Yes, you can take cash out of a credit card, but it costs more than a purchase
You can withdraw cash from a credit card at an ATM using your PIN, or ask a cashier at a bank or store to give you cash back. The money comes from your available credit, not from a separate account. But a cash advance — that is what this withdrawal is called — charges you a fee right away, usually 3 to 5 percent of the amount you take out. It also starts charging interest when ready, with no grace period like a regular purchase gets. On a $300 cash advance, you might pay $9 to $15 just to get the money, plus interest from day one.
Because of these costs, taking cash from a credit card should be a last resort, not a convenience. If you need cash and have other options — a debit card, a personal loan, borrowing from family, or a payday loan from a credit union — those are usually cheaper. But if you are in a genuine bind and have available credit, knowing how it works can help you decide whether it makes sense.
Key Takeaways
- Cash advances charge a fee (typically 3 to 5 percent) plus interest that starts accruing when ready, making them much more expensive than regular credit card purchases.
- You can get a cash advance at an ATM with your PIN, at a bank teller window, or sometimes at a store checkout, depending on your card issuer.
- Your credit card company sets a separate cash advance limit, which may be lower than your overall credit limit.
- The interest rate on cash advances is usually higher than the rate on purchases, and there is no grace period to pay it back interest-free.
- If you need cash regularly, a debit card, credit union loan, or line of credit is almost always cheaper than repeated cash advances.
How the cash advance fee and interest work
When you take a cash advance, your card issuer charges you two separate costs. The first is an upfront cash advance fee, which is a percentage of the amount you withdraw. Most cards charge between 3 and 5 percent, though some charge a flat dollar amount instead (like $10 minimum). A $500 cash advance at 4 percent costs you $20 before you even leave the ATM.
The second cost is interest, which starts the moment you withdraw the cash. Unlike a purchase, which usually has a grace period of 21 to 25 days before interest kicks in, a cash advance begins accruing interest when ready. The interest rate on cash advances is also typically higher than your regular purchase rate — sometimes 2 to 3 percentage points higher. If your purchase APR is 18 percent, your cash advance APR might be 21 percent. Over time, this adds up fast.
To see the real cost, imagine you take a $500 cash advance at a 4 percent fee and 21 percent APR. You pay $20 upfront. If you pay back $100 per month, you will pay roughly $65 in interest over five months. Your total cost for that $500 is about $85 — a 17 percent premium just to access your own credit.
Where you can get cash from your credit card
You have several options for withdrawing cash. The most common is an ATM — you insert your card, enter your PIN, and withdraw cash just as you would from a bank account. Most ATMs accept credit cards, though some charge an additional ATM operator fee on top of your card issuer's cash advance fee. That fee is usually $2 to $3.
You can also visit a bank branch where your card is issued and ask a teller for a cash advance. This avoids the ATM operator fee, but you will still pay your card issuer's cash advance fee and interest. Some banks require you to show your card and ID; others may ask security questions.
A third option is cash back at a store. Some retailers allow you to request cash back when you make a purchase with your credit card. However, not all stores offer this, and some card issuers do not allow it. Call your card issuer or check your cardholder agreement to confirm whether your card supports this option.
Your cash advance limit is separate from your credit limit
Your credit card company sets a cash advance limit that is different from your overall credit limit. This limit is usually lower — often 20 to 50 percent of your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $1,500. You cannot exceed this amount, even if you have available credit remaining.
You can find your cash advance limit in your cardholder agreement, on your online account dashboard, or by calling your card issuer. If you need to increase it, you can request a higher limit, though the issuer may deny the request or require a credit check. In most cases, it is not worth the effort — if you are considering a cash advance, you probably should not be increasing your access to one.
Why cash advances are more expensive than alternatives
A cash advance is almost never the cheapest way to get cash. Compare it to other options. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee, and interest does not start until you receive the money. A credit union payday loan (if you are a member) usually costs $15 to $20 per $100 borrowed, which sounds high but is often cheaper than a cash advance if you pay it back within two weeks. Even a payday loan from a storefront lender, which is expensive, may cost less than a cash advance if you repay it quickly.
If you have a debit card, you can withdraw cash from your own account for free (except for out-of-network ATM fees). If you have family or friends who can lend you money, that is free. If you have a line of credit or home equity line of credit (HELOC), the interest rate is usually much lower than a credit card cash advance.
The only scenario where a cash advance might make sense is if you need a small amount of cash for a very short time and have no other option. Even then, pay it back as fast as you can to minimize interest.
How a cash advance affects your credit score
Taking a cash advance does not directly hurt your credit score, but it can indirectly. When you withdraw cash, your available credit decreases, which raises your credit utilization ratio — the percentage of your total credit limit you are using. If your utilization jumps from 30 percent to 60 percent, your score may drop a few points. The higher your utilization, the bigger the impact.
The real damage comes if you cannot pay back the cash advance on time. Late payments and high balances both hurt your score. If you carry the cash advance balance for months, your score will suffer more than if you had straightforward made a regular purchase and paid it off.
Steps to take if you need cash urgently
If you are in a situation where you need cash right now, take these steps before you resort to a cash advance. First, check your other accounts — do you have a debit card, a savings account, or access to cash from an employer advance? Second, ask family or friends if they can lend you money, even for a few days. Third, contact your bank or credit union and ask about a personal loan or line of credit; many can fund these within 24 hours.
If none of those work and you have already decided a cash advance is necessary, withdraw only what you need, not your full cash advance limit. The less you borrow, the less you pay in fees and interest. Then pay it back as fast as possible — ideally within a week or two. Every day you carry the balance, interest is accruing at a high rate.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
Not when ready, but it can lower your score if it raises your credit utilization ratio significantly. The bigger risk is if you cannot pay it back on time — late payments and high balances both damage your score more than the cash advance itself.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You will pay the cash advance fee and high interest rate on top of the balance you are moving, making your debt more expensive, not less. A balance transfer card or personal loan is a better option if you are trying to consolidate debt.
What happens if I cannot pay back the cash advance?
The balance stays on your credit card and interest keeps accruing. If you miss payments, your card issuer will charge late fees and report the missed payment to credit bureaus, damaging your score. Eventually, the account may go to collections.
Is there a way to avoid the cash advance fee?
No — the fee is built into the cash advance product and applies every time you withdraw cash. The only way to avoid it is to not take a cash advance and use a debit card, personal loan, or other source of cash instead.
Can I take a cash advance on a secured credit card?
Yes, most secured cards allow cash advances, though the limits are usually very low. The fees and interest rates are the same as a regular credit card, so the same caution applies.