Yes, you can withdraw cash with a credit card, but it costs more than a regular purchase
Most credit cards let you take cash out of an ATM or ask a bank teller for cash back. The card issuer treats this as a cash advance — a short-term loan separate from your regular credit line. You'll pay a fee upfront (usually 3 to 5 percent of the amount), and the interest rate on that cash is almost always higher than the rate on purchases. Interest starts accruing when ready, with no grace period like you get on regular charges.
The mechanics are straightforward: insert your card at an ATM, enter your PIN, and withdraw. At a bank teller, you hand over your card and ID and ask for cash. The money hits your account when ready. But the cost structure is what matters — cash advances are expensive, and most people should explore other options first.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent upfront, plus interest that starts when ready with no grace period.
- The interest rate on cash advances is typically 5 to 10 percentage points higher than the rate on regular purchases.
- Your credit card issuer sets a cash advance limit, which may be lower than your overall credit limit.
- ATMs and bank tellers are the two ways to get cash, but some ATMs charge an additional operator fee on top of your card issuer's fee.
How the cash advance fee and interest work
When you take out a cash advance, your card issuer charges a cash advance fee right away. This fee is a percentage of the amount you withdraw — typically 3, 4, or 5 percent, depending on your card and issuer. On a $500 withdrawal, a 5 percent fee means you pay $25 just to get the cash. That $25 is added to your credit card balance.
Interest on the cash advance begins accruing the day you withdraw it. Unlike regular purchases, which often have a grace period (usually 21 to 25 days before interest kicks in), cash advances have no grace period. The interest rate is also higher — often 5 to 10 percentage points above your regular purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 23 or 25 percent. This compounds daily, so the longer you carry the balance, the more you owe.
The combination of an upfront fee plus a high interest rate makes cash advances one of the most expensive ways to borrow money on a credit card. A $500 advance with a 5 percent fee ($25) and a 25 percent APR will cost you roughly $10 in interest after one month if you don't pay it back.
Where you can withdraw cash and what each option costs
You have two main ways to get cash: at an ATM or at a bank teller window. ATMs are faster and available 24/7, but some charge an operator fee on top of your card issuer's cash advance fee. A bank teller will not charge an extra fee, but you can only withdraw during business hours and you need to visit a branch in person.
At an ATM, you insert your card, enter your PIN, and select the cash advance option (usually labeled "withdrawal" or "cash advance"). The ATM will show you the total fee — both your card issuer's fee and any fee charged by the ATM operator. Some ATMs charge $2 to $3 per transaction. If you use an out-of-network ATM (one that does not belong to your card issuer's bank), the fee is usually higher. A bank teller will ask for your card and ID, confirm the amount, and hand you cash. No extra fee, but you are limited to business hours.
Your card issuer also sets a cash advance limit, which is separate from your credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your card's terms or call the issuer to find out your limit before you try to withdraw.
Why cash advances are expensive compared to other borrowing options
A cash advance is one of the most costly ways to borrow. 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. A payday loan charges a flat fee (often $15 to $20 per $100 borrowed) but is due in two weeks. A balance transfer to a 0 percent promotional card charges a 3 to 5 percent fee but gives you months to pay with no interest.
The cash advance combines a high upfront fee, a high interest rate, and no grace period. If you need $500 and carry it for three months, you could pay $40 to $50 in fees and interest combined. A personal loan for the same amount and term might cost $20 to $30. A balance transfer might cost $15 to $25 in fees alone, but with 0 percent interest for 12 months, you pay nothing more if you clear it in time.
Cash advances make sense only when you have no other option and need the money urgently. If you have time to explore alternatives — a personal loan, a loan from family, or even a balance transfer — those routes will almost always cost less.
How to minimize the cost if you do take a cash advance
If you must take a cash advance, a few steps will reduce the damage. First, withdraw only what you need. Every dollar you advance costs you the fee plus interest, so taking out $200 instead of $500 saves you money when ready. Second, pay it back as fast as you can. Interest compounds daily, so every week you carry the balance costs you more. If you can pay it back within a few days, the interest charge will be small.
Third, use a bank teller instead of an ATM if possible. You avoid the operator fee, which saves $2 to $3 per withdrawal. Fourth, check whether your card issuer has a lower cash advance rate or fee for certain account holders — some issuers offer better terms to customers with good payment history or higher credit scores, though this is rare.
Finally, do not take a cash advance to pay off another debt unless you are certain the new debt will cost less. If you are paying 25 percent on a cash advance to pay off a 20 percent credit card balance, you are making the problem worse.
Alternatives to cash advances that may cost less
Before you use a cash advance, consider these options. A personal loan from a bank, credit union, or online lender typically charges 6 to 36 percent APR with no upfront fee and a fixed repayment schedule. You know exactly what you owe and when. A balance transfer to a 0 percent promotional card charges a 3 to 5 percent fee upfront but gives you 6 to 21 months to pay with no interest — if you can pay the balance within that window, you save hundreds in interest.
A line of credit from a credit union or bank is a revolving loan with a lower interest rate than a credit card cash advance, usually 8 to 18 percent. You draw what you need and pay interest only on what you use. Borrowing from family or friends costs nothing if they do not charge interest, though it carries relationship risk. A payment plan with a creditor or service provider (your utility company, hospital, or landlord) may let you spread payments over time with no interest.
Each option has trade-offs. A personal loan requires a credit check and takes a few days to fund. A balance transfer requires a new card and works only if you have decent credit. A line of credit requires an process. But all of them are cheaper than a cash advance if you have even a few days to set them up.
Frequently Asked Questions
What is the difference between a cash advance and a regular credit card purchase?
A regular purchase has a grace period (usually 21 to 25 days) before interest starts, and the interest rate is lower. A cash advance charges a fee upfront, has no grace period, and charges a higher interest rate. Interest on a cash advance starts the day you withdraw it.
Can I get a cash advance if I have a low credit score?
Yes. Your cash advance limit is set by your card issuer based on your account history and credit limit, not your credit score alone. Even if you have fair or poor credit, you may still have a cash advance limit. Call your card issuer to find out what yours is.
Does a cash advance show up on my credit report?
The cash advance itself does not appear separately on your credit report, but the balance does. It counts toward your credit utilization (the percentage of your available credit you are using), which can lower your credit score if it pushes your utilization above 30 percent.
What happens if I cannot pay back a cash advance?
The balance stays on your credit card and accrues interest at the cash advance rate. If you miss payments, your issuer may charge late fees, and the missed payments will appear on your credit report. Your credit score will drop, and your interest rate may increase.
Can I take a cash advance from one credit card to pay off another credit card?
Yes, but it is usually a bad idea. You are borrowing at the cash advance rate (often 23 to 25 percent) to pay off a balance at the purchase rate (often 18 to 21 percent). You end up paying more interest, not less. A balance transfer to a 0 percent card is a better option if you may have access to.