Can You Take Out Cash With a Credit Card? Here's What You Need to Know

Yes, you can withdraw cash using a credit card—but it's a specific transaction called a cash advance, and it works very differently from using your debit card at an ATM. Understanding how cash advances function, what they cost, and when they make sense is essential before you use one.

What Is a Cash Advance?

A cash advance is a short-term loan against your available credit. When you use your credit card to withdraw cash—whether at an ATM, through a bank teller, or via a peer-to-peer payment app—you're borrowing money directly from your card issuer. That borrowed amount is added to your credit card balance, just like a purchase would be, but with significantly different terms and costs.

This is distinct from a standard purchase. When you buy something with your credit card, you typically have a grace period before interest accrues. Cash advances almost always accrue interest immediately—meaning interest starts calculating the moment you complete the transaction, with no grace period.

How Cash Advances Work

The basic process:

1. You visit an ATM (using your credit card PIN), a bank branch, or an online payment service.
2. You request the cash amount.
3. The funds are deposited into your account or handed to you in cash.
4. That amount is added to your credit card balance.
5. Interest and fees begin accruing right away.

Key Costs Associated With Cash Advances

Cash advances come with multiple expenses that make them more expensive than standard purchases:

Cash advance fee: Most card issuers charge a percentage of the amount withdrawn—typically between 3% and 5%, though some may be higher or lower. There's often a minimum dollar amount (like $5) as well. This fee is charged immediately and added to your balance.

Interest rate: The APR (annual percentage rate) for cash advances is usually higher than your card's standard purchase APR. Some cards apply the same rate; others charge significantly more. Crucially, interest accrues immediately—there's no grace period like there typically is for purchases.

Other potential costs: If you withdraw cash from an ATM not operated by your card issuer's bank, you may also pay an ATM operator fee (set by the ATM owner), on top of your card's cash advance fee.

Variables That Affect Your Situation

Whether a cash advance makes sense depends on several factors unique to your circumstances:

When Cash Advances Make Sense (and When They Don't)

Cash advances are most reasonable when:

• You need cash urgently and have no other option.
• You can repay the full amount within days (minimizing interest accumulation).
• The total cost (fee + interest) is lower than alternatives available to you.
• You're facing a genuine emergency where the cost is worth the access to immediate funds.

Avoid cash advances when:

• You're already carrying a credit card balance—the additional interest will compound.
• You're borrowing to fund ongoing expenses rather than a one-time need.
• You have access to an ATM card, bank account, or lower-cost borrowing option.
• You can't repay the full amount quickly.

Smart Practices if You Do Take a Cash Advance

If you decide to proceed with a cash advance:

• Repay as quickly as possible. Every day the balance sits, interest accrues. Prioritize paying off the cash advance portion of your balance before making other payments.
• Check your card's terms first. Know your specific cash advance APR, fee percentage, and any limits on how much you can advance (many cards cap this at a percentage of your total credit limit).
• Budget for the total cost. Calculate the fee plus estimated interest so you know the true cost upfront.
• Avoid making it a habit. Repeated cash advances signal financial strain and can damage your credit over time.

The bottom line: cash advances are available, but they're an expensive way to access funds. Your decision should be based on your specific circumstances, the alternatives available to you, and whether you can afford the additional costs.