Pay advance apps vs credit card cash advance

By   |   Verified by Andrew Boyd   |   Updated 5 Oct 2022

Picture this: you’re still a week out from your fortnightly payday and you have an unexpected bill to pay. But you won’t have enough cash until next payday.

If you are choosing between using a credit card cash advance and a pay advance app, which one will you choose? Well, there are several things to consider. Scroll down to find out.

Amount available

A credit card cash advance is usually only limited by the amount available in your credit limit – the difference between your limit and the amount you already owe.

A pay advance is limited to a percentage of your regular pay, based on an assessment of what you can afford to borrow when the app provider looks at your spending pattern in your bank account. The maximum advance is around $1,250. Popular pay advance services include Beforepay, MyPayNow, and CommBank AdvancePay.


If you already have a credit card that allows cash advances, and have enough available credit left, you can withdraw cash instantly from an ATM.

A pay advance via an app may take a little longer. Although the account set up and approval process is fast, it could take anything from minutes to up to two business days for the funds to appear in your account.

However, if you don’t already have a credit card and need to apply for one, it could take several days to get final approval, and then another day or two for the card to arrive in the mail.

Eligibility and credit score

To qualify for a credit card you will in most cases need a good credit score, as well as being an Australian citizen or visa holder aged 18 or over.

To use a pay advance app you will need similar age/citizenship/visa qualifications, as well as being in paid employment earning at least a few hundred dollars weekly, with your pay deposited into a bank account by your employer. Your credit score is unlikely to matter.

If you don't know what your score is, you can check it for free on Finty.

Credit score impact

When you apply for a credit card, the card issuer will make a ‘hard credit enquiry’ by requesting your credit score and credit history file from a credit bureau. This enquiry will itself be recorded in your file and will reduce your score by a few points for a while.

If you fail to make timely minimum monthly repayments of your cash advance, this information could find its way into your credit file and further reduce your score.

Pay advance apps typically do not make hard credit enquiries, preferring to make their own assessment by looking at your bank account transactions. And, since your repayment is automatically debited to your bank account when your next pay hits, you’re very unlikely to damage your credit score by paying late or defaulting.

Case study of the cost

Pay advance apps don’t charge interest, but instead, earn their income from a fee they charge you for each advance you receive. Some apps charge a fixed flat fee of between $2 and $5, while others charge a percentage – e.g. 5% – of the amount advanced.

Credit cards charge interest – at rates varying from 9% p.a. to over 20% p.a. – plus a cash advance fee which on average is the greater of $3 and about 2.5% of the amount withdrawn.

In the case of the $180 advance in the opening scenario, with a pay advance app you might pay a fee of $2, or $5, or $9 (5%).

With a credit card cash advance, assuming that you were able to repay the advance a week later, you would pay interest of between $0.31 (9% p.a.) or $0.69 (20% p.a.), a total of between $4.81 and $5.19 when the $4.50 (2.5%) cash advance fee is included.

If you don’t already have a credit card, you’d also have to include the cost of the credit card annual fee, which for someone on a tight budget is likely to be between $0 and $60.

Bottom line: If you already have a credit card, a credit card cash advance is likely to be cheaper, because the lowest $2 pay advance fee is usually only available via your employer’s payroll service provider.

You may be able to access a cash advance instalment plan, making a credit card cash advance even cheaper.

Pros and cons

Pay advance

  • Instant cash before payday.
  • No interest charge, just a transaction fee.
  • Automated repayment, so no late payment fees.
  • No credit score impact.
  • Cheaper than a payday loan.
  • Advance amount limited to a percentage of your pay and repayment affordability.
  • Fee could work out more expensive than credit card cash advance.
  • Current advance must be repaid before taking another.

Credit card cash advance

  • Instant cash before payday (if you already have a card).
  • Credit cards can be used at ATMs, which are widely available.
  • Could work out cheaper than a pay advance if you repay immediately when your pay comes in.
  • Cheaper than a payday loan unless you take years to repay.
  • Advance amount only limited to your remaining credit limit.
  • Delay accessing cash if you need to apply for a card.
  • Cash advance fee and interest both payable.
  • Could work out more expensive than a pay advance if you delay repayment.
  • Potential for credit score damage.


If you already have a credit card and intend to repay as soon as your next pay arrives, a credit card cash advance can work out cheaper than a pay advance app, because pay advance apps with the lowest fees tend to be only available via your employer’s payroll service.

However, neither of them is a permanent solution to financial difficulties. If you’re having to rely on them too often you could end up in an increasing debt spiral. Aim to revise your budget so that your outgoings don’t exceed your income – easier said than done, but it’s the only way to stay clear of debt.