Etherfi Cash uses Direct Pay to spend balances and Borrow mode to borrow against collateral

Which Cash mode avoids financing a purchase with debt?

Direct Pay funds purchases from eligible available assets, so the purchase itself does not create borrowing interest. This makes spending easier to reconcile against an existing balance. Borrow mode keeps collateral exposure while financing the purchase through a loan. Its total financing cost continues changing after the merchant receives payment because interest depends on the outstanding debt and prevailing rate.

Direct Pay eligibility and spend priority

The assets that can fund purchases

The spend-priority selector supports USDC, USDT, EURC, liquidUSD, liquidReserve, liquidEUR, frxUSD and liquidRWA. These are eligible spending assets, not a list of everything that the account can hold. Collateral eligibility and Direct Pay eligibility serve different purposes. A balance that supports borrowing need not be a balance that can pay the merchant directly. Keeping those categories separate avoids treating total portfolio value as immediately spendable money.

The selected balance comes first

In Direct Pay, the Set Spend Priority control on the Portfolio screen determines which eligible asset Cash uses first for future purchases, provided that the chosen balance has sufficient available funds for the purchase. A declined payment can reflect a mismatch between the selected priority and the asset that actually holds funds. The setting concerns the order of eligible spending assets; it does not make an unsupported token eligible or remove restrictions on balances reserved for debt.

Collateral composition controls Borrow mode headroom

Product LTV weights each eligible asset

Borrow mode draws on borrowing power that reflects the value and borrowing limit of each eligible collateral asset. Product loan-to-value, or Product LTV, is the app-enforced borrowing limit. The Optimism lending configuration dated August 27, 2026 listed an 81% Product LTV for USDC. That configuration listed 55% for weETH. These percentages apply to their respective collateral values, so equal asset values can contribute different borrowing capacity. They describe that market configuration, not permanent limits for every account or lending version. Legacy Cash DebtManager limits belong to a different borrowing system and should not be substituted for the active lending market's Product LTV.

Available borrowing includes further constraints

Existing debt reduces remaining borrowing capacity, and market liquidity or account caps can restrict it further. The app also enforces a minimum Health Factor after borrowing. Its available-to-borrow figure incorporates these constraints alongside prices and position balances. Market parameters can change between purchases, so a prior approved payment does not establish the capacity for another one.

Interest begins without a billing cycle

Borrow mode creates a financing obligation when a card purchase adds to the loan, with interest starting immediately. Cash borrowing has no interest-free grace period. The outstanding balance includes accrued interest, and compounding increases the amount owed while the loan remains open. A repayment schedule is not required for the personal Borrow feature.

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The displayed annual percentage yield, or APY, reflects the borrowing rate with compounding. It is variable. Lending-market utilization affects the rate, and the collateral composition can affect the borrowing premium. A rate displayed before spending therefore does not fix the cost for the loan's entire lifetime. The current debt balance records accrued obligations; the quoted annual rate describes the rate at that moment. Repaying sooner reduces the period during which interest can accumulate.

Yield and loan interest use different balances

Supplier yield accrues on the supplied balance, while borrowing interest accrues on outstanding debt. Eligible collateral can keep earning while it supports the loan. Both rates can change, and collateral prices affect the position independently of either rate. Comparing the displayed percentages alone therefore leaves out the sizes of those balances. Liquid vault holdings can retain their yield exposure while the card loan remains a separate repayment obligation.

Card mode and lending participation are separate settings

Direct Pay controls how card purchases are funded; lending participation, labeled Lend, concerns supplying eligible assets and accessing borrowing. The card can remain in Direct Pay while the account has borrowing enabled. Choosing that card mode does not remove supplied assets from the lending market.

With Lend enabled, eligible assets deposited or received later can also be supplied automatically.

Separately requested loans remain available against eligible collateral while the card uses Direct Pay. This separates deliberate borrowing from automatic borrowing at the point of purchase.

Moving the card to Direct Pay leaves existing debt accruing interest under its collateral requirements. Preventing new card-funded borrowing and repaying an established loan have different effects on the account.

Once there is no outstanding borrowed amount, Borrow can be turned off while the card continues using Direct Pay. Disabling Lend stops new supply and borrowing. The setting itself does not withdraw assets already supplied that remain committed to borrowing activity, or repay any outstanding loan.

Repayment options depend on the debt asset

Ordinary repayments use the asset owed

The ordinary repayment route uses the borrowed asset: a USDC loan is repaid with USDC. The Borrow screen provides repayment controls for part or all of a loan. A partial repayment leaves interest accruing on the remaining obligation. Full repayment removes that loan balance and stops its borrowing interest. The absence of an early repayment penalty means the repayment decision does not depend on waiting for a scheduled payment date. These rules concern repayment, separately from the assets eligible for Direct Pay.

The liquidRWA route has additional conditions

The account also supports using liquidRWA to repay USDC debt, with restrictions specific to that repayment route. Debt borrowed within the previous seven days cannot be repaid with liquidRWA. Identity-verified accounts can use this route for up to $10,000 per 24 hours; other accounts have a $2500 limit per 24 hours. Those restrictions do not impose a seven-day wait on ordinary USDC repayment. An asset's suitability for spending therefore does not establish identical repayment terms.

Liquidation uses a different boundary from purchase approval

Purchase approval tests borrowing capacity, while liquidation risk depends on the relationship between risk-adjusted collateral and total debt. In the Aave lending market, Health Factor uses collateral factors rather than Product LTV to weight eligible collateral. Accrued interest is part of total debt. In the Aave lending market used by Cash, a Health Factor below 1 makes a position eligible for liquidation. Exceeding the app's Product LTV limit can block further borrowing without itself triggering liquidation.

A falling collateral price or growing debt can reduce Health Factor after the purchase has completed. App warnings show increasing risk, but the lending protocol provides no liquidation grace period once the position becomes eligible. A liquidator repays debt and receives collateral with an incentive under the market's rules. This can reduce the retained position and does not necessarily close the entire loan. Borrow mode consequently preserves asset exposure only while the collateral remains in the position; liquidation can transfer some of it away.

Debt reservations and spending limits reduce usable capacity

An outstanding loan can reserve part of an eligible balance to preserve the position's required health. Direct Pay availability can therefore fall below the account's total assets even after the card leaves Borrow mode. The same collateral commitments can constrain withdrawals, although the card funding choice and a withdrawal request remain separate operations.

Spending controls add another boundary. Individual card limits apply to that card, while account-level limits cover spending across all associated cards. The first applicable limit reached controls the purchase. A balance sufficient for Direct Pay does not override a card limit, and unused card limits do not create borrowing power. Raising one card's allowance also leaves account-wide limits in place. These controls help explain why available assets, available borrowing and permitted card spending can show different amounts.

Currency conversion and cashback affect the comparison

Direct Pay avoids new loan interest, while currency conversion can still add costs to a card purchase. The converted amount reflects the underlying exchange rate and any additional margin that applies under the membership terms. A tier without an added margin does not eliminate the currency conversion itself. Borrow mode adds its financing cost to any applicable card conversion cost. Purchase-related conversion costs arise separately from interest charged over the loan's duration.

Cashback belongs to a separate rewards calculation, with eligibility and rates governed by membership, monthly spending and transaction currency. Eligible rewards are paid in ETHFI, whose market value can change. They are not an immediate reduction in the loan principal. A card purchase can complete successfully without qualifying for cashback. Rewards become account assets only after the user claims the available ETHFI.