Yes, you can withdraw money from a credit card, but it costs more than a purchase and works differently than a debit card
A credit card cash withdrawal is called a cash advance. When you take one, you are borrowing money directly from your credit card issuer at the ATM, bank teller, or sometimes through a convenience check. The money goes into your pocket or account when ready, but the cost is higher than making a purchase with the same card. You pay an upfront fee, a higher interest rate, and interest starts accruing right away — there is no grace period like there is for regular purchases.
Most people should avoid cash advances unless they have no other option. The fees and interest rates make them an expensive way to get cash. If you need money urgently, a personal loan, a line of credit, or even a payday loan from a credit union may cost less.
Key Takeaways
- A cash advance charges a 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 using your credit card PIN, at a bank teller, or through a convenience check, depending on your card issuer.
- Your credit card issuer sets a cash advance limit, which is often lower than your overall credit limit and may be as low as $500.
- Interest on a cash advance is typically 2 to 3 percentage points higher than the rate on purchases, and you pay it from day one with no grace period.
- Repeated cash advances can damage your credit score because they count as debt and signal financial stress to lenders.
How a cash advance works step by step
To take a cash advance at an ATM, insert your credit card, enter your PIN, select "cash advance" or "withdrawal," and choose the amount. The ATM will dispense cash and charge your credit card account. At a bank teller, you show your credit card and ID, tell them the amount, and they hand you cash and charge your account. Some card issuers also send convenience checks that you can write like a regular check; when you cash or deposit them, the amount is treated as a cash advance on your card.
The money appears in your account or wallet when ready. The charges — the fee and interest — post to your credit card statement within a few days. You then owe the full amount plus fees and interest, and you pay it back through your regular credit card payment, just like any other charge on the card.
Fees and interest rates on cash advances
Every cash advance comes with an upfront fee, usually between 3 and 5 percent of the amount you withdraw. On a $500 advance, that is $15 to $25 just to get the cash. Some card issuers cap the fee at a flat amount (for example, $10 minimum, $50 maximum), so a very small advance might cost $10 and a very large one might cost $50 regardless of the percentage.
The interest rate on a cash advance is separate from your regular purchase rate. If your card charges 18 percent APR on purchases, the cash advance rate might be 21 or 23 percent. Interest starts accruing the day you withdraw the cash — there is no 21-day grace period like there is for purchases. If you carry a balance, the interest compounds daily until you pay it off.
On a $500 cash advance at 22 percent APR, you pay roughly $9 in interest per month if you do not pay it down. Add the upfront fee of $15 to $25, and the true cost of borrowing $500 for a month is $24 to $34 — roughly 5 to 7 percent of the amount borrowed.
Your cash advance limit and how it differs from your credit limit
Your credit card issuer sets a separate cash advance limit, which is often much lower than your overall credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or even $500. The issuer determines this limit based on your credit history, income, and account history with them.
You can contact your card issuer to ask what your cash advance limit is. Some issuers let you request an increase, but many do not. If you try to withdraw more than your limit, the ATM or teller will decline the transaction. The limit resets each month, so if you withdraw $500 and your limit is $500, you cannot withdraw again until the next billing cycle.
Why cash advances hurt your credit score
A cash advance shows up on your credit report as a balance on your credit card, just like a purchase does. If you carry the balance, it increases your credit utilization ratio — the percentage of your available credit that you are using. High utilization (above 30 percent) signals financial stress to lenders and can lower your credit score by 10 to 50 points or more, depending on how much you owe.
Repeated cash advances are a red flag. Credit scoring models and lenders interpret them as a sign that you are running out of money and borrowing against your credit card to cover expenses. This can make it harder to get approved for a mortgage, car loan, or other credit in the future, and it may result in higher interest rates if you are approved.
Alternatives to a credit card cash advance
If you need cash urgently, consider these options before taking a cash advance. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee, and you know the exact payment and payoff date upfront. A line of credit works like a credit card but often has a lower interest rate. A credit union cash advance (if you are a member) may have lower fees and rates than a credit card.
If you have a 401(k) or similar retirement account, you may be able to borrow against it at a low rate, though you risk penalties if you leave your job. A payday loan from a credit union (not a payday lender) charges a flat fee but no interest, making it cheaper than a credit card cash advance for a short-term need. Asking family or friends for a loan, while uncomfortable, costs nothing and avoids debt entirely.
How to pay off a cash advance quickly
If you have already taken a cash advance, pay it off as fast as you can. Credit card payments are typically applied to the lowest-interest debt first, which means your cash advance (at the highest rate) gets paid last. To speed this up, contact your card issuer and ask if you can make a payment directed specifically to the cash advance balance. Some issuers allow this; others do not.
If your issuer does not allow targeted payments, make a large lump-sum payment to your card. The payment will reduce your overall balance, and the issuer will explore it according to their standard method, but a bigger payment means less interest accrues while you wait. Avoid taking another cash advance while you are paying off the first one, as this resets the clock and increases your total interest cost.
Frequently Asked Questions
Can I use my credit card at an ATM without a PIN?
No. To withdraw cash at an ATM, you need a PIN. If you do not have one, contact your card issuer to request one. Some issuers mail it to you; others let you set one online or by phone. You cannot use a credit card at a teller without a PIN either, though a teller may accept your ID and card for verification.
Does a cash advance show up differently on my credit report than a regular purchase?
It shows up as a balance on your credit card account, just like a purchase does. The credit bureaus do not distinguish between the two on your report. However, your card issuer's internal records flag it as a cash advance, which may affect how they treat you if you explore for a credit limit increase or another product from them.
What happens if I cannot pay back a cash advance?
It becomes part of your credit card debt. If you miss payments, your card issuer will charge late fees, increase your interest rate, and report the missed payment to the credit bureaus. This damages your credit score and can lead to collection action. Contact your issuer when ready if you cannot pay to discuss a hardship plan or payment arrangement.
Is there a way to avoid the cash advance fee?
No. Every cash advance incurs a fee set by your card issuer. You cannot negotiate it away or find a workaround. The only way to avoid the fee is to not take a cash advance. Some card issuers waive the fee for new cardholders during an introductory period, so check your welcome materials.
Can I take a cash advance from a credit card I do not use?
Yes, as long as the card is active and you have a cash advance limit. You do not need to have made recent purchases on the card. However, taking a cash advance on an unused card will set up it and may trigger interest charges, so only do this if you truly need the cash.