Yes, you can take cash out of your credit card, but it costs more than a regular purchase
Most credit cards let you withdraw cash at an ATM or get cash back at a store checkout. The card issuer treats this as a cash advance — a short-term loan against your credit limit. Unlike a purchase, a cash advance starts charging interest when ready, usually at a higher rate than your regular APR, and you pay an upfront fee just to take the money out.
The real cost depends on three things: how much you withdraw, how long you carry the balance, and your card's specific terms. A $200 cash advance might cost you $6 to $10 in fees alone, plus interest that starts accruing the same day. If you need cash in an emergency, it may be worth it. If you're using it to avoid a purchase you can't afford, it's a sign to stop and reassess.
Key Takeaways
- Cash advances charge a separate, usually higher interest rate than purchases, starting when ready with no grace period.
- You pay an upfront fee — typically 3 to 5 percent of the amount withdrawn — just to get the cash.
- ATM withdrawals and store cash-back requests both count as cash advances and trigger the same fees and rates.
- If you need cash regularly, a debit card, personal loan, or credit union line of credit will cost you far less.
- Paying back a cash advance should be your first priority because the interest rate is higher than almost any other debt.
How the fees and interest work
When you take a cash advance, your card issuer charges two separate costs. The cash advance fee is a percentage of the amount you withdraw — usually 3 to 5 percent, with a minimum of $2 to $10. A $300 withdrawal might cost $9 to $15 just in fees. Some cards charge a flat fee instead, like $10 per transaction regardless of amount.
The second cost is interest. Your card's regular APR — the rate you pay on purchases — does not explore to cash advances. Instead, the issuer uses a separate, higher rate called the cash advance APR. This rate is often 5 to 10 percentage points higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 25 percent or more. Interest starts accruing the day you withdraw the cash, with no grace period like you get on purchases.
The math adds up fast. A $300 cash advance at a 25 percent APR costs about $6.25 per month in interest alone, on top of the $9 to $15 upfront fee. If you carry the balance for three months, you've paid roughly $25 in interest plus the fee — nearly 10 percent of the original amount.
Where you can get cash and what counts as a cash advance
You can withdraw cash in three main ways. The most common is an ATM withdrawal — you insert your credit card and enter your PIN, just like a debit card. The second is cash back at a store — you make a purchase and ask the cashier for extra cash, which is deducted from your credit limit. The third is a convenience check — your card issuer mails you blank checks that you can write against your credit line, though this is less common now.
All three count as cash advances and trigger the same fee and interest rate. There is no cheaper way to get cash from your credit card. Some cards offer a slightly lower cash advance APR if you're a long-standing customer with a good payment history, but this is rare and usually only a 1 to 2 percentage point reduction.
Your credit limit covers both purchases and cash advances combined. If your limit is $2,000 and you withdraw $500 in cash, you have $1,500 left to spend on purchases. Some cards set a separate cash advance limit — often 20 to 30 percent of your total credit limit — so you might not be able to withdraw your full available balance even if you wanted to.
Why cash advances hurt your credit score
A cash advance affects your credit in two ways. First, it counts toward your credit utilization ratio — the percentage of your total credit limit you're using. If you have a $5,000 limit and take a $500 cash advance, your utilization jumps to 10 percent. High utilization signals to lenders that you're relying heavily on borrowed money, and it can lower your credit score by 10 to 50 points depending on how much you're using.
Second, the interest and fees make it harder to pay off the balance quickly. The longer you carry a cash advance, the more interest you pay, and the longer your utilization stays high. This compounds the damage to your score. If you miss a payment on a cash advance, the penalty is the same as missing a purchase payment — a late fee, a higher APR, and a mark on your credit report.
The credit impact is temporary. Once you pay off the cash advance and your utilization drops, your score will recover. But the financial cost is permanent — the interest and fees you paid are gone.
Cheaper ways to get cash when you need it
If you find yourself taking cash advances regularly, it's a sign that your usual payment methods aren't working for you. A debit card linked to your checking account lets you withdraw cash at any ATM with no fee (if you use your bank's network) and no interest. If you don't have a checking account, a prepaid debit card is cheaper than a credit card cash advance, though some charge per-transaction fees.
A personal loan from a bank or credit union is another option if you need a larger amount. Personal loans charge interest, but the rate is usually lower than a credit card cash advance APR, and you pay it back on a fixed schedule so you know exactly when you'll be debt-free. Credit unions often offer small personal loans of $500 to $2,500 at rates 5 to 10 percentage points lower than credit cards.
A credit union line of credit works like a credit card but with lower rates and fees. If you're a member, you can draw cash whenever you need it and pay interest only on what you use. Some credit unions charge no fee at all for cash withdrawals from their line of credit.
If you're in a true emergency — you need cash today and have no other option — a cash advance might be necessary. But if you're using it to cover regular expenses or to avoid spending money you don't have, the real problem is your budget, not your access to cash. Fixing the budget will save you far more than any borrowing strategy.
How to pay off a cash advance as fast as possible
Once you've taken a cash advance, your goal is to pay it back before the interest compounds. Credit card payments are applied to your lowest-interest debt first — usually purchases — and your highest-interest debt last. This means if you have both a purchase balance and a cash advance balance, your payment goes toward the purchase first, leaving the cash advance to accrue interest.
To pay off a cash advance faster, contact your card issuer and ask if you can specify where your payment goes. Some issuers allow this; others do not. If yours does, direct your payment to the cash advance. If it does not, your only option is to pay more than the minimum so that after the purchase is covered, the extra goes to the cash advance.
The fastest way is to pay the entire cash advance balance in one lump sum as soon as you can. Even a few days of interest adds up. If you took out $300 and can pay it back within a week, you'll owe roughly $1.50 in interest. If you wait a month, you'll owe $6 to $7. The difference is small in dollars but compounds if you make this a habit.
What to do if you can't pay back a cash advance
If you've taken a cash advance and can't pay it back quickly, you have a few options. The first is to transfer the balance to a different card if you have one with a lower APR or a 0 percent introductory rate. Balance transfer cards often charge a 3 to 5 percent fee, but if your cash advance APR is 25 percent and you can transfer to a 0 percent card for 12 months, the fee pays for itself in a few months of interest saved.
The second option is to consolidate the debt into a personal loan at a lower rate. If your cash advance APR is 25 percent and you can get a personal loan at 15 percent, you'll save money even after paying a loan origination fee.
The third option is to stop using the card and focus on paying down the balance with whatever money you have available. Cut other expenses if you can, pick up extra work if possible, and put every dollar toward the cash advance. The longer you carry it, the more you'll pay in interest.
If you're struggling with multiple cash advances or high credit card debt, a nonprofit credit counselor can help you make a plan. The National Foundation for Credit Counseling (NFCC) offers free or low-cost counseling by phone or video, and can sometimes negotiate with your card issuer to lower your interest rate or waive fees.
Frequently Asked Questions
Is there a limit to how much cash I can withdraw?
Yes. Your card issuer sets a cash advance limit, which is often 20 to 30 percent of your total credit limit. You may also hit a daily ATM withdrawal limit, which varies by bank but is often $500 to $1,000 per day. Check your card's terms or call the issuer to find out your specific limits.
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it's a bad idea. You're borrowing at 25 percent interest to pay off debt at 18 percent interest, so you're losing money. If you're juggling multiple cards, a balance transfer or personal loan will cost you less.
Do I have to pay interest on a cash advance if I pay it back right away?
No grace period exists for cash advances — interest starts accruing the day you withdraw the cash. But if you pay it back within a few days, the interest charge will be small, usually $1 to $3. You will still owe the upfront cash advance fee.
What's the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another and usually has a lower fee and APR. A cash advance gives you physical cash and charges a higher fee and APR. If you need cash, a cash advance is your only option. If you're moving debt between cards, a balance transfer is cheaper.
Will taking a cash advance hurt my credit score?
Yes, temporarily. It raises your credit utilization ratio, which can lower your score by 10 to 50 points. The effect fades once you pay off the balance. Missing a payment on a cash advance will hurt your score much more and for much longer — up to seven years.