Yes, you can get cash from a credit card, but it costs more than a regular purchase
A cash advance lets you withdraw money from your credit card at an ATM, bank, or through a convenience store clerk. The card issuer treats it like a loan against your credit limit. Unlike a purchase, a cash advance starts charging interest when ready — there is no grace period — and the interest rate is usually higher than your regular purchase rate. You also pay an upfront fee, typically 3 to 5 percent of the amount you withdraw.
Three main methods exist: ATM withdrawal using your PIN, a bank teller transaction with your card and ID, or a convenience store cash-back request. Each works the same way from the card's perspective, but the fees and limits differ slightly by method and by card issuer.
Key Takeaways
- Cash advances charge interest from day one with no grace period, and the interest rate is usually 2 to 5 percentage points higher than your purchase rate.
- You pay an upfront fee of 3 to 5 percent of the cash amount on top of interest, making a $500 advance cost $15 to $25 before any interest accrues.
- Most cards limit cash advances to 20 to 50 percent of your credit limit, and some issuers cap the daily ATM withdrawal at $500 or less.
- A personal loan, payday loan alternative, or even a credit card balance transfer card will almost always cost less than a cash advance if you have time to set it up.
How the fees and interest work
When you take a cash advance, two costs hit when ready. The cash advance fee is a percentage of the amount withdrawn — usually 3, 4, or 5 percent depending on your card. A $500 withdrawal costs $15 to $25 right away. Some cards cap the fee at a flat amount like $10, so a small withdrawal might cost less as a percentage, but most cards charge whichever is higher.
The second cost is interest, which starts accruing the day you withdraw the money. Your card's cash advance APR (annual percentage rate) is almost always higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 24 or 28 percent. Interest compounds daily, so a $500 advance at 25 percent APR costs roughly $3.42 per day in interest alone. If you pay it back in 30 days, you owe about $103 in interest plus the $15 to $25 fee — a total of $118 to $128 for borrowing $500.
No grace period exists for cash advances. Interest starts the moment the money leaves the ATM, unlike a purchase where you might have 21 days interest-free if you pay in full by the due date.
Limits on how much you can withdraw
Your card issuer sets a cash advance limit separate from your credit limit. This limit is often 20 to 50 percent of your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $2,500. You can request a higher limit by calling the card issuer, but they may deny the request or lower your limit if your credit score drops.
ATM withdrawals also have daily limits, typically $500 to $1,000 per day depending on the card and the ATM network. If you need $2,000, you may have to make multiple withdrawals over several days. Bank teller withdrawals sometimes allow a higher single transaction, so asking a teller instead of using an ATM can occasionally get you more cash at once.
Where to get a cash advance
ATM withdrawal is the fastest method. Use any ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover). You need your PIN. The ATM will show you the fee before you confirm, usually $2 to $5 per transaction on top of your card's cash advance fee.
Bank teller is the second option. Walk into any bank or credit union branch with your card and ID. The teller processes the withdrawal like a check cash. Some banks charge an additional fee if you are not a customer, typically $5 to $10. This method usually has no ATM network fee, only your card issuer's cash advance fee.
Convenience store or grocery store cash-back is the third route. Some stores let you ask the cashier for cash back when you swipe your card, similar to a debit card transaction. Not all stores offer this, and limits are usually lower — often $20 to $100 per transaction. You still pay your card's cash advance fee, but you avoid the ATM network fee.
Cheaper alternatives to consider first
Before taking a cash advance, explore other borrowing options. A personal loan from a bank, credit union, or online lender usually has a lower interest rate than a cash advance — often 8 to 20 percent depending on your credit score — and no upfront fee. The downside is approval takes a few days to a week, so this works only if you are not in an when ready crisis.
A balance transfer card with a 0 percent introductory APR can move existing credit card debt interest-free for 6 to 21 months, though it charges a 3 to 5 percent transfer fee. This does not give you cash, but if you need cash to pay off another debt, it can save money on interest.
Payday loan alternatives like credit union loans or employer paycheck advances sometimes charge less than a cash advance. A credit union payday alternative loan (PAL) caps the fee at $20 and the interest rate at 28 percent, both lower than most cash advances. You must be a credit union member, but membership is often open to anyone in your area.
If you have a friend or family member who can lend you money interest-free, that is always the cheapest option. A written agreement protects both of you and keeps the relationship clear.
When a cash advance might make sense
A cash advance is rarely the best choice, but a few situations make it worth considering. If you need cash for an emergency and have no other way to get it — no time for a personal loan, no access to a credit union, no family to borrow from — a cash advance is faster than most alternatives. You get the money in minutes.
A cash advance also makes sense if you are only borrowing a small amount for a very short time. If you need $100 for two days and can pay it back when ready, the interest cost is minimal — maybe $1 or $2 — and the fee might be capped at a flat $5 or $10, making the total cost reasonable.
If your credit score is very low and you cannot get a personal loan, a cash advance is available to you as long as you have available credit. It is not ideal, but it is an option when others are closed.
How to minimize the damage if you do take one
If you decide to take a cash advance, pay it back as fast as possible. Every day the balance sits, interest accrues. Set a specific repayment date before you withdraw the money, and treat it like a bill you cannot miss.
Use the smallest withdrawal you can. If you need $300, do not withdraw $500 just because you can. The fee is a percentage, so less cash means a smaller fee, and less interest accrues on a smaller balance.
Pay more than the minimum payment. Your card issuer applies payments to your lowest-interest debt first — usually purchases — so your cash advance balance may stay on the card longer than you think. Make a payment directly toward the cash advance, or pay your entire statement balance to clear it faster.
Frequently Asked Questions
Does a cash advance hurt my credit score?
A cash advance itself does not directly hurt your score, but it increases your credit utilization — the percentage of your available credit you are using. High utilization can lower your score temporarily. Paying it back quickly brings your utilization down and your score recovers.
Can I take a cash advance from a credit card I just opened?
Usually yes, but some new cards have a waiting period or a very low cash advance limit for the first 30 days. Check your card agreement or call the issuer to confirm. Your cash advance limit may be lower than your purchase limit even on an established card.
What happens if I cannot pay back a cash advance?
The balance stays on your card and interest keeps accruing. If you miss payments, your credit score drops and the issuer may close your account or raise your interest rate. Contact your card issuer as soon as you know you will struggle to pay — they may offer a hardship plan or lower interest rate temporarily.
Is there a difference between a cash advance and a balance transfer?
Yes. A balance transfer moves debt from one card to another and usually has a lower fee and interest rate. A cash advance withdraws actual cash and charges a higher rate and fee when ready. Balance transfers are for moving existing debt; cash advances are for getting cash in hand.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is expensive. You pay the cash advance fee and high interest rate, then pay off the other card. A balance transfer accomplishes the same goal with lower fees and a possible 0 percent introductory rate, so it is almost always cheaper.