What is a cash advance?
A cash advance is money you borrow for a short time and repay soon after, usually on your next payday. In Canada the term is used for three very different products: a withdrawal against your credit card, a small advance from a cash advance app, and a short term online loan from a licensed lender. Knowing which one you are using matters, because the cost can range from a few dollars to a very high rate.
The three main types of cash advance in Canada
1. Credit card cash advance
This is cash you withdraw against your credit card limit at an ABM or bank. It is quick, but it is one of the more expensive options:
- There is no interest free grace period. Interest starts on the day you take the cash.
- The cash advance interest rate is usually higher than your purchase rate, often around 22.99% to 24.99%.
- You also pay a cash advance fee, commonly $3.50 to $5, plus any ABM fee.
Because interest begins immediately, a credit card cash advance is best repaid as fast as possible.
2. Cash advance apps
Apps such as Bree and Nyble offer small, interest free advances in Canada. They are cheap, but the limits are low (often $50 to a few hundred dollars) and most charge a monthly membership fee. They work well for a very small gap, less well when you need a larger amount quickly.
3. Online cash advance from a licensed lender
This is a short term loan from a regulated lender, sent straight to your bank account. You can usually borrow more than an app allows, and the cost is capped by provincial rules. In the provinces that regulate payday lending, the maximum cost is $14 for every $100 borrowed, shown clearly before you accept.
How much does a cash advance cost?
It depends on the type:
- Credit card: interest from day one at roughly 22.99% to 24.99%, plus a fee of about $3.50 to $5.
- Cash advance app: often no interest, but a monthly membership fee and a small charge for instant transfer.
- Online cash advance: up to $14 per $100 in regulated provinces, with the repayment date set to your next payday.
For a clear breakdown of fees and your rights, the Financial Consumer Agency of Canada is the official resource.
How to choose the cheapest option
- Need a very small amount? A cash advance app or asking a biller for a few extra days may cost the least.
- Have room on a credit card and can repay fast? A credit card cash advance works, as long as you clear it quickly.
- Need a few hundred dollars by e-Transfer today? An online cash advance from a licensed lender is often the simplest, with a cost you can see up front.
How a cash advance works with Cash Cowboy
Cash Cowboy is a licensed online lender offering a simple cash advance in Canada. You apply online in a few minutes, and once you are approved and accept your terms, funds are sent by Interac e-Transfer, so many borrowers get their money the same day. Loans start at $50 and go up to $1,500, so you borrow only what you need, and the cost follows the provincial cap with the repayment date set to your next payday.
Frequently asked questions
What is the difference between a cash advance and a loan?
A cash advance is a type of short term loan meant to be repaid quickly, usually by your next payday. A regular loan is often larger and repaid over months.
Is a cash advance bad for your credit?
Taking a cash advance does not automatically hurt your credit, but a high balance or a missed repayment can. Repaying on time keeps your record clean.
How fast can I get a cash advance in Canada?
A credit card cash advance is instant at an ABM. An online cash advance from a lender that funds by Interac e-Transfer can often reach your account the same day once you are approved.
Can I get a cash advance with bad credit?
Many online lenders look at your income and bank account rather than only a credit score, so a lower score does not automatically rule you out.
Want a simple cash advance with the cost shown up front? See how much you can borrow with Cash Cowboy, or read our guide to the best payday loans in Ontario.
