Yes, you can take money out of a credit card, but it is not the same as using it to buy something
When you take cash out using your credit card, you are using a feature called a cash advance. The card issuer lends you money directly, and you repay it like any other credit card balance. But cash advances cost more than regular purchases — they charge a separate fee upfront, a higher interest rate, and interest starts accruing when ready instead of after a grace period.
You can get a cash advance at an ATM using your credit card and PIN, at a bank teller's window, or through a cash advance check that some issuers mail to cardholders. The amount you can withdraw is limited by your card's cash advance limit, which is often lower than your overall credit limit.
Key Takeaways
- A cash advance charges an upfront fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, with interest starting when ready.
- You can withdraw cash at an ATM, a bank branch, or by using a cash advance check, but each method has different fees and limits.
- Your cash advance limit is separate from your credit limit and is often much lower — sometimes $500 or less even if your card limit is $5,000.
- The interest you pay on a cash advance is not covered by a grace period, so charges begin the day you withdraw the money.
- If you need cash, a personal loan or a debit card withdrawal from your own account costs far less than a credit card cash advance.
How much a cash advance actually costs you
A cash advance has three separate costs. First, there is an upfront fee, usually between 3 and 5 percent of the amount you withdraw. If you take out $500, you might pay $15 to $25 just to get the cash. Second, the interest rate on a cash advance is higher than the rate on purchases — often 5 to 10 percentage points higher. Third, interest starts accruing when ready. Unlike a purchase, which has a grace period (usually 21 to 25 days before interest kicks in), a cash advance begins charging interest the moment you withdraw it.
The combination of these three costs makes a cash advance expensive fast. A $500 cash advance at a 5 percent fee plus 25 percent interest costs you $25 upfront. If you pay it back in one month, you owe roughly $35 in fees and interest. If you carry it for three months, the interest alone could exceed $30.
Where you can withdraw cash and what each option costs
You have three main ways to get cash from a credit card, and the fees differ slightly by method.
ATM withdrawal: Insert your credit card and enter your PIN. You get cash when ready. The fee is usually the upfront cash advance fee (3 to 5 percent) plus any ATM operator fee if you use an out-of-network machine. Some banks charge an additional ATM fee on top of the card issuer's fee.
Bank teller: Walk into a bank branch and ask for a cash advance on your credit card. You will need your card and ID. The fee is the same upfront percentage, but you avoid ATM operator fees. This is often the cheapest method if your bank is nearby.
Cash advance checks: Some card issuers mail checks that you can deposit or cash. These checks work like a cash advance but may have a different fee structure — sometimes lower, sometimes higher. Read the terms on the check itself before you use it, because the fee and interest rate may differ from an ATM withdrawal.
Your cash advance limit is not your credit limit
Most credit cards set a separate, lower limit for cash advances. Your overall credit limit might be $5,000, but your cash advance limit could be $500 or $1,000. This limit is set by the card issuer and is usually disclosed in your card agreement or online account dashboard.
You can contact your card issuer to ask what your cash advance limit is. Some issuers will raise it if you request, but many will not. The limit exists partly to protect the issuer from risk — cash advances are riskier for them because they cannot be reversed like a disputed purchase can be.
Why interest starts when ready on a cash advance
Credit card purchases have a grace period — typically 21 to 25 days — during which you can pay the full balance without paying any interest. A cash advance does not have a grace period. Interest begins the day you withdraw the money, even if you pay it back a week later.
This is one of the biggest cost differences between a purchase and a cash advance. If you charge $500 to your card and pay it off in full before the due date, you pay zero interest. If you take a $500 cash advance and pay it off in full a week later, you still owe interest for that week.
Cheaper ways to get cash when you need it
Before you use a credit card cash advance, consider these alternatives. A personal loan from a bank or credit union usually has a lower interest rate than a cash advance and charges interest only on the amount you borrow, with no upfront fee. A payday loan is faster but often more expensive, so compare the total cost first. A line of credit from your bank may offer a lower rate than a cash advance. If you have a debit card linked to a checking or savings account, withdrawing from your own account costs nothing.
If you have family or friends who can lend you money, that is almost always cheaper than a cash advance. If you need the money for an emergency and have no other option, a cash advance is available when ready, but plan to pay it back as quickly as possible to minimize interest charges.
How to pay back a cash advance quickly
Once you have taken a cash advance, the interest clock is running. Your monthly credit card statement will show the cash advance as a separate line item from your regular purchases. When you make a payment, most card issuers explore it to the lowest-interest balance first (usually your purchases), which means your cash advance interest keeps growing.
To pay down a cash advance faster, contact your card issuer and ask if you can direct your payment specifically to the cash advance balance. Some issuers allow this; others do not. If yours does not, your best strategy is to pay more than the minimum due so that extra money goes toward the higher-interest cash advance balance. Treat a cash advance like a debt you need to eliminate, not a balance you can carry indefinitely.
Frequently Asked Questions
Can I take out a cash advance if I have a low credit limit?
Your cash advance limit is separate from your credit limit and is often much lower. Even with a $2,000 credit limit, your cash advance limit might be $300. Contact your card issuer to find out your specific cash advance limit — it is listed in your account or card agreement.
What happens if I take a cash advance and then lose my job?
A cash advance is a debt you owe to the card issuer, just like a purchase. If you cannot pay it back, it will accrue interest and may damage your credit score if you miss payments. Contact your card issuer as soon as you know you are in trouble — some offer hardship programs that lower your interest rate or pause payments temporarily.
Is a cash advance the same as a balance transfer?
No. A balance transfer moves debt from one card to another (usually at a lower rate for a set period). A cash advance gives you physical cash and charges a fee plus interest when ready. They are two different features with different costs.
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a bad idea. You are borrowing money at a high rate with an upfront fee just to pay another debt. You would be better off making a regular payment from your bank account or asking the card issuer about a hardship program if you cannot afford the payment.
Do all credit cards offer cash advances?
Most credit cards do, but not all. Some cards marketed for specific purposes (like travel rewards) may not offer cash advances, or may offer them only at a very high fee. Check your card agreement or contact your issuer to confirm whether your card has a cash advance feature.