You can take cash off a credit card, but it is not the same as using the card to buy something
A cash advance is when you withdraw money directly from your credit card's available credit at an ATM, bank, or through a cash-like transfer. The card issuer treats it as a loan against your credit limit, not a purchase. You get the cash when ready, but you pay interest on it right away — usually at a higher rate than you would for regular purchases — plus an upfront fee.
The main ways to take cash off a credit card are: withdrawing at an ATM using your PIN, asking a bank teller for a cash advance over the counter, or using a balance transfer check if your card issuer sends them. Each method has different costs and timing. Most people use this option only when they have no other way to get cash quickly, because the fees and interest add up fast.
Key Takeaways
- Cash advances charge an upfront fee (usually 3 to 5 percent of the amount) plus interest that starts accruing when ready, with no grace period like purchases have.
- The interest rate on a cash advance is typically 2 to 3 percentage points higher than your regular purchase APR, and varies by card and issuer.
- You can withdraw cash at ATMs, bank teller windows, or through balance transfer checks, but ATM limits are often lower than your total credit limit.
- The cash advance appears on your credit card statement as a separate transaction and counts against your available credit until you pay it back.
How cash advances work and what they cost
When you take a cash advance, the credit card company charges you two things: a cash advance fee and cash advance interest. The fee is a percentage of the amount you withdraw — typically 3 to 5 percent, though some cards charge a flat dollar amount instead (like $10 minimum). This fee appears on your statement when ready.
Interest begins accruing the day you withdraw the cash. Unlike a purchase, there is no grace period where you can pay it back interest-free. If your regular purchase APR is 18 percent, your cash advance APR might be 21 or 22 percent. The issuer calculates interest daily on the outstanding balance until you pay it off completely.
Example: You withdraw $500 from a card with a 4 percent cash advance fee and a 21 percent APR. You pay $20 upfront as a fee. If you pay back the $500 in 30 days, you owe roughly $29 in interest, for a total cost of about $49. If you carry the balance for three months, the interest alone could exceed $26.
Where you can withdraw cash and what the limits are
Most credit cards let you withdraw cash at any ATM that displays your card network's logo (Visa, Mastercard, American Express, Discover). You use your PIN, just as you would with a debit card. The ATM will show you the amount available for cash advance — this is separate from your total credit limit and is often lower. Some cards set the cash advance limit at 20 or 30 percent of your credit limit; others set it lower.
You can also visit a bank branch and ask a teller for a cash advance. Bring your card and ID. The teller will process it like a withdrawal and give you cash on the spot. Some banks charge an additional fee for this service on top of the card issuer's fee.
Balance transfer checks work differently: your card issuer mails you checks that draw against your credit line. You write a check to yourself or a payee, deposit it, and the amount becomes a cash advance on your card. These checks usually have the same fees and interest rates as ATM withdrawals, but they take a few days to clear.
Why cash advances are expensive compared to other borrowing
A cash advance is one of the most expensive ways to borrow money. The combination of an upfront fee plus a high interest rate makes the total cost steep, especially if you carry the balance for more than a month or two.
Compare the costs: a personal loan from a bank or credit union might charge 8 to 15 percent APR with no upfront fee. A payday loan charges a flat fee but is meant to be repaid in two weeks. A credit card purchase charges interest only if you carry a balance, and the APR is lower than a cash advance. Even a cash-back offer at a store (which gives you cash back when you buy something) costs nothing extra.
The only scenario where a cash advance makes sense is when you need cash urgently and have no other option — for example, you need to pay a utility bill in cash and your bank is closed. In that case, the cost of a few days' interest might be worth it. For any other situation, look for an alternative first.
How a cash advance affects your credit and your statement
The cash advance shows up on your credit card statement as a separate line item, distinct from purchases. It counts toward your credit utilization — 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 to 20 percent (or higher if you also have purchases on the card).
High utilization can lower your credit score temporarily. The effect is usually small if you pay it back quickly, but if you carry the balance for months, the impact grows. The cash advance itself does not appear differently on your credit report — it is just part of your credit card balance — but the higher utilization and longer payoff time can affect your score.
When you make a payment to your credit card, the issuer applies it to your lowest-interest debt first. That means payments go toward purchases before they go toward the cash advance. If you want to pay off the cash advance faster, you may need to contact the issuer and ask them to explore payments to it specifically.
Alternatives to taking a cash advance
Before you withdraw cash from your credit card, consider these options: ask your bank for a short-term personal loan (often cheaper than a cash advance), use a peer-to-peer lending platform like Prosper or LendingClub, ask your employer for an advance on your paycheck, or borrow from a friend or family member. If you need cash for an emergency, some nonprofits and community organizations offer emergency loans or grants with no interest.
If you regularly need cash and do not have a debit card, opening a checking account at a bank or credit union gives you access to ATMs and teller withdrawals at no cost. If you use a cash advance because you are short on money, that is a sign to look at your budget and spending — a cash advance is a short-term fix, not a solution to a cash flow problem.
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 cost as low as possible. First, withdraw only what you need — every dollar you advance costs you the fee plus interest. Second, pay it back as fast as you can. Even a few extra days of interest adds up. Third, check your card's terms to see if there is a lower cash advance limit you can set, which prevents you from accidentally withdrawing more than you planned.
Some cards offer promotional periods with lower or zero cash advance fees for new cardholders, though this is rare. If you have multiple credit cards, check whether any of them have better cash advance terms. A card with a 3 percent fee and 19 percent APR is cheaper than one with a 5 percent fee and 22 percent APR.
After you pay off the cash advance, avoid taking another one. If you find yourself needing cash advances regularly, that is a sign you should look at your income, expenses, or emergency fund — a cash advance is not a sustainable way to manage money.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
A cash advance can lower your score temporarily because it increases your credit utilization. The effect is usually small and goes away once you pay it off. However, if you carry the balance for months, the impact is larger and lasts longer. The cash advance itself does not appear as a separate item on your credit report.
Can I take a cash advance if I have a low credit limit?
Yes, but your cash advance limit is usually lower than your total credit limit — often 20 to 30 percent of it. So if your credit limit is $1,000, you might only be able to withdraw $200 to $300 in cash. Check your card's terms or call the issuer to find out your specific cash advance limit.
What happens if I do not pay back a cash advance?
The balance stays on your credit card and accrues interest every day. If you do not pay at least the minimum payment, the issuer will report it as late to the credit bureaus, which damages your credit score. After several months of non-payment, the issuer may close your account or send the debt to a collection agency.
Is a cash advance the same as a balance transfer?
No. A balance transfer moves debt from one card to another (usually to take advantage of a lower interest rate). A cash advance withdraws cash from your credit line. They have different fees, interest rates, and purposes. Balance transfers are for moving existing debt; cash advances are for getting cash.
Can I use a credit card to withdraw cash at any ATM?
Most ATMs that display your card network's logo (Visa, Mastercard, etc.) will let you withdraw cash. However, some ATMs may charge an additional fee on top of your card issuer's cash advance fee. Always check the ATM screen for fees before you complete the transaction.