Yes, you can take money out of a credit card, but it is not the same as using it to buy something
You can withdraw cash directly from your credit card at an ATM, through your bank, or by asking a cashier for cash back when you make a purchase. The money appears in your account the same day or next business day. But the card issuer charges you fees and interest that start right away — there is no grace period like there is for regular purchases. A cash withdrawal typically costs 3 to 5 percent of the amount you take out, plus a higher interest rate than your regular purchase rate.
The reason the cost is so high is that the card company sees a cash withdrawal as riskier than a purchase. When you buy something, the merchant guarantees the transaction. When you take cash, there is no may provide — you could spend it on anything. So the card treats it like a short-term loan with a premium price.
Key Takeaways
- Cash withdrawals from a credit card charge a fee (usually 3 to 5 percent) plus a higher interest rate than purchases, with interest starting when ready.
- You can withdraw cash at an ATM, through your bank's teller, or as cash back at a store, but the method does not change the cost.
- The interest rate for cash advances is often 5 to 10 percentage points higher than your regular purchase rate and varies by card and issuer.
- If you need cash, a personal loan, a line of credit, or a cash advance from your employer are usually cheaper than using your credit card.
The three ways to take cash from your credit card
ATM withdrawal is the most common method. You insert your card, enter your PIN, and withdraw cash up to your daily limit. Most card issuers set a daily limit between $500 and $1,000, though you can request a higher limit. The fee appears on your statement within a day or two.
Bank teller withdrawal works if your credit card is issued by a bank where you have an account. You go to the teller, show your card and ID, and ask for a cash advance. This method is slower than an ATM but sometimes has no fee if the bank is your own. Call ahead to confirm.
Cash back at a store lets you ask for cash when you swipe your card at checkout. You do not pay a separate fee for this method — the card issuer treats it as a purchase, not a cash advance. However, most stores limit cash back to $20 to $100 per transaction, so this only works if you need a small amount.
What the fees and interest actually cost you
A cash advance fee is charged the moment you withdraw the money. It is usually 3 to 5 percent of the amount, though some cards charge a flat fee like $10 instead. If you withdraw $500, expect to pay $15 to $25 in fees alone. That fee is added to your balance when ready.
The interest rate on a cash advance is separate from your purchase rate. If your card charges 18 percent APR on purchases, the cash advance rate might be 23 or 25 percent. Interest starts accruing the day you withdraw the money — there is no grace period. If you carry the balance for a month, you will owe roughly 2 percent of the amount in interest on top of the fee you already paid.
Here is a concrete example: you withdraw $500 at an ATM. The fee is $15 (3 percent). Your cash advance rate is 24 percent APR. After one month, you owe $515 in principal plus about $10 in interest, for a total of $525. If you pay the minimum and carry the balance for six months, the interest alone will exceed $30.
Why cash back at checkout is cheaper than an ATM
When you ask for cash back at a store, the card issuer does not charge a separate fee and does not explore the higher cash advance rate. Instead, the transaction is treated as a regular purchase. You pay your normal purchase APR, and interest does not start until after your grace period ends (usually 21 days). This makes cash back the cheapest way to get cash from your card.
The trade-off is that most retailers limit cash back to $20 to $100 per transaction. If you need more than that, you will have to make multiple transactions or use a different method. Some stores, like grocery chains, are more generous with cash back limits than others.
Cheaper ways to get cash when you need it
A personal loan from a bank or credit union usually has a lower interest rate than a credit card cash advance. Rates range from 6 to 36 percent depending on your credit score and the lender, but most people with decent credit will pay less than their card's cash advance rate. The loan is fixed — you know exactly how much you owe and when it is due — so there are no surprise fees.
A line of credit from your bank works like a credit card but usually charges lower interest. You draw money as you need it and pay interest only on what you use. If your bank offers one, ask about the rate and whether there are withdrawal fees.
A paycheck advance from your employer is free or very cheap if your company offers one. You borrow against your next paycheck and repay it automatically when you are paid. There is no interest and no credit check. Ask your HR or payroll department whether this is an option.
A credit union loan is often cheaper than a bank loan and faster to get. Credit unions typically charge lower rates and have more flexible terms. If you are a member, call and ask about a small personal loan or a line of credit.
What happens if you cannot pay back the cash advance
If you carry a cash advance balance, the interest compounds quickly. After three months, a $500 advance at 24 percent APR will cost you roughly $30 in interest alone. After six months, it will cost about $60. The longer you carry it, the more of your payment goes to interest instead of principal.
If you miss a payment, the card issuer will charge a late fee (usually $25 to $40) and may raise your interest rate to the penalty rate, which can be 29 percent or higher. Your credit score will also drop. If the balance stays unpaid for six months, the card issuer may close your account and send the debt to a collection agency.
If you are already struggling with credit card debt, taking a cash advance will make it worse. A better move is to contact a nonprofit credit counselor through the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association (FCA). They offer free or low-cost sessions to help you understand your options.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
A single cash advance does not directly hurt your score, but it increases your credit utilization — the amount of your available credit you are using. If you normally use 30 percent of your limit and a $500 advance pushes you to 50 percent, your score may drop a few points. The bigger hit comes if you miss a payment or carry the balance for months.
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You will pay the cash advance fee (3 to 5 percent) plus the higher interest rate, so you are paying more to move the debt around. A balance transfer card or a personal loan would be cheaper. A balance transfer card charges a one-time fee (usually 3 to 5 percent) but offers a low or 0 percent rate for 6 to 21 months.
What is my cash advance limit?
Your cash advance limit is usually 20 to 50 percent of your credit limit, but it varies by card and issuer. If your credit limit is $5,000, your cash advance limit might be $1,000 to $2,500. You can find this number in your card agreement or by calling the issuer's customer service line.
Will the cash advance show up on my credit report?
No, a single cash advance does not show up on your credit report as a separate item. However, if you carry the balance and miss payments, those missed payments will appear on your report and damage your credit score.
Can I withdraw cash from a credit card without a PIN?
At an ATM, you need a PIN. At your bank's teller window, you can withdraw cash with just your card and ID, though some banks require a PIN for security. Cash back at a store does not require a PIN — you just swipe or insert your card and sign the receipt.