Can a Cash Advance be Done Over the Phone? A Comprehensive Guide

A cash advance allows you to borrow money against the limit on your credit card. It can provide quick access to cash in an emergency. But can a cash advance be done over the phone? Here is a comprehensive guide to everything you need to know about getting a cash advance over the phone.

What is a Cash Advance?

A cash advance is essentially a short-term loan that allows you to borrow money up to a certain percent of your available credit limit on your credit card, The money can be withdrawn as cash or transferred to your bank account

Cash advances charge a fee, usually 3-5% of the amount advanced, and have a higher interest rate compared to purchases or balance transfers on your card. There is no grace period on cash advances, so interest starts accruing immediately.

How Do You Get a Cash Advance?

There are several ways to access the cash from your credit card cash advance

• At an ATM: If your credit card has a PIN, you can use it to withdraw cash from an ATM, up to your cash advance limit.

• At a bank: You can get a cash advance in person at a bank branch, by providing your card and ID.

• Online transfer Some card issuers may allow you to transfer funds from your credit card to a linked checking or savings account,

• Convenience checks: Issuers sometimes provide convenience checks that can be used to access your credit line.

• Over the phone: In some cases, card issuers may permit cash advances by phone.

Can a Cash Advance be Done Over the Phone?

While it is possible to do a cash advance over the phone in some cases, most issuers no longer allow it due to the risks involved. Cash advances over the phone are considered high-risk for a few key reasons:

• Fraud risk: It’s easier for fraudsters to impersonate cardholders and get cash advances by phone.

• Chargeback risk: Cardholders can dispute phone cash advances they didn’t authorize, leaving the issuer liable.

• Identity theft: Phone cash advances make it easier for thieves to access funds if they steal card information.

For these reasons, most major credit card companies no longer offer the option to process cash advances over the phone. However, there are some smaller issuers that still permit it under certain circumstances.

How to Get a Cash Advance by Phone

If your card issuer does approve cash advances by phone, here is what you can expect:

• You will need to provide personal information to verify identity, including SSN, date of birth, address etc.

• The issuer will likely ask for additional authentication, such as security questions or one-time passcodes.

• The funds may be transferred to a linked checking account, or made available for in-person pickup.

• Limits on maximum amounts per day/month often apply, usually a few hundred dollars.

• Interest starts accruing immediately, and fees apply.

Overall, getting a cash advance by phone is not very common anymore. Most major issuers like Visa, Mastercard, Amex and Discover no longer offer it due to the risks and liability involved. But it can still be an option with some smaller credit card companies.

Pros and Cons of Cash Advances by Phone

Pros

• Quick and convenient access to emergency cash.

• Don’t need to visit an ATM or bank branch.

Cons

• Very high interest rates and fees.

• No grace period, interest starts immediately.

• Counts toward credit utilization, can impact credit score.

• Some fraud/identity theft risks.

• Most major issuers no longer allow it.

Alternatives to Cash Advances

Because of the downsides to credit card cash advances, you may want to consider some alternatives when you need emergency cash:

• Personal loans – Unsecured loans from banks, credit unions or online lenders. May have lower rates than cash advances.

• Credit line – revolving credit from your bank at lower interest rate.

• 401(k) loan – Can borrow against your retirement plan.

• Paycheck advance – Some employers provide advance on your paycheck.

• Borrow from family/friends – If possible, borrow from people you know.

• Credit card purchases – Use your card to pay directly for expenses if possible.

• High-yield savings – Keep an emergency fund in savings account.

The Bottom Line

While it is possible to get a cash advance over the phone in limited cases, it is an extremely high-cost way to borrow and now very uncommon due to fraud/theft risks. Before considering a phone cash advance, always explore other lower-cost borrowing options first, and use cash advances only as an absolute last resort in an emergency. Proceed with caution, because the fees and interest charges add up quickly.