Cash Advance, Credit or Loan: Weighing Quick Cash Options

When you need cash fast, what’s the best way to borrow it? It can be convenient to get a cash advance or put a hefty charge on a credit card, but it’s crucial to weigh your options first because those decisions can result in high fees and interest and can lower your credit score, too.

When you need cash fast, what comes to mind? It could be a payday loan provider. The shops—set up in nearly every strip mall—advertise quick-and-easy cash solutions. But at what cost? Their interest rates, commonly disguised as fees, range from a 300 to 500% annual percentage rate (APR). That means you may have to hand over up to $2,500 to pay off a $500 payday loan. That ballooning amount is often due within three to four weeks (when your next paycheck arrives). As a CPS IBEW Federal Credit Union member, you have much better options at your fingertips.

A credit card can be a helpful way to pay for an expense before you have the cash on hand, but it is essential to understand the pros and cons of how you use it. Many credit cards come with a cash advance option, for instance. It can be tempting to choose the cash advance, but they can come with a higher APR (25.99% versus 17.99% for purchases, for instance) and can even be subject to an additional fee (3% is common).

Alternatively, you could charge your credit card but, again, pay close attention to the terms and conditions if you’re not able to pay off the charge within the allotted statement cycle. Credit unions are often the best places to get great credit card rates offers. Take a look at the current offer here.

“It’s one of those exclusive perks that, honestly, we wish more members would take advantage of,” says Edna Narum, CPS IBEW FCU Chief Financial Officer. “In many cases, the low rates from credit unions can't be beaten. Depending on the offer, transferring your balance from a high-interest credit card can save you thousands.

”Member loans and offers can also provide quick cash access. CPS IBEW FCU members have several loan options and offer that can make cash accessible without using up currently available credit (which can quickly lower your credit score). Fast cash loans are available year-round for up to $750 over a 6-month-term and holiday loans are available for a limited time with a 12-month term. For more significant cash needs, personal loans may be the best option. Fixed payment terms at highly competitive rates can be used for auto repairs, home furnishings, travel, and more.

“And for members who already have loans with us, don’t forget that there’s a Skip-a-Pay option,” Narum adds. “Deferring up to two loan payments throughout the year will extend the length and terms of your loan but also allow you to keep a little extra cash in your pocket when you need it most, which makes it a popular option around the holidays.”So when it comes to accessing fast cash, you have options. But don’t grab the first one that comes to mind. Consider the terms and conditions—and always consider the exclusive perks of your CPS IBEWFCU membership first—so that quick cash doesn’t become a lasting regret.