Yes, you can get cash from a credit card, but it costs more than a regular purchase
A cash advance is when you withdraw money directly from your credit card's available credit, either at an ATM, through a bank teller, or sometimes through a convenience check. The money hits your account within hours or days. But unlike a purchase, a cash advance starts charging interest when ready — there is no grace period — and the interest rate is usually 3 to 5 percentage points higher than your regular purchase rate. You also pay an upfront fee, typically 3 to 5 percent of the amount you withdraw.
The math adds up fast. If you take a $500 cash advance on a card with a 25 percent purchase rate and a 4 percent cash advance fee, you pay $20 upfront plus interest that begins accruing the same day. After 30 days, you owe roughly $30 in interest alone. That $500 becomes $550 before you have even paid it back.
Key Takeaways
- Cash advances charge interest from day one with no grace period, and the interest rate is typically 3 to 5 percentage points higher than your purchase rate.
- You pay an upfront fee of 3 to 5 percent of the amount withdrawn, charged when ready to your account.
- The cash advance portion of your balance is paid down last, after purchases and balance transfers, so interest compounds longer.
- A personal loan, payday loan alternative, or credit line from your bank usually costs less if you need cash urgently.
Where you can get a cash advance and what it costs
Most credit cards let you withdraw cash at any ATM that displays your card network's logo (Visa, Mastercard, American Express, Discover). You can also visit your card issuer's branch or call customer service to request a convenience check, which you can deposit or cash. Some cards allow cash advances through third-party services like Western Union or MoneyGram.
The fee structure is fixed by your card issuer and appears in your cardholder agreement. A typical cash advance fee is $5 or 5 percent of the amount withdrawn, whichever is greater. So a $100 withdrawal costs $5; a $500 withdrawal costs $25. The interest rate — called the cash advance APR — is separate from your purchase APR and is usually printed on your statement. If your purchase rate is 18 percent, your cash advance rate might be 23 percent.
The interest accrues daily on the full amount until you pay it off. Unlike a purchase, which may have a 21-day grace period before interest kicks in, a cash advance begins charging interest on day one.
How cash advances are paid back
When you make a payment to your credit card, the issuer applies it in a specific order set by law. Payments go first to the balance with the lowest interest rate (usually purchases), then to higher-rate balances. A cash advance, which carries the highest rate, is paid down last. This means your cash advance interest keeps compounding while you are paying off cheaper balances.
If you have a $1,000 purchase balance at 18 percent and a $500 cash advance at 25 percent, and you send in $200, that $200 goes entirely to the purchase. The cash advance sits untouched, accruing interest. You have to pay off the entire purchase before a single dollar of your $200 payment touches the cash advance.
This payment hierarchy is why cash advances are expensive even for short-term needs. A $500 cash advance held for three months can cost $30 to $40 in interest alone, plus the upfront fee.
When a cash advance makes sense (and when it does not)
A cash advance is rarely the cheapest way to get cash. It makes sense only in narrow situations: you need cash when ready, you have no other source, and you can pay it back within days or a week or two. An example might be a medical copay due today and your paycheck arriving Friday.
In almost every other scenario, a different source is cheaper. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no daily interest accrual — you pay a fixed monthly payment. A payday loan alternative through a credit union (often called a PAL loan) caps interest at 28 percent and is designed for short-term cash needs. Even a 0 percent balance transfer from another card, if you may have access to, costs only a 3 to 5 percent transfer fee and no interest for 6 to 21 months, depending on the offer.
Avoid a cash advance if you are already carrying a balance on the card. The cash advance will sit at the bottom of the payment queue, and you will pay interest on it for months while you clear other debt.
How a cash advance affects your credit score
A cash advance does not directly hurt your credit score the way a missed payment does. However, it can harm your score indirectly. The cash advance increases your card's balance, which raises your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 limit and take a $1,000 cash advance, your utilization jumps from 0 to 20 percent. Credit scoring models penalize high utilization, so your score may drop by 10 to 50 points depending on your overall profile.
The damage is temporary. Once you pay off the cash advance, your utilization drops and your score recovers. But while the balance sits, the higher utilization works against you.
Alternatives to a credit card cash advance
If you need cash and want to avoid the high cost of a cash advance, consider these options in order of cost:
- Personal loan from a bank or credit union: Fixed interest rate, fixed repayment term, no daily interest accrual. Rates range from 6 to 36 percent depending on your credit. Approval takes 1 to 3 business days.
- Payday loan alternative (PAL) from a credit union: Capped at 28 percent APR, designed for short-term needs, repayment terms of 1 to 6 months. You must be a member, usually for at least one month.
- Balance transfer to a 0 percent card: If you have good credit, you may may have access to for a card offering 0 percent APR for 6 to 21 months. You pay a one-time transfer fee (3 to 5 percent) but no interest during the promotional period.
- Borrowing from family or friends: No interest, no fees, but requires trust and a clear repayment agreement in writing.
- Employer paycheck advance: Some employers offer advances on future paychecks with no interest. Check with your HR or payroll department.
What to do if you have already taken a cash advance
If you have a cash advance balance, pay it off as quickly as possible. Every day it sits, interest accrues at a rate higher than your purchase balance. Make a payment plan: calculate how much you need to pay each week to clear it within 30 days, and stick to it.
If you cannot pay it off quickly, consider a balance transfer or personal loan to move the debt to a lower-rate product. A personal loan at 15 percent is cheaper than a cash advance at 25 percent, even after accounting for the loan origination fee.
Do not take another cash advance to pay off the first one. That compounds the problem and locks you into a cycle of high-rate debt.
Frequently Asked Questions
Is there a limit to how much I can withdraw as a cash advance?
Yes. Your card issuer sets a cash advance limit, which is often lower than your credit limit. A common limit is 20 to 30 percent of your credit limit, but it varies by card and issuer. You can find your cash advance limit in your cardholder agreement or by calling customer service.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is expensive. The cash advance fee and high interest rate make this a costly way to move debt. A balance transfer (moving the balance directly from one card to another) is cheaper because the fee is lower and you may may have access to for a 0 percent promotional rate.
What happens if I do not pay back a cash advance?
The balance stays on your card and interest keeps accruing. After 30 days of non-payment, the issuer reports it to the credit bureaus, and your credit score drops. After 180 days, the account may be charged off and sent to a collection agency. You can still pay it, but the damage to your credit lasts seven years.
Can I get a cash advance with a debit card?
No. Debit cards draw from money you already have in your bank account, so there is no credit to advance. You can withdraw cash from an ATM using your debit card, but that is not a cash advance — it is just accessing your own money.
Do all credit cards offer cash advances?
Most do, but not all. Some cards designed for people rebuilding credit or cards with very low limits may not offer cash advances. Check your cardholder agreement or call customer service to confirm whether your card allows them.