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Should I be concerned about Disco Cash limit?

Super Contributor

Re: Should I be concerned about Disco Cash limit?


Revelate wrote:

Taking a cash advance on a credit card is only for the financially desperate or financially stupid anyway; I know at least one bank absolutely is aware of that and that's been pretty common knowledge out in consumer land for lenders in general, so I would highly discourage taking one except as an option of last resort.

 

Discover /shrug as that card only gets used for 5% anyway... but if you have a default spender like Chase FU or similar, put that cash advance limit down as small as possible so when you try to pay for something a little squirrley that may or may not be counted as a cash advance, it'll reject it and you can do something else instead.


I totally disagree with that. It depends on the credit card.

 

Yes taking a cash advance on a Discover card, and on most bank cards, wouldn't be a good idea, since the cost is prohibitive.

 

But I have a number of credit union cards which charge no fee, and modest interest, on cash advances, and one bank card which charges a flat $3 fee and 8.25% interest on cash advances.  So if I have one of those cards on me, I have no compunction at all about getting a cash advance when I need a little cash and don't feel like squeezing a checking account.


FICO8 EQ 738 TU 786 EX 777 FICO5 EQ 710 Total revolving 500k




Message 11 of 18
Valued Contributor

Re: Should I be concerned about Disco Cash limit?

Cy1215.... you seem to be exactly like me .... Same limits and same first increase...so I am not gonna worry. Thx.

Revelate.... I don't think anyone said we were going to use it ... in fact I said I would NOT use it anyway....and if people had to I wouldn't call them stupid or desperate. We don't know everyone's situation. My post was simply wondering if maybe Discover saw something on my profile they didn't like and that's why it was so low.

Depdep8.... you are right. At register the cash back does not count. It is purchase APR as well.

Everyone else... thx for the replies. Seems I have nothing to worry about.

1 day till Christmas! Smiley Happy
FICO 08: TU= 786 (Dec) EQ= 774 (Dec) EX= 756 (Dec) Favorites: Discover It, Discover Miles, And U.S. Bank Cash+
Message 12 of 18
Regular Contributor

Re: Should I be concerned about Disco Cash limit?

When I was approved for my Discover it (for students) a couple of years ago I had a $1500 limit and a $0 cash advance limit... Now the purchase limit is at $9800 and cash is still $0 Smiley Tongue

Message 13 of 18
Valued Contributor

Re: Should I be concerned about Disco Cash limit?

Lol-don't feel so bad. Makes me wonder what the requirement or UW is on that tho. You'd think it would be 10% of limit or 15%... as long as it is consistent.
FICO 08: TU= 786 (Dec) EQ= 774 (Dec) EX= 756 (Dec) Favorites: Discover It, Discover Miles, And U.S. Bank Cash+
Message 14 of 18
Moderator

Re: Should I be concerned about Disco Cash limit?


SouthJamaica wrote:

Revelate wrote:

Taking a cash advance on a credit card is only for the financially desperate or financially stupid anyway; I know at least one bank absolutely is aware of that and that's been pretty common knowledge out in consumer land for lenders in general, so I would highly discourage taking one except as an option of last resort.

 

Discover /shrug as that card only gets used for 5% anyway... but if you have a default spender like Chase FU or similar, put that cash advance limit down as small as possible so when you try to pay for something a little squirrley that may or may not be counted as a cash advance, it'll reject it and you can do something else instead.


I totally disagree with that. It depends on the credit card.

 

Yes taking a cash advance on a Discover card, and on most bank cards, wouldn't be a good idea, since the cost is prohibitive.

 

But I have a number of credit union cards which charge no fee, and modest interest, on cash advances, and one bank card which charges a flat $3 fee and 8.25% interest on cash advances.  So if I have one of those cards on me, I have no compunction at all about getting a cash advance when I need a little cash and don't feel like squeezing a checking account.


While taking a cash advance on Discover (or any other high cash-advance APR option) is indeed only for the desperate, I do agree that there are times that it makes sense if attractive options (such as a CU card) are available.

 

I've taken cash advances from USAA a couple of times over the last year, only to quickly do a BT to NFCU, all with no fees involved (no CA fee from USAA and no BT fee from NFCU).  I needed liquidity for a couple of months and I didn't want to disturb my savings, and it worked out well. 

 

This being said, I certainly wouldn't recommend taking a CA on a 'regular' credit card with fees and a jacked-up APR, but most folks around here know that.  Smiley Wink

 

 

Edited to add:  My Discover cash advance limit is $1500 (total CL is $15k); if I'm not mistaken that's the same CA limit as when I opened the account with a SL of $5500.  Honestly I've never paid attention to it, though, since there's no way I would ever use it. 

Message 15 of 18
Frequent Contributor

Re: Should I be concerned about Disco Cash limit?

I started out with a limit of $1,800 and a cash advance limit of $400.  My CL is now at $2,800 but my cash advance limit hasn't budged.  Like you, I have no plans to use it and don't even recall the PIN number I would need in order to get cash at an ATM.

Current - FICO 8/2017: EX(764); EQ(742); TU(710)
Beginning - FICO 7/2014: EX(630); EQ(608); TU(581)
Current Mortgage FICO - EX(739); EQ(730); TU(707)
Credit: Wells Fargo Home Projects Charge Card ($7,800); Wells Fargo Home Rebate Visa ($4,000); Capital One Quicksilver ($6,000); Capital One Venture ($5,500); Discover it ($3,600); Macy's ($20,000); BrandsMart ($4,000); Banana Republic ($1,200); Lowes ($12,000); Amex Everyday ($27,000); Macy's Amex ($14,000); Amex Platinum (NPSL); Citi Diamond Preferred ($9,000); Chase Freedom ($9,000)
Message 16 of 18
Moderator

Re: Should I be concerned about Disco Cash limit?

New data point:  I got a CLI on Discover just a little while ago (after submitting my previous post on this thread) and my cash advance limit went from $1500 to $2100, which is still exactly 10% of my total credit line.

 

When I have a moment I'll look back on my older statements to see if I've always been at 10%, but in any case that seems to be the case for me, at least now.

 

Hope this helps.  Smiley Happy

Message 17 of 18
Moderator

Re: Should I be concerned about Disco Cash limit?


SouthJamaica wrote:

Revelate wrote:

Taking a cash advance on a credit card is only for the financially desperate or financially stupid anyway; I know at least one bank absolutely is aware of that and that's been pretty common knowledge out in consumer land for lenders in general, so I would highly discourage taking one except as an option of last resort.

 

Discover /shrug as that card only gets used for 5% anyway... but if you have a default spender like Chase FU or similar, put that cash advance limit down as small as possible so when you try to pay for something a little squirrley that may or may not be counted as a cash advance, it'll reject it and you can do something else instead.


I totally disagree with that. It depends on the credit card.

 

Yes taking a cash advance on a Discover card, and on most bank cards, wouldn't be a good idea, since the cost is prohibitive.

 

But I have a number of credit union cards which charge no fee, and modest interest, on cash advances, and one bank card which charges a flat $3 fee and 8.25% interest on cash advances.  So if I have one of those cards on me, I have no compunction at all about getting a cash advance when I need a little cash and don't feel like squeezing a checking account.


I stated my point badly, play what do the lenders think: who uses cash advances historically?  

 

Data analytics is a thing, and this one is a really really short walk.  You get a friendly and possibly unsophisticated CU fine, but a cash advance on the vast majority of bank lenders I'm not even talking about fees.  Cash Advances are a last resort financially when we're talking their market positioning in what I'll badly term as the "prime/near-prime" lending strata (I know I'm abusing the terms here but take the mortgage UW guidelines where they are relevant and carry them to credit cards and that's what I'm referring to), is that the hand you want to be showing a lender?  Do you really want them flagging your account for that and the additional scrutiny that will likely follow?

 

Look at it another way too: which one is harder to get approved for, a credit card or a personal loan, even if that personal loan is at the cash limit size and the card is at whatever the card limit is?  Cash Advance is basically a straight up unsecured loan, cash in hand... how many banks got out of that space and why did they?

 

It's something to consider.   BT's were anathema back in the mortgage crisis fallout (2008-2012ish) but lenders have relaxed that; however, I'd be very very wary of thinking that cash advances received similar treatment even in the current market.

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 771, TU 4 758, EX 2 758, EQ 8 795, TU 8 762, EX 8 786 (7/28/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


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Message 18 of 18