Yes, you can take cash out from a credit card, but it costs more than a purchase and starts charging interest when ready
Most credit cards let you withdraw cash at an ATM or from a bank teller using your card's PIN. This is called a cash advance. The money comes from your credit limit, just like a purchase does, but the fees and interest rates are steeper. You pay an upfront fee (usually 3 to 5 percent of the amount withdrawn), a higher interest rate than you pay on purchases, and interest begins accruing the moment you withdraw the cash — there is no grace period like there is for regular purchases.
The practical result: a $300 cash advance can cost you $9 to $15 just to take it out, plus interest starting when ready. If you carry the balance for a month, you could owe $20 or more in total fees and interest. For this reason, cash advances are expensive ways to get cash and should be a last resort, not a routine way to access money.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent, a separate higher interest rate, and interest from day one with no grace period.
- You can withdraw cash at ATMs using your card's PIN, or ask a bank teller to give you cash over the counter.
- The interest rate on a cash advance is typically 5 to 10 percentage points higher than your purchase rate and varies by card and issuer.
- Cheaper alternatives include using a debit card, borrowing from a friend, or asking your bank for a short-term personal loan.
How to take a cash advance from your credit card
The mechanics are straightforward. Visit an ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover), insert your card, enter your PIN, and select the cash withdrawal option. The ATM will ask how much you want to withdraw — you can take out up to your cash advance limit, which is usually lower than your total credit limit. The cash comes out when ready, and the transaction appears on your statement within a day or two.
Alternatively, you can go to a bank branch (your card issuer's bank or another bank) and ask a teller for a cash advance. Bring your card and ID. The teller will process the transaction and hand you cash. This method is slower than an ATM but may be useful if you need a large amount or prefer not to use a machine.
Your card issuer sets a separate cash advance limit, which is often much lower than your credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $1,500. You can find this limit in your cardholder agreement or by calling the number on the back of your card.
What fees and interest rates you will pay
Every cash advance carries an upfront fee, called a cash advance fee. This is typically 3 to 5 percent of the amount withdrawn, though some cards charge a flat fee (like $10) if that is higher. On a $300 withdrawal, a 5 percent fee costs $15. On a $1,000 withdrawal, it costs $50.
The interest rate on a cash advance is separate from your purchase rate and is almost always higher. If your purchase APR is 18 percent, your cash advance APR might be 24 or 28 percent. This rate varies by card issuer and your creditworthiness — there is no standard rate across the industry.
Unlike purchases, which have a grace period (usually 21 to 25 days before interest starts), cash advances begin accruing interest the moment you withdraw the money. If you withdraw $300 on January 1 and pay it back on January 31, you owe interest for the full 30 days, even if you pay in full. There is no way to avoid this interest charge.
The total cost adds up quickly. A $500 cash advance with a 5 percent fee ($25) and a 25 percent APR costs you $25 upfront plus roughly $10 in interest if you pay it back in one month. Over three months, the interest alone could exceed $35.
Why cash advances are more expensive than other borrowing
Credit card companies charge more for cash advances because they see them as riskier. When you make a purchase, the merchant is responsible for some of the risk — they have an incentive to deliver what you paid for. With a cash advance, there is no merchant and no collateral. The card issuer is lending you unsecured cash, which they price accordingly.
The combination of an upfront fee, a higher interest rate, and when ready interest accrual makes cash advances one of the most expensive ways to borrow money. A personal loan from a bank or credit union typically charges 8 to 15 percent APR with no upfront fee. A payday loan is predatory but at least transparent about its cost. A cash advance hides its true cost across three separate charges.
For this reason, financial advisors recommend treating cash advances as a last resort — something you use only when you have no other option and need cash urgently.
Cheaper ways to get cash when you need it
If you need cash, explore these options before using a credit card cash advance. A debit card withdrawal from your own bank account costs nothing and is when ready. If you do not have a debit card, you can visit your bank and withdraw cash from your checking or savings account for free.
A personal loan from a bank, credit union, or online lender typically charges 8 to 15 percent APR with no upfront fee and a fixed repayment schedule. The interest is lower than a cash advance, and you know exactly what you will owe each month. Many credit unions offer small personal loans to members at rates below 10 percent.
If you have a friend or family member who can lend you money, borrowing from them is free and keeps the money in your circle. A written agreement (even informal) protects both of you and makes repayment clear.
Some employers offer paycheck advances or emergency loans to employees. Ask your HR department whether this is an option. Some offer it free or at a low cost.
If you are in a true emergency and have no other options, a small personal loan from a credit union or online lender is almost always cheaper than a cash advance.
How a cash advance affects your credit score
A cash advance itself does not directly damage your credit score. The transaction appears on your credit report as a balance on your credit card, just like a purchase does. What matters is whether you pay it back on time and how much of your credit limit you are using.
If a cash advance pushes your total credit card balance higher, your credit utilization ratio — the percentage of your available credit you are using — increases. High utilization (above 30 percent) can lower your score slightly. If you normally use 20 percent of your limit and a $500 cash advance pushes you to 40 percent, your score may dip a few points.
If you miss a payment on the cash advance, that missed payment will be reported to the credit bureaus and will damage your score significantly. This is the real risk: not the cash advance itself, but the difficulty of paying it back quickly because of the high interest rate.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You would pay a 3 to 5 percent fee to move the balance, then pay a higher interest rate on the cash advance. A balance transfer card (which offers 0 percent APR for 6 to 21 months) or a personal loan is far cheaper. If you are trying to consolidate debt, those are better tools.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you cash at an ATM or bank and charges a high fee and interest rate. A balance transfer moves debt from one card to another and usually charges a lower upfront fee (2 to 3 percent) with a promotional 0 percent APR period. Balance transfers are for moving existing debt; cash advances are for getting cash.
Can I get a cash advance from a credit card I do not have yet?
No. You must have the physical card or access to it through a mobile wallet. You cannot request a cash advance online or by phone without the card present. Some issuers allow cash advances through their mobile app if you have set it up, but you still need an active card account.
Will my bank charge me a fee for a cash advance at their ATM?
Your card issuer will charge the cash advance fee. Your bank may also charge an ATM fee if you use an out-of-network machine (typically $2 to $3). If you use your card issuer's own ATM or a bank branch, there is usually no additional ATM fee, but the cash advance fee from your card issuer still applies.
How long does it take to pay off a cash advance?
That depends on your payment. If you pay the full amount when ready, you owe only the upfront fee and one day of interest. If you make minimum payments, a $500 cash advance at 25 percent APR could take 18 to 24 months to pay off, and you would pay $150 or more in interest alone. The longer you carry it, the more it costs.