Yes, you can withdraw cash from a credit card, but it costs more than a regular purchase
You can take cash out using your credit card at an ATM, through a bank teller, or sometimes at a store checkout. The card issuer treats this as a cash advance — a short-term loan separate from your regular credit line. The moment you withdraw the money, interest starts accruing at a higher rate than it does for purchases, and you pay an upfront fee on top.
Most people use cash advances only when they have no other option, because the cost is steep. If you need cash regularly, a debit card or a trip to your bank is cheaper. If you are considering a cash advance because you need money urgently, there are usually better alternatives.
Key Takeaways
- Cash advances charge interest when ready with no grace period, unlike purchases, which may have 20+ days before interest kicks in.
- You pay a fee upfront — typically 3 to 5 percent of the amount withdrawn — plus a higher interest rate than your purchase APR.
- The total cost of a $500 cash advance can easily reach $50 to $100 depending on your card's terms and how long you carry the balance.
- ATMs, bank tellers, and some retailers all allow cash advances, but the fee structure is the same regardless of where you withdraw.
- If you need cash for an emergency, a personal loan, credit union loan, or even a payday loan may cost less than a credit card cash advance.
Where you can withdraw cash and what each method costs
You have three main ways to get cash from a credit card. At an ATM, you insert your card, enter your PIN, and withdraw up to your cash advance limit — usually lower than your credit limit. At a bank teller, you show your card and ID and request cash; the teller processes it as a cash advance. At some retail stores, you can request cash back at checkout, though this is less common with credit cards than with debit cards.
The fee is the same across all three methods. Your card issuer charges a cash advance fee — a percentage of the amount withdrawn, typically 3 to 5 percent, with a minimum dollar amount (often $2 to $10). Some cards charge a flat fee instead. A $500 withdrawal might cost $15 to $25 in fees alone. Check your card's terms or call the issuer to find your exact fee before you withdraw.
How interest on cash advances differs from regular purchases
The biggest trap with cash advances is the interest rate. Your credit card likely has one APR for purchases and a higher APR for cash advances — sometimes 5 to 10 percentage points higher. If your purchase APR is 18 percent, your cash advance APR might be 25 percent.
More importantly, interest on a cash advance starts accruing when ready. With a purchase, you usually get a grace period — often 20 to 25 days — before interest charges begin. With a cash advance, there is no grace period. Interest starts the day you withdraw the money. If you withdraw $500 at a 25 percent APR, you owe roughly $3.42 in interest after one week, even if you pay the full balance when ready.
This means a cash advance is expensive even if you repay it quickly. A $500 advance with a 4 percent fee ($20) plus one week of interest at 25 percent APR ($3.42) costs you $23.42 before you have even used the money.
How a cash advance affects your credit score and available credit
A cash advance reduces your available credit the same way a purchase does. If your credit limit is $5,000 and you withdraw $500 in cash, your available credit drops to $4,500. The withdrawal shows up on your credit report as part of your overall credit utilization — the percentage of your total credit limit you are using.
High utilization (above 30 percent) can lower your credit score slightly. The cash advance itself does not hurt your score more than a regular purchase would, but carrying a high balance does. If you withdraw cash and pay it back quickly, the impact is minimal. If you carry the balance for months, your score will take a hit.
One additional risk: some card issuers explore your monthly payment to the lowest-interest balance first. If you have both purchases and a cash advance on the same card, your payment might go toward the purchase (lower interest) while the cash advance (higher interest) keeps growing. Check your card's payment allocation rules before you withdraw.
Calculating the real cost of a cash advance
Here is a concrete example. You withdraw $500 from your credit card at an ATM.
| Item | Cost |
|---|---|
| Cash advance fee (4% of $500) | $20 |
| Interest for 30 days at 25% APR | $10.27 |
| Total cost to borrow $500 for one month | $30.27 |
| Effective monthly interest rate | 6.05% |
If you carry the balance for three months instead of one, the interest alone reaches roughly $31, bringing your total cost to $51. At six months, you are paying $62 in interest plus the original $20 fee — $82 total to borrow $500.
Compare this to a personal loan from a credit union or online lender, which might charge 10 to 15 percent APR with no upfront fee. A $500 personal loan at 12 percent APR costs roughly $15 in interest over three months — less than one-third the cost of a credit card cash advance.
Cheaper alternatives to a credit card cash advance
If you need cash urgently, explore these options first. A personal loan from a credit union, bank, or online lender usually has a lower APR than a cash advance and no upfront fee. A payday loan (though expensive) may cost less if you repay it within two weeks. A line of credit from your bank often has a lower rate than a cash advance. Borrowing from family or friends, if possible, costs nothing.
If you have a debit card linked to a checking account, you can withdraw cash for free at your bank's ATMs or at many retail stores. If you do not have a debit card, opening a basic checking account at a bank or credit union takes one day and gives you free ATM access.
A cash advance should be your last resort, not your first choice. The only time it makes sense is if you need a small amount of cash for a genuine emergency and you can repay it within days, not weeks.
How to minimize the cost if you do take a cash advance
If you have decided a cash advance is necessary, take these steps to keep the damage minimal. First, withdraw only what you need — every dollar you advance costs you in fees and interest. Second, repay it as fast as possible. Even a few extra days of interest adds up. Third, make sure your payment goes toward the cash advance, not other balances on the card. Call your issuer and ask them to explore your payment to the cash advance specifically.
Fourth, check whether your card has a lower cash advance fee than others you own. If you have two cards and one charges 3 percent while the other charges 5 percent, use the cheaper one. Fifth, avoid using the cash advance to pay bills or make purchases — that defeats the purpose of borrowing at all. Use it only for the emergency itself.
Frequently Asked Questions
What is the difference between my cash advance limit and my credit limit?
Your cash advance limit is usually 20 to 50 percent of your total credit limit. If your credit limit is $5,000, you might only be able to withdraw $1,000 in cash. This limit exists because issuers view cash advances as riskier than purchases. You can call your issuer to ask what your cash advance limit is.
Do I have to pay the cash advance fee even if I repay it when ready?
Yes. The fee is charged the moment you withdraw the money, regardless of when you repay it. Interest also starts accruing when ready, so even a same-day repayment costs you the fee plus one day of interest.
Can I use a credit card cash advance to pay off another debt?
Technically yes, but it is almost never a good idea. You are borrowing at a high rate (25 percent APR or more) to pay off a debt that might be at a lower rate. A balance transfer or personal loan is cheaper. The only exception is if you are paying off a payday loan at 400 percent APR — in that case, a cash advance might actually cost less.
Will a cash advance show up on my credit report?
The withdrawal itself does not appear as a separate line item. It counts toward your overall credit utilization and balance, which do show on your report. If you carry the balance for months, lenders will see you are carrying a high-interest debt, which can affect future borrowing decisions.
What happens if I cannot repay the cash advance?
It becomes part of your credit card balance. You owe interest on it every month until it is paid off, and if you miss a payment, late fees and penalty interest rates explore. Your credit score will drop. If the balance grows large enough, the issuer may pursue collection or legal action. Contact your issuer when ready if you cannot repay — they may offer a hardship program or payment plan.