What are Cash Advances?

Cash advances in the Philippines refer to the process of obtaining funds from your credit card issuer or other financial institutions. This short-term loan allows cardholders to withdraw cash, either from an ATM or over the counter at a bank or credit union. The amount that can be withdrawn is typically a percentage of the card's credit limit and is known as the cash advance limit.

Features

1. Cash Advance Limit. The amount you can withdraw as a cash advance is typically a percentage of your credit card's overall credit limit. This limit is set by your credit card issuer.

2. Cash Advance Fees. Credit card companies may charge a cash advance fee for each transaction. This fee is separate from the interest charged on the cash advance and is usually a percentage of the total amount withdrawn.

3. Cash Advance APR. The cash advance APR, or Annual Percentage Rate, is the interest rate applied to the amount withdrawn. Cash advance APRs are often higher than the interest rates for regular credit card purchases.

4. Separate Credit Limit. Cash advances usually have a separate credit limit from the one used for regular credit card purchases. It's essential to be aware of both limits to manage your finances effectively.

5. Transaction Fee. In addition to the cash advance fee, there might be a transaction fee associated with each cash advance. This fee is a percentage of the total amount withdrawn.

Pros and Cons

Pros

Cons

How to Get a Cash Advance?

Apply for a loan

1. Check Cash Advance Limit. Ensure you know your credit card's cash advance limit, which is the maximum amount you can withdraw as a cash advance. This information is often available on your credit card statement or by contacting your credit card issuer.

2. Locate ATMs or Partner Banks. Identify ATMs or partner banks of your credit card provider where you can perform cash advances. Most credit card companies in the Philippines allow cash withdrawals from ATMs that display the credit card company's logo.

3. Insert Credit Card. Visit the ATM or partner bank and insert your credit card into the machine. Follow the on-screen prompts and select the option for a cash advance.

4. Enter Withdrawal Amount. Specify the amount you wish to withdraw as a cash advance. Ensure the amount does not exceed your cash advance limit. The machine will usually display any associated fees and request confirmation.

5. Collect Cash and Receipt. Once confirmed, the ATM will dispense the requested cash. Collect both the cash and the transaction receipt, which provides details such as the amount withdrawn, fees, and the transaction date.

Requirements and Conditions

Requirements

1. Active Credit Card Account. To qualify for a cash advance in the Philippines, you typically need an active credit card account with an eligible credit card company. Ensure your credit card is not expired or blocked.

2. Identification Documents. Prepare valid identification documents, such as a government-issued ID (e.g., driver's license, passport, or ID card). Some credit card issuers may require additional identification for security purposes.

3. Good Credit History. A good credit history enhances your eligibility for a cash advance. Credit card companies may review your credit score and payment history to assess your ability to repay the borrowed amount.

4. Meeting Income Requirements. Some credit card issuers may have income requirements to qualify for a cash advance. Ensure that your income meets the specified criteria set by the credit card company.

Conditions

1. Cash Advance Limit. The maximum amount you can withdraw as a cash advance is determined by your credit card's cash advance limit. This limit is often a percentage of your overall credit limit.

2. Interest Rates. Cash advances generally have higher interest rates compared to regular credit card purchases. Interest starts accruing from the day of the transaction, and there is usually no grace period.

3. Cash Advance Fees. Credit card companies typically charge a cash advance fee for each transaction. This fee is usually a percentage of the total amount withdrawn and may have a minimum and maximum limit.

4. Transaction Fees. In addition to the cash advance fee, there may be additional transaction fees associated with cash advances. These fees could apply for using ATMs or other withdrawal methods.

5. Repayment Terms. Cash advances may not have a fixed repayment schedule, but the outstanding balance should be repaid promptly. Minimum payments are often required, and delaying repayment can lead to higher interest charges.

Best Places to Get a Cash Advance

1. UnionBank in the Philippines allows customers to withdraw cash advances from ATMs displaying the UnionBank logo. Ensure that your credit card has an available cash advance limit, and visit UnionBank ATMs for convenient access to cash.

2. BPI (Bank of the Philippine Islands) is a traditional financial institution offering cash advance services for its credit cardholders. You can withdraw cash from BPI ATMs or any ATM displaying the MasterCard or Visa logo. Check your credit card's cash advance limit and applicable fees before proceeding.

3. Citibank credit cardholders in the Philippines can access funds from Citibank ATMs or any ATM displaying the Visa logo. It's important to be aware of the cash advance limit, fees, and interest rates associated with your Citibank credit card.

4. HSBC credit cardholders can obtain cash advances from HSBC ATMs or other ATMs displaying the Visa or MasterCard logos. Confirm your credit card's cash advance limit, fees, and interest rates with HSBC before making a withdrawal.

Best Places to Get a Loan Today

Digido

Apply for a loan

Digido is an online loan company in the Philippines, offering non-collateral cash loan services. They provide a fully automated online portal for a seamless loan application process. Key features include:

• Automated application process.
• Loans for various purposes, including emergency and OFW loans.
• No collateral required.
• Online loan calculator.
• Transparent interest rates, with a commitment to fair lending practices.
• Loan accessibility for unbanked individuals.
• Secured operations, fully licensed and registered under the SEC.

MoneyCat

Apply for a loan

MoneyCat is an online payday loan provider in the Philippines, offering efficient financial solutions with an easy-to-navigate online registration form. Their features include:

• Swift approval process, usually within 24 hours.
• Flexible loan amounts ranging from PHP 500 to PHP 20,000.
• Convenient application methods via website or mobile app.
• First loan free of charge for new users.
• Licensed by the SEC, ensuring reliability and legitimacy.

Finbro

Apply for a loan

Finbro is an online lending platform providing quick loans with durations of up to 12 months and amounts ranging from ₱1,000 to ₱50,000. Their service includes:

• Online application process that can be completed in 15 minutes.
• Transparent conditions with no extra costs.
• 24/7 service availability.
• Data protection for users.
• Higher interest rates for repeat loans.
• No mobile app for accessibility.

Kviku

Apply for a loan

Kviku is an online lending institution known for providing short-term loans with a fully automated online service. Their main features are:

• Simple and user-friendly loan procedures.
• 24-hour approval process.
• No hidden fees or charges.
• 100% online lending experience.
• Competitive interest rates at 0.16% daily.
• Flexible repayment terms up to 180 days.
• Registered and authorized by the SEC, ensuring reliability.

Ways to Receive the Money

1. ATM Withdrawals. Many credit card issuers allow borrowers to access cash advances through ATMs using their credit cards. Borrowers can simply insert their credit card into an ATM, select the cash advance option, and withdraw funds up to their cash advance limit.

2. Over-the-Counter Withdrawals. Some financial institutions, such as banks or credit unions, offer over-the-counter cash advances. Borrowers can visit a branch location and request a cash advance from a teller using their credit card or other eligible accounts.

3. Online Transfer. Certain lenders and financial institutions allow borrowers to request cash advances through online banking platforms or mobile banking apps. Borrowers can initiate a cash advance transfer from their credit card account to a linked checking account.

Things to Pay Attention To

1. Credit Card Cash Advance Limit. Before considering a cash advance in the Philippines, be aware of your credit card's cash advance limit. This is the maximum amount you can withdraw as a cash advance, and it is typically a percentage of your overall credit limit.

2. Cash Advance Fees and Interest Rates. Understand the fees associated with credit card cash advances, including the cash advance fee and the cash advance interest rates. These rates are often higher than those for regular credit card purchases.

3. Credit Card Balance and Available Credit. Consider your existing credit card balance and available credit. Cash advances can impact your available credit and credit utilization ratio, potentially affecting your credit score.

4. Repayment Terms and Grace Period. Be aware of the repayment terms for cash advances. Unlike regular credit card purchases, cash advances may not have a grace period, and interest starts accruing immediately after the transaction.

5. Alternative Funding Methods. Explore alternative funding methods such as personal loans, payday loans, or merchant cash advances. Compare the terms, fees, and interest rates to determine the most cost-effective option for your financial needs.

6. Fine Print and Unexpected Fees. Carefully read the fine print of your credit card agreement to understand any additional fees or terms associated with cash advances. Be vigilant about unexpected fees that may apply, including flat fees or additional charges for certain transactions.

How to Repay a Cash Advance?

1. Understand Repayment Terms. Familiarize yourself with the repayment terms for the cash advance. Check the credit card agreement or contact your credit card issuer to know the due date, minimum payment amount, and any applicable fees.

2. Access Online Banking. Log in to your online banking account or use the mobile banking app provided by your credit card issuer. Ensure that you have the necessary login credentials.

3. Locate Cash Advance Transaction. Identify the specific cash advance transaction in your credit card account. This information is typically available in the transaction history section.

4. Make Payment. Initiate the payment for the cash advance by selecting the transaction and choosing the option to make a payment. Enter the amount you wish to pay, ensuring it meets the minimum payment requirement.

5. Confirm and Verify. Before finalizing the payment, review the details to confirm the accuracy of the transaction. Verify the payment amount, date, and any associated fees. Once satisfied, proceed to confirm and complete the credit card payment.

Reasons for Getting Rejected for a Cash Advance

1. Poor Credit History. A history of late payments, defaults, or a low credit score can result in rejection, as credit card providers assess creditworthiness before approving cash advance requests.

2. Exceeding Cash Advance Limit. Trying to withdraw a cash advance amount surpassing the assigned cash advance balance on the credit card can lead to rejection.

3. Delinquent Account Status. If the borrower's credit card account is in a delinquent or blocked status due to missed payments, the cash advance request may be denied.

4. Unmet Income Requirements. Some credit card issuers have income requirements for cash advances. If the borrower's income doesn't meet the specified criteria, the application may be rejected.

5. Existing High Credit Card Balance. A high outstanding balance, especially close to the credit limit, may result in rejection.

Alternatives

1. Payday Loans. A payday loan is a short-term, unsecured personal loan typically designed to cover immediate expenses until the borrower's next payday. They often have a quick application process.

2. Salary Loans. Some employers offer salary loans to their employees. These loans allow individuals to borrow a portion of their expected salary and repay it through salary deductions.

3. Personal Loans. Personal loans are unsecured loans that individuals can use for various purposes, including emergencies or unexpected expenses. They generally have fixed monthly payments over a specified term.

4. Pawnshop loans involve using personal items (such as jewelry or electronic gadgets) as collateral to secure a loan. If the borrower fails to repay, the pawned item is forfeited.

Editorial Opinion

Important

How to Choose a Lender in the Philippines

1. Ensure that the lender is registered with the Securities and Exchange Commission (SEC) of the Philippines.

2. Investigate if the lender is a member of recognized industry associations in the Philippines, such as the Chamber of Thrift Banks or the Philippines Finance Association.

3. Carefully examine all terms and conditions of your loan contract. This includes understanding the repayment schedule, fees, and any penalties for late or missed payments.

4. Payday loans can have high-interest rates. Make sure the contract clearly outlines the interest rate and total cost of the loan, including any processing fees or additional charges.

5. Familiarize yourself with your rights regarding cancellation. In the Philippines, consumers may have the right to rescind the loan within a specific period after signing the agreement.

6. Research the lender's reputation through customer reviews, complaints, and feedback available online.

Methodology

In Finanso, we've carried out a comprehensive analysis of over 50 lenders in the Philippines, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.