cash advance should be a “last resort” option, but if you need to borrow cash against the Discover Line of Credit, the issuer makes it easy. Be sure to keep in mind that fees and interest are quite high and must be paid quickly to avoid debt spiraling out of control.
Editorial disclaimer
The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.