
What Is a Cash Advance and How Does It Work?
An explanation of what cash advances are and how they function 💸
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How to calculate how much you’ll actually be paying back when you take out a cash advance
You know the feeling. You’re all set to make it to payday. And then your car starts crying out for gas. Or some other fun, unexpected expense 🤪
If you're in need of quick cash to cover an unexpected expense, a cash advance can be a solid alternative to overdraft fees or a shady payday loan. This is because, generally, payday loans can charge much higher interest than cash advances.
Some states (hey, Texas) allow payday loan companies to charge more than 600% in interest. In contrast, you can find cash advances that come with 0% interest (hey, Cleo).
However, not all cash advances have 0% interest. And some charge other fees, like late fees or membership fees, in order to access the advance. Before you apply for a cash advance, it's important to understand the true cost.
A cash advance is a way of getting quick cash that’s calculated against your income or credit limit, depending on where you get it from.
You can get a cash advance at an ATM, through a convenience check, or through online services like cash advance apps.
To calculate the true cost of a cash advance, you'll want to consider the following things:
Add up all of the fees, interest charges, and late fees - that’s the total cost.
Now you know where cash advance fees come in, you can use that knowledge to avoid paying the most.
A Cleo cash advance comes with 0% interest.
To access Cleo’s cash advance feature, you’ll need to decide if Cleo Plus* is right for you. On top of a ton of free budgeting features, Cleo Plus* gives you access to the cash advance service, credit score coaching, and cashback from selected stores.
If you’re someone who overdrafts regularly, you might actually save money with a Cleo Plus* membership.
Here’s the math: statistically speaking, if you overdraft once in a month you’ll overdraft two more times. With overdraft fees of up to $35, this can add up to $100 dollars a month. That’s $1,200 in overdraft fees over a whole year.
Cleo Plus* is $71.88 for a year. If the Cleo cash advance helps you avoid overdrafting twice, you’ve already made your money back.
If you’re eligible, and you want your money sooner, you can pay to access your advance on the same day for an express fee.
That’s it.
There’s only one thing left to do…
Enjoy this post? Give it a share or send it along to a friend. You never know, it could make a big difference. Big love. Cleo 💙
*Cleo Plus is our subscription service, which offers eligible users cashback on your money, information on your credit score, and access to cash advances (“Cash Advance”). Advance amounts will vary based on eligibility. If you don’t want to subscribe, you can also apply for cash advance by contacting our customer service at team@meetcleo.com. To learn more about eligibility, repayment, and overall terms, please visit: meetcleo.com/terms.
**Eligibility requirements apply. Not all users will qualify. Advance amounts range from $20 to $250. Same day transfers subject to express fees. Visit meetcleo.com/terms for more information.
An explanation of what cash advances are and how they function 💸
Cleo's resident financial advisor, Anna Yen, answers all your FAQs about accessing quick cash.
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