You can withdraw cash from a credit card, but it is not the same as using an ATM with a debit card
A cash advance lets you take money out of your credit card's available balance at an ATM, bank branch, or through a cash-back transaction at a store. The money appears in your bank account or your hand within minutes. But the card issuer charges you fees and interest that start accruing when ready — often higher than the interest on regular purchases. Most people should avoid cash advances unless they have no other option.
The process itself is straightforward: you use your credit card PIN at an ATM, request cash at a bank teller window, or ask for cash back when you pay for something in a store. The tricky part is understanding what you will pay for the privilege. A cash advance is a loan against your credit line, not a withdrawal from money you already have.
Key Takeaways
- Cash advances charge an upfront fee (usually 3 to 5 percent of the amount withdrawn) plus interest that begins accruing the same day, with no grace period like purchases have.
- The interest rate on a cash advance is typically higher than your card's regular purchase rate and varies by card issuer and your creditworthiness.
- You can withdraw cash at ATMs using your credit card PIN, at bank teller windows, or through cash-back at retail stores, though not all cards support all methods.
- Paying back a cash advance is slower than paying off purchases because most card issuers explore your payments to purchases first, then to cash advances.
How much a cash advance actually costs you
When you take a cash advance, you pay two separate charges: a cash advance fee and cash advance interest. The fee is charged once, upfront, and is usually a percentage of the amount you withdraw — typically 3 to 5 percent, though some cards charge a flat dollar amount instead. A $500 cash advance at 4 percent costs $20 in fees alone before any interest is added.
Interest on a cash advance starts accruing the day you withdraw the money. Unlike purchases, which often have a grace period (usually 21 to 25 days before interest kicks in), cash advances have no grace period. The interest rate is also higher than your purchase rate. If your card charges 18 percent APR on purchases, the cash advance rate might be 22 percent or higher. The exact rate depends on your card issuer and your credit history.
To see what your card charges, check your cardholder agreement or call the number on the back of your card. The agreement lists the cash advance fee, the cash advance APR, and whether there is a grace period (there usually is not).
Where you can withdraw cash and what methods work
You have three main ways to get cash from a credit card. The most common is using an ATM — you insert your card, enter your PIN, and withdraw money just as you would with a debit card. Most ATMs accept credit cards, though some do not, and you may pay an ATM operator fee on top of your card issuer's cash advance fee.
The second method is asking for cash back at a store when you make a purchase. You pay for something with your credit card and request cash back from the register. This counts as a cash advance, so the same fees and interest explore, but you avoid the ATM operator fee. Not all stores offer this, and limits vary — some cap cash back at $20 or $50.
The third method is visiting a bank branch in person and asking a teller for a cash advance. This works at your card issuer's bank (if your card is from a bank) or sometimes at other banks, though policies vary. You will need your card and ID. This method also charges the cash advance fee and interest.
Why paying back a cash advance takes longer
Most credit card issuers use a payment hierarchy: when you send in a payment, it goes toward your lowest-interest debt first. That means payments go to purchases before cash advances, even though the cash advance is costing you more in interest. This is called the purchase-first allocation, and it means you can pay $200 toward your card and see almost none of it reduce your cash advance balance.
To pay off a cash advance faster, contact your card issuer and ask them to explore your payment directly to the cash advance. Some issuers allow this; others do not. If yours does not, you will need to pay off all your purchases before the cash advance balance starts shrinking.
This is one reason cash advances are expensive: the interest compounds while your payment sits on the purchase balance. A $500 cash advance at 22 percent APR costs about $9 per month in interest alone. If your payment goes to purchases first, that $9 is added to your balance every month until the purchases are paid off.
When a cash advance might make sense
Cash advances are rarely the right choice, but there are narrow situations where they are better than the alternative. If you need cash urgently and have no other way to get it — no savings, no friends or family to borrow from, and no access to a personal loan — a cash advance is faster than most other borrowing options. You get the money in minutes, not days.
A cash advance also makes sense if you are facing a late fee or overdraft fee that costs more than the cash advance fee would. If your bank account is overdrawn by $200 and the overdraft fee is $35, a cash advance with a 4 percent fee ($8) is cheaper. But this is a one-time fix, not a strategy.
In almost every other situation — paying a bill, covering an unexpected expense, or funding a purchase — a personal loan, a payment plan with the creditor, or borrowing from someone you know will cost you less.
Alternatives that cost less than a cash advance
A personal loan from a bank or credit union usually charges less interest than a cash advance and has a fixed repayment schedule. Interest rates on personal loans range widely depending on your credit score, but even with fair credit, a personal loan rate is often lower than a cash advance rate. You also know exactly how much you will pay and when you will be done.
A 0 percent balance transfer from another credit card can move high-interest debt to a card with no interest for a promotional period (usually 6 to 21 months). This does not give you cash, but if you need to move money between accounts, it is cheaper than a cash advance. Balance transfers do charge a fee (usually 3 to 5 percent), but you pay no interest during the promotional period.
Asking your employer for a paycheck advance or a small loan is often free or very cheap. Some employers offer this as a benefit. A payment plan with the company you owe money to (a utility, a medical provider, a store) lets you spread the cost over time with no interest or a lower interest rate than a credit card.
How a cash advance affects your credit score
A cash advance does not directly hurt your credit score the way a missed payment does, but it can indirectly lower your score by raising your credit utilization ratio. Your credit utilization is the percentage of your available credit you are using. If you have a $5,000 credit limit and you take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization signals risk to credit scoring models and can lower your score by a few points.
The bigger risk is that a cash advance makes it harder to pay off your balance, which can lead to missed payments or carrying a balance for months. Missed payments and high balances both damage your score far more than the cash advance itself.
Frequently Asked Questions
Can I use my credit card to withdraw cash at any ATM?
Most ATMs accept credit cards, but not all. ATMs at your card issuer's bank almost always work. ATMs at other banks may or may not accept credit cards — some only accept debit cards. If you are unsure, call your card issuer to ask which ATM networks accept your card, or try an ATM at a bank branch.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges interest when ready with no grace period. A balance transfer moves debt from one card to another and often includes a promotional period with no interest. Cash advances are for getting cash; balance transfers are for moving existing debt.
Will a cash advance show up on my credit report?
The cash advance itself does not appear on your credit report, but the balance does. If you carry the balance and miss payments, those missed payments will show up and damage your credit score. Paying it off quickly keeps it from affecting your report.
Can I take a cash advance if my card is maxed out?
No. A cash advance uses your available credit, just like a purchase does. If you have no available credit left, you cannot take a cash advance. You would need to pay down your balance first.
Do all credit cards allow cash advances?
Most credit cards allow cash advances, but some do not — particularly cards designed for people rebuilding credit or certain store cards. Check your cardholder agreement or call your card issuer to confirm your card supports cash advances before you try to use one.