Credit Card Cash Advance Saved the Day

I took a cash advance from a credit card last week. I had never done that before. I’m very happy I was able to do it. I’m also very happy with the cost and the efficiency of how it was done, even though I borrowed at 39,608% APR.

I had been in the process of doing a mortgage refinance. At 9:30 in the morning that day, I got an e-mail from my loan advisor with my final HUD-1 closing statement. Documents signing was scheduled at 11:00. I had been waiting for this for quite a while. I had money ready in my Fidelity mySmart Cash account. Not a problem, except they required a certified check.

In my previous refinances, I’ve always been able to submit a personal check. So I erroneously assumed that it would also be the case this time, without asking the loan advisor ahead of time. My bad. I needed about $4,000 for a certified check. I had to have it in about one hour.

I also have a checking account with Wells Fargo, although I only used it for depositing paper checks. I went into a Wells Fargo branch and asked them if they would allow me to deposit a personal check (from Fidelity mySmart Cash) and make it immediately available for the certified check. Despite my having a “top of the line” relationship checking account with Wells Fargo, they said no, which I could understand. I was basically asking them to advance money to me before they collect on the check.

I called Fidelity. They said in any single day I can withdraw maximum $500 from an ATM and do a cash advance against the Visa debit card in a bank branch for up to $2,499. Theoretically I could do both and get $2,999. Because the Wells Fargo ATM charged $3 fee, withdrawing $500 plus the $3 fee would throw me over the $500 limit. I had to withdraw $480. Together with the $2,499 cash advance, I got $2,979.

With the few hundred dollars that happened to be sitting in my Wells Fargo checking account, I was still short $300. Although I was disappointed with Wells Fargo not trusting me for even $300, I was focused on getting the certified check done as opposed to whom I should blame for my scramble.

I took out my Chase credit card and did a cash advance against it for $300. The cash advance fee from Chase was 3% of the advance, with a minimum of $10. Interest would also accrue right away without a grace period. Because I was able to make a payment on Chase’s web site with the linked checking account and they would make it effective on the same day, I would not owe any interest. Even if there was interest for a few days, the interest would be minimal ($300 * 20% / 365 = $0.16 per day).

$10 cash advance fee did it. I gave my card, signed a slip, and got $300 in a few minutes. I walked out of the bank with the certified check I needed. I signed the refinance documents on time. By coincidence, mortgage interest rate went up as much as 0.75% on the same day I signed my documents. I did not want to give the lender any excuse to back out of the deal.

The APR for the $10 fee on a $300 cash advance for two days is 39,608%. To be honest I don’t care although I calculated it for writing this post. Chase credit card gave me the money when I needed it. Nobody else could do it in the same timeframe for less. That’s what mattered.

After the dust settles, I need to re-think how I should handle emergency cash needs. When I come up with a strategy, I will write about it. Meanwhile here’s my question for you to think about:

If you need $4,000 in the next hour, how will you get it and how much will it cost you?

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  1. TIE says


    I think your question really is: “If you need $4,000 *CASH* (or certified check) in one hour, how will you get it and what will it cost?”

  2. Harry Sit says

    @TIE – I guess you can say that. If you can charge it on your credit card or write a check, you don’t really need the money in the next hour. You won’t need the money until your credit card bill is due or until that check hits your account.

  3. Dave says

    That is exactly why I opened a HELOC at Prime-.5% (currently sitting on a 3.50% floor). I could instantly transfer up to $37500 to my checking account (at the same credit union), drive to the credit union branch, and get a certified check for $4000. The cost would just be the daily interest on the HELOC, which would be about 38 cents a day. Best of all, I opened the HELOC about 2 years ago with 0 closing costs (doubtful they would still do the same deal today).

  4. enonymous says

    certified check from my used to be WAMU now Chase bank account
    (almost all of my cash is in my fidelity account like you, but I keep 5k handy for just these sorts of emergencies in a locally accessible bank account)

  5. Pelon says

    I had a very similar thing happen to me. The afternoon before my loan closed, the loan officer told me I needed a certified check or EFT payment. Since I use an internet bank (USAA), there was no way for me to get a certfied check by the next day. Luckily, the people at USAA were able to get an EFT payment there in time.

    The most annoying thing about the whole situation is that I had repeatedly asked the loan officer what I needed to bring to closing. It wasn’t until the afternoon before the closing that she informed me that the ckeck needed to be certified.

  6. indexfundfan says

    TFB, do you have the Wells Fargo PMA account linked with the 100 free-trade brokerage account? If so, you could have borrowed against your equity in a margin account. There is no transfer fee, and the interest is 7% APR.

  7. SanDance says

    Could you have done a wire transfer from one bank to another? I did that before when discovering a mistake. I paid $20 fee for the wire transfer, which was better that the $39 NSF and all the associated headaches. WAMU free checking is supposed to still offer No fee for Domestic Outgoing for Foreign Outgoing Wire Transfers under Chase.

  8. Jamie says

    Few years ago, I needed few thousands in cash in few hours. At the time, not having the financial tools like you had, I had to ask few relatives to do ATM withdraw for me. Of course, that method doesn’t work for many people. I was glad that I have were enough relatives that trusted me and was willing to withdraw $500/per person and handed it over to me 🙂 whew.

    Good to make a mental note about certified check @ closing table. Last few times we were at closing tables, personal checks were fine.

  9. KD says

    I have all my liquid money in my rewards checking account @ 4.25% upto $50K with my local credit union. That way I have access to my money during business working hours. In addition, I can walk into any other credit union and access my account for free.

    If you have a Discover credit card, you can get credit cash back at Walmart: its just like cash advance but without any fees or pin number access. Just swipe the card, hit the $60 amount in cash back, sign and you are done. No more need of ATMs. I have split my groceries into multiple transactions, to get multiples of $60.

  10. Jonathan says

    I always like to have at least about $10k in a local bank. When WaMu’s savings rates were good, I had a chunk there as they are local for me. Nowadays I have a chunk in a credit union with rewards checking-level of interest.

    But in general, I think the loan officer should have made it clear you needed a certified check beforehand.

  11. AM says

    @KD: what’s your local credit union?? 4.25% up to 50K sounds like an unbelievable deal.

    @TFB: thanks for the post. I am in the process of moving my checking and savings accounts to an online-only bank (Schwab), and after reading this I realized that I need to plan for a cash emergency, so will probably keep a small account at a large bank with many branches.

  12. AM says

    In case anyone else has been clueless about Rewards-style checking (as I was until today), these do exist and the catch is that they require a large number of monthly DEBIT card transactions (typically 10) to qualify for the high interest rate. I will definitely be considering it, but I know that I like my life to be simple and don’t like to keep track of what payment methods I use, etc. So I’ll have to think about it. The rate is very appealing though.

  13. Pablo says

    I keep a 5-figure balance at a local bank (their closest branch is within walking distance of my house and open 7 days/week). In the past decade, I’ve only needed “above the daily ATM withdrawal limit” twice, but, both times, I was able to quickly get cash when I needed it. I view the lower interest rate (vs. my Fidelity Tax-Exempt Money Market Account) as an insurance-style premium – not a big deal.

    Plus, quite honestly, in my depressed town, having ‘that much’ money in my local bank garners me VIP treatment.

  14. Ted says

    If I need cash or certified check fast I will go to my local regional bank where I have my checking account and a HELOC. I have a line of credit for about a third my annual salary. They will write me a certified check for a waived fee if I smile and ask nicely (done this twice).

    The interest is Prime + 0.75. I have a linked money market where I can pay it immediately. If I pay within a few days the Bank has always written off all the interest. So I never pay any fees or interest whenever this happens.

    PS – How do you explain calculating an APR for a fee?. Those are two different animals.

  15. Brad says

    I think Wells Fargo let you down. I’ve been with BofA for 15 years or so (not that I’m extremely happy with all they do, all the time), but anyway they have a note in my account of some kind, that basically says, if this guy wants to cash a $10,000 check, you give him the money. That’s the limit btw, a teller told me once that I can get up to $10k anytime.

    I’ve used it twice I think. Literally I say, here’s my check, they say, here’s your cash sir. I’ve done this with just a thousand dollars in the account (or even just a few dollars once I think). In any case, much less dollars in the account than I’m cashing the check for. These are checks I write, 3rd party checks, etc.

    Once, back in the early 90s, shortly after setting up the account (maybe a year or two after), I deposited a down payment I had for a house I was buying… it sat in the account for maybe for a week or two. $40,000 or so. But other than that I haven’t used the BofA account for very much over the years.

    Anyway, BofA requires I keep $1,000 in that account to avoid fees (with low interest rates these days, that’s cheap!), so I do.

    Then, I periodically check with competitors, most recently with WAMU, where I said, hey, you guys want my business, right? I’ve been with BofA for years, and they will cash a $10,000 check anytime for me–if I ‘come over’ to you, I want the same thing. I’ll show you my brokerage accounts, my credit limits, lots more than I’m going to keep here, everything/open kimono… I say, “Well, you’re not going to get the kinds of customers you want then. You’re just going to get free-loaders who want a free checking account, rather than folks with $$$ to move around.”

    Anyway, I went ahead and opened a free checking account at WAMU (now Chase) and have made some deposits etc. hoping to build that rep up again with another bank, but I haven’t made much progress and it’s been 3 yrs since I opened that one.

    So I treasure my BofA account!

    Thanks for the post.


  16. Brad says

    Oops. I made the mistake of using angle brackets for WAMU’s responses….

    Here’s that paragraph again, with their responses in parentheses:

    Then, I periodically check with competitors, most recently with WAMU, where I said, hey, you guys want my business, right? (Yes) I’ve been with BofA for years, and they will cash a $10,000 check anytime for me–if I ‘come over’ to you, I want the same thing. (Nope, no can do.) I’ll show you my brokerage accounts, my credit limits, lots more than I’m going to keep here, everything/open kimono… (Nope, sorry, we need to have a track record with you over time.) I say, “Well, you’re not going to get the kinds of customers you want then. You’re just going to get free-loaders who want a free checking account, rather than folks with $$$ to move around.” (Me thinks they’re crazy, I’m exactly the kind of customer they want, no? If any banking execs read this and have a response, I’d be interested in what you have to say! Back to the personal banker idea you say, I suppose!)

  17. Harry Sit says

    Brad – I agree. I need that note in my account! I’m disappointed with Wells Fargo, but for a one-time cost of $11, I’m willing to let them slip once this time. By the way the best customer for a bank is a customer who *keeps* a lot of dollars in the bank’s low yield savings account and CDs, or who bounces a check once a month. If you don’t bounce a check and pay an overdraft fee, you don’t count. Neither do I.

  18. Suzanne says

    Q ~ can you get a credit card cash advance from your Wells Fargo card for $10,000 if your credit limit is over this amount without red tape, third degree, etc? Is there a good way to do this?

  19. Harry Sit says

    Suzanne – Not 100% of your credit limit is available for cash advance. On my card (not from Wells Fargo), only 20% of the credit limit is available for cash advance. If you have that much limit available for cash advance, doing it isn’t a problem. The fee is. At 3%, a $10,000 cash advance will cost you $300.

  20. leo says

    Honestly you should just do as I do, buy a good quality safe box and keep your money on sight…. get access to your cash any time, and have an account just to make checks and pay bills.

  21. Jerome Christopher says

    Thank you TFB for the information about Credit card cash advances. TImely and very useful.

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