If you have taken out a cash advance and are looking for a way to reduce the interest you are paying, you may wonder, “Can you balance transfer a cash advance?” The answer depends on what type of cash advance you have and the rules of the credit card or lender receiving the transfer.
A balance transfer is generally designed to move existing credit card debt from one credit card to another. A cash advance, on the other hand, is typically treated as a separate type of credit card transaction and may have its own interest rate, fees, and repayment terms. Because of these differences, a cash advance balance cannot always be transferred to another credit card.
If you are dealing with a cash advance, understanding how balance transfers work can help you determine whether this strategy makes sense for your situation.
Can You Do A Balance Transfer On A Cash Advance?
Sometimes, but not always. If you received a cash advance through a credit card, the amount you borrowed is generally added to your credit card balance. The card issuer may charge a cash advance fee and begin charging interest immediately. Typically, credit card cash advances can carry additional fees and have higher interest rates than ordinary purchases made with your credit card at a store or online.
A balance transfer works differently. It generally involves moving an existing debt from one credit card account to another, often to take advantage of a lower promotional APR.
Whether the cash advance portion of your credit card balance can be transferred depends on the terms of the new credit card and its issuer. Some balance transfer offers may allow you to transfer the entire eligible balance from another card, while others may have restrictions on which accounts or types of debt qualify.
Before applying, check the balance transfer terms carefully. Look for:
- Which types of balances are eligible
- Whether cash advance balances qualify
- The maximum amount you can transfer
- The balance transfer fee
- The promotional APR and how long it lasts
- The regular APR after the promotional period
- Whether transfers from the same issuer are prohibited
The CFPB notes that a credit card company can charge a balance transfer fee even when the transfer has a promotional 0% APR. This means that in order to initiate the balance transfer, the company or credit issuer that you decide to work with will charge an administrative fee to complete the process.
How Does a Balance Transfer Work?
A balance transfer moves eligible debt from one credit account to another.
For example, suppose you have a $2,000 balance on Credit Card A and receive an offer from Credit Card B for a promotional balance transfer APR. If Credit Card B approves a $2,000 transfer, the new issuer generally sends payment toward the old account. The debt then appears on Credit Card B instead.
You are not receiving $2,000 in cash. Instead, you are moving debt from one account to another.
A balance transfer may make sense when the new account has a substantially lower interest rate and you have a realistic plan for paying down the balance before the promotional period ends. Experian notes that balance transfers can be useful for consolidating high-interest debt, but consumers should consider the transfer fee, transfer limits, promotional period, and regular APR.
Example of a Balance Transfer
Imagine you have:
- $2,000 in eligible credit card debt
- A current APR of 25%
- A balance transfer offer with a 0% introductory APR
- A 3% balance transfer fee
A 3% fee on $2,000 would be $60, making the transferred balance approximately $2,060.
If the promotional rate lasts 12 months, paying approximately $172 per month would allow you to pay the $2,060 balance off during the promotional period, assuming no additional charges and that the terms of the card work as described.
The exact cost and savings depend on the card’s terms. A balance transfer is not automatically cheaper simply because the introductory APR is 0%.
Can You Transfer A Cash Advance Balance?
Let’s say that you took out a credit card cash advance to pay back a friend or pay for a large purchase upfront. If you open up a new credit card with a 0% introductory rate, you may be looking to transfer over the original balance of your existing card in order to pay it off without worrying about interest catching up to you. A credit card cash advance is part of your overall credit card balance, but it may be subject to different terms from your purchases. Cash advances commonly have separate APRs and fees, and interest generally begins accruing immediately rather than after a traditional purchase grace period.
That does not necessarily mean the cash advance is automatically eligible for a balance transfer.
For example, if your credit card has:
- $1,500 in purchases
- $500 in cash advances
- $2,000 total balance
A new balance transfer card might allow you to transfer some or all of the $2,000, or it might impose restrictions. The receiving issuer determines what qualifies under its balance transfer agreement.
The safest approach is to review the cardholder agreement and balance transfer offer or contact the issuer before assuming the cash advance can be transferred.
Can You Balance Transfer A Cash Advance On A Credit Card?
It may be possible, but you should not assume that every cash advance qualifies. Credit card companies distinguish between balance transfers, purchases, and cash advances. On an industry level, credit card definitions specifically identify a cash advance as a separate transaction that can include obtaining cash, making certain wire transfers, purchasing foreign currency, using access checks, and other transactions depending on the card agreement.
A balance transfer is generally the movement of an existing balance to another credit card. The receiving issuer’s terms determine whether the debt is eligible.
It is also important to understand that transferring a balance does not make the original debt disappear. The balance is paid or moved to another account, and you remain responsible for repaying the new balance.
What If The Cash Advance Is Still On The Same Credit Card?
If you took a cash advance using a credit card and it is still part of that card’s balance, you may be able to transfer the eligible balance to another card if the new issuer permits it.
However, you should check whether the balance transfer offer excludes:
- Cash advances
- Certain types of cash-equivalent transactions
- Balances from the same financial institution
- Accounts that are already delinquent
- Amounts exceeding the transfer limit
Your existing card should also be monitored until the transfer has officially been posted. Do not assume a transfer is complete simply because you requested it.
Can You Balance Transfer Amounts That Were A Cash Advance?
The answer is possibly, depending on the type of cash advance and the receiving credit card’s rules. There is an important distinction between a credit card cash advance and other products that may be described as cash advances. Take a closer look at the different types of cash advances:
Credit Card Cash Advance
A credit card cash advance is borrowing against your credit card’s available cash advance limit. It becomes part of your credit card balance.
Some balance transfer offers may allow this debt to be transferred, but eligibility is determined by the receiving issuer.
Payday Loan or Other Cash Advance
A payday loan, installment loan, personal loan, or other short-term cash advance is different from a credit card cash advance.
A traditional balance transfer generally moves debt between credit card accounts. It does not automatically convert a payday loan or other loan into credit card debt.
Some credit cards may provide balance transfer checks or other mechanisms that can potentially be used to pay another type of debt, but you should never assume that a particular loan qualifies. Read the terms of the offer and confirm with the issuer before proceeding.
Why Would Someone Want To Transfer A Cash Advance?
The biggest potential reason is to reduce the cost of carrying the debt. Credit card cash advances can be expensive because they may involve a transaction fee and a higher APR, while interest can begin accumulating immediately. A qualifying balance transfer could potentially provide a lower promotional APR for a limited period.
However, there are several factors to consider.
1. Balance Transfer Fees
A balance transfer may have a fee. For example, a 3% fee on a $3,000 transfer would add $90 to the balance.
The CFPB confirms that balance transfer fees can apply even to promotional 0% APR offers.
2. Promotional Rates Are Temporary
A 0% introductory APR generally lasts for a specific period.
Once the promotional period ends, the regular APR may apply to the remaining balance.
If you cannot pay off the transferred balance during the promotional period, calculate what the debt will cost at the regular rate before making the transfer.
3. You Need Enough Available Credit
You generally cannot transfer more than the receiving credit card allows. If you have $5,000 of debt but only receive a $3,000 balance transfer limit, you will still have $2,000 remaining on the original account. That won’t be able to transfer over with the other balance, so you need to have a game plan to pay it off simultaneously.
4. Applying For A New Card Can Affect Your Credit
Applying for a balance transfer card can result in a hard inquiry. Opening a new account can also affect the average age of your credit accounts.
On the other hand, successfully paying down debt and lowering overall credit utilization can potentially benefit your credit profile over time.
What If You Cannot Balance Transfer Your Cash Advance?
If your cash advance is not eligible for a balance transfer, you still have options to consider.
Start by reviewing your current account terms and determining exactly how much you owe, the applicable APR, fees, and minimum payment.
You can also explore other debt-management strategies, such as:
- Creating a realistic repayment budget
- Paying more than the minimum when possible
- Contacting the creditor to ask about available repayment options
- Comparing personal loan options
- Exploring credit counseling resources
- Looking for ways to reduce discretionary expenses
- Building an emergency savings fund to avoid repeated borrowing
Max CashⓇ also provides financial resources covering topics such as budgeting, credit, loans, and managing personal finances. Explore the Max Cash financial resources for additional information that may help you evaluate your options.
Max Cash Tips Before Taking Another Cash Advance
If you are considering another cash advance because you are struggling to cover an unexpected expense, take a moment to evaluate your overall budget.
Before borrowing, consider these questions:
How much do I actually need?
Borrowing more than necessary can increase your repayment costs.
What will the total cost be?
Look beyond the amount you receive. Consider fees, APR, and the total amount you will repay.
When can I realistically repay it?
A borrowing option may be easier to manage when you have a clear repayment plan.
Will another payment fit into my budget?
Look at your income and fixed expenses before taking on additional debt.
What alternatives are available?
Depending on your circumstances, you may have other options, including negotiating a bill, delaying a nonessential purchase, using available savings, or comparing other credit products.
Does A Balance Transfer Help Your Credit Score?
A balance transfer does not automatically increase your credit score. Opening a new credit card can initially have a negative effect because of the hard inquiry and the addition of a new account. However, if the transfer helps you reduce your balances and make consistent on-time payments, your credit profile could improve over time. Generally, lower credit utilization and consistent payments can potentially benefit your credit, while repeatedly opening accounts or accumulating additional debt can work against you.
The most important factor is what happens after the transfer – meaning that your actions will affect how much this transfer will impact your credit in the long run. If you transfer a balance to a 0% card but continue making new purchases and accumulating debt, you may end up in a worse financial position.
Balance Transfer vs. Cash Advance
| Feature | Balance Transfer | Cash Advance |
| Primary purpose | Move existing debt | Access cash from available credit |
| Typical use | Consolidating credit card debt | Covering an immediate cash need |
| Interest | May have a promotional APR | Often has a higher APR |
| Interest-free grace period | Depends on the offer | Generally no grace period |
| Fees | Balance transfer fee may apply | Cash advance fee may apply |
| Requires repayment | Yes | Yes |
| Can affect credit utilization | Yes | Yes |
| Eligibility | Determined by receiving issuer | Determined by card issuer |
The two transactions serve different purposes. Experian describes a balance transfer as moving one credit card balance to another, while a cash advance allows a cardholder to borrow cash against available credit.
How To Decide If A Balance Transfer Makes Sense
A balance transfer may be worth considering when you have qualifying high-interest debt, can qualify for a favorable offer, and have a realistic plan for paying down the balance.
Before moving forward, calculate:
Current debt + current interest and fees
versus
Transfer fee + promotional-period payments + potential interest after the promotional period
Also consider whether you can realistically pay off the balance before the promotional rate expires.
For example, if you transfer $4,000 and have a 3% transfer fee, your starting balance could be approximately $4,120. If the promotional period is 12 months, you would need to pay roughly $344 per month to eliminate that balance during the promotional period, assuming no additional charges.
The numbers will vary depending on the actual offer.
Frequently Asked Questions
Can you balance transfer a cash advance?
Sometimes. If the cash advance is part of a credit card balance, the receiving credit card issuer may allow the eligible balance to be transferred. However, some issuers restrict the types of debt that qualify, so check the terms before applying.
Can you do a balance transfer on a cash advance?
A credit card cash advance may be eligible for a balance transfer depending on the receiving card’s terms. A separate payday loan or other cash advance product generally is not automatically eligible for a traditional credit card balance transfer.
Can you transfer a cash advance balance to another credit card?
Potentially. The new card issuer determines whether the balance qualifies. You should also confirm the maximum transfer amount and applicable fees.
Can you balance transfer a cash advance on a credit card?
Possibly. A cash advance is included in your credit card balance, but that does not guarantee that another credit card will accept that portion of the balance for transfer.
Can you balance transfer amounts that were a cash advance?
It depends on the type of cash advance and the terms of the receiving account. Always verify eligibility directly with the card issuer before initiating the transfer.
Learn More About Cash Advances with Max Cash
Can you balance transfer a cash advance? Sometimes, but it depends on the type of cash advance and the rules of the credit card receiving the transfer.
A credit card balance transfer is primarily designed to move eligible debt from one credit account to another. While a credit card cash advance becomes part of your card balance, the receiving issuer may have restrictions on whether that balance can be transferred. Before making a decision, compare the balance transfer fee, promotional APR, regular APR, transfer limit, repayment period, and your ability to pay the balance down. A lower promotional rate can be helpful, but it does not eliminate the debt.
If you are considering borrowing money or trying to manage an existing balance, take time to review your budget and understand the total cost of the borrowing option. Max Cash can help you learn more about cash advance options today!2 5
