Utilizing a Cash Advance: When Not To

There is an increase in the popularity of cash advances, recently. These advances often have a higher interest rate yet, are easily obtained and remarkably fast to process. Cash advances rarely require a credit score check and can be applied for online.

Times You Wouldn’t Use a Cash Advance

Despite the growing demand for cash advances and payday loans, sometimes these loans are not the ideal choice. In fact, sometimes a cash advance can be the wrong choice. It’s important to be able to identify these situations so as to get the right kind of loan or line of credit.


That’s not to say there aren’t times when a cash advance can be the right move. Indeed, we’ll take a look at those instances in a subsequent article to this one. For now, let’s look at when not to use a payday loan or cash advance.


Purchasing a Car

An automobile is a large investment and often it will take a longer period of time to pay off than most other purchases. Cash advances are fine for the short-term but are not geared toward extended borrowing. Many financial institutions offer loans tailored specifically for auto loans already. These loans are usually the optimal choice when it comes to car-buying.


New Furniture & Remodeling Projects

When it comes to buying furniture or remodeling parts of your home, it doesn’t make sense to acquire a cash advance. Usually, folks do not make snap decisions in purchasing furniture. It takes time to decide and shop around for something that fits one’s design tastes. The very same can be said about smaller remodeling projects.

A payday loan or cash advance by its very nature is a loan to cover expenses until the next or next few, paychecks. With that in mind, and the fact that buying new furniture or contracting a small remodeling project are seldom emergencies or done on a whim, it would be better to simply wait until payday.


New furniture and remodeling projects can get pricey. It’s good practice to save for a planned purchase or contracting job. If a loan would be needed, it may be better to get a longer personal loan from a credit union or a bank.


Shopping For Personal Items

Going shopping can be done when necessary, for fun, for therapeutic purposes, or any combination of these, depending who you are. There may be occasions when funds are tight and shopping isn’t as practical. A cash advance could be just the thing if you need, for example, an outfit for a new job except many merchants offer store credit cards. These cards usually win out as they frequently offer points and other bonuses toward in-store purchases.


A cash advance could still work well here. However, this occurs mostly in the situations where a store card is not available. Credit rating is another factor that might validate going with the cash advance. Unless the aforementioned conditions are present, given a choice between the cash advance and a card, the store-issued card will usually be the popular choice.


So When Do I Use A Cash Advance or Payday Loan?


These are all situations where you normally wouldn’t use a cash advance. Usually, time is the deciding factor, be it due to the length of time involved in a loan or a lack of urgency. There are times where a cash advance can be extremely helpful. Make sure to read the next article in this two-part series as we address the situations where you would want to obtain a cash advance.

About Kelly Stone

Kelly is a graduate of Northwestern University's Kellogg School of Management with a Master's Degree in Finance. Kelly has 20+ years experience in the short-term lending industry since 1996, having owned 50 storefronts offering payday loans. As President of Snappy Payday Loans, Kelly has built a large network of lenders and is dedicated to ensuring consumers nationwide can find the loan they are seeking. View More