Three ways to turn a credit card into cash
You can get cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer to your bank account, or a cash-like purchase through a money order or gift card. Each costs differently and works at different speeds. A cash advance charges a fee (usually 3 to 5 percent) plus a higher interest rate than regular purchases — often 25 percent or more. A balance transfer moves debt from one card to another and doesn't give you cash directly, but it can lower what you owe if the new card has a 0 percent introductory rate. A cash-like purchase avoids the cash advance fee but still costs interest.
The reason these options exist is that credit card companies treat cash differently from purchases. When you buy something, the card issuer knows a merchant is involved and the transaction is tracked. When you ask for cash, the issuer takes on more risk — you could spend it on anything, and they have no way to recover it if you don't pay. That risk is why they charge more.
Key Takeaways
- A cash advance at an ATM or bank costs a flat fee (usually $3 to $10) plus interest starting when ready, with rates often 25 percent or higher.
- Balance transfers move debt to a new card and may offer 0 percent interest for 6 to 21 months, but you pay a transfer fee (usually 3 to 5 percent) upfront.
- Cash-like purchases such as money orders or gift cards avoid the cash advance fee but still charge interest, making them slower and more expensive than a regular purchase.
- Interest on cash advances begins accruing the day you withdraw it, with no grace period, so the cost grows when ready.
- If you need cash for an emergency, a personal loan or credit union loan often costs less than any credit card option.
How a cash advance works and what it costs
A cash advance is the most direct way to get cash from a credit card. You go to an ATM, a bank branch, or sometimes a convenience store and withdraw money using your card, just as you would with a debit card. The issuer when ready charges you a cash advance fee — typically $3 to $10 or 3 to 5 percent of the amount withdrawn, whichever is higher. On a $500 withdrawal, that could be $15 to $25 just to get the cash.
The interest rate on a cash advance is separate from your regular purchase rate. While a purchase might carry 18 percent APR, a cash advance often runs 25 to 30 percent APR or higher. Unlike a purchase, there is no grace period — interest begins accruing the moment you withdraw the money. If you withdraw $500 at 28 percent APR, you owe roughly $3.67 in interest after one week, and that amount compounds daily.
The math moves fast. A $500 cash advance at a $10 fee and 28 percent APR costs you $510 upfront plus $140 in interest over one year if you make no payments. Even if you pay it back in three months, you are paying roughly $35 in interest alone. For comparison, a personal loan from a bank or credit union at 12 to 18 percent APR would cost $15 to $22 in the same three months.
Balance transfers: moving debt to a lower rate
A balance transfer moves an existing balance from one credit card to another, usually one with a lower interest rate or a promotional 0 percent rate for a set period. This is not a way to get cash — it is a way to reduce what you owe on debt you already have. However, it can free up money in your budget if the new card's rate is much lower.
A balance transfer typically costs a fee of 3 to 5 percent of the amount transferred, charged upfront. On a $5,000 transfer, that is $150 to $250 added to your balance when ready. The trade-off is the interest rate. If you transfer $5,000 from a card charging 24 percent to a card offering 0 percent for 12 months, you save roughly $1,200 in interest over that year — far more than the transfer fee. After the promotional period ends, the rate reverts to the card's standard APR, which is usually 18 to 25 percent.
Balance transfers work best if you have a plan to pay down the balance during the 0 percent window. If you transfer $5,000 and pay $417 per month, you will owe nothing when the rate jumps. If you pay only $200 per month, you will still owe $2,600 when the promotional period ends, and that remaining balance will start accruing interest at the new rate. Many people use balance transfers to buy time while they increase their monthly payments or find a lower-cost loan.
Cash-like purchases: money orders and gift cards
Some people try to get cash indirectly by buying a money order or gift card with a credit card, then cashing out the gift card or using the money order as cash. This avoids the cash advance fee, but it does not avoid interest — you are still making a purchase on a credit card, and if you do not pay the full balance when the bill is due, interest accrues at your regular purchase rate.
The hidden cost is time and inconvenience. A money order costs $1 to $5 to buy, and you have to go to a bank, post office, or check-cashing store. A gift card to a store you do not plan to shop at is essentially cash you cannot spend, and you may lose it or forget about it. Neither option is faster or cheaper than a regular cash advance, and both leave you with the same interest problem: if you cannot pay the balance in full by the due date, you are paying interest on borrowed money.
When a personal loan or credit union loan is cheaper
If you need cash and have access to a bank or credit union, a personal loan almost always costs less than a credit card cash advance. A personal loan from a bank typically charges 8 to 18 percent APR depending on your credit score and income. A credit union personal loan often runs 6 to 12 percent APR. Both have fixed monthly payments and a set payoff date, so you know exactly what you will owe.
A $500 personal loan at 12 percent APR over 12 months costs you roughly $32 in interest — less than a single cash advance fee. A $2,000 loan at 12 percent over 24 months costs about $260 in interest. Compare that to a $2,000 cash advance at 5 percent fee ($100) plus 28 percent interest ($560 over one year), and the personal loan saves you hundreds of dollars.
The trade-off is time. A personal loan takes 1 to 3 business days to fund, while a cash advance is when ready. If you need money today, a cash advance is your only credit card option. If you can wait a few days, a personal loan is almost always the better choice. Credit unions often move faster than banks, and some offer same-day funding for members in good standing.
How to minimize the cost if you must use a credit card
If a cash advance or balance transfer is your only option, a few steps can reduce the damage. First, withdraw only what you need. Every dollar you advance costs you a fee and interest, so a $200 advance is cheaper than a $500 one. Second, pay it back as fast as you can. Interest compounds daily, so paying off a cash advance in two weeks instead of two months saves you roughly 75 percent of the interest cost.
Third, check whether your card issuer offers a lower cash advance rate or waived fee for members who meet certain conditions — some do, though it is rare. Fourth, if you are considering a balance transfer, compare the transfer fee against the interest you would pay on the original card over the promotional period. A 3 percent fee on $5,000 is $150, but if you would pay $1,500 in interest on the original card, the transfer is worth it.
Finally, treat a credit card cash advance as a last resort, not a regular source of cash. If you find yourself needing cash advances often, it usually signals that your income and expenses are out of balance, and a cash advance only delays the problem while adding cost.
Frequently Asked Questions
Can I get a cash advance on a credit card with no credit history?
Most credit card issuers allow cash advances for any cardholder, regardless of credit score, as long as you have available credit. However, if you have no credit history, you may not be able to get a credit card in the first place. A secured credit card (backed by a deposit) is often the first step, and it usually allows cash advances once you have held it for a few months.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you money in hand but charges a fee and high interest when ready. A balance transfer moves existing debt to a new card and may offer a lower rate, but it does not put cash in your pocket. Use a cash advance if you need money now; use a balance transfer if you already owe money on another card and want to lower the interest rate.
Will a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but it increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 limit and withdraw $2,000, your utilization jumps to 40 percent, which can lower your score slightly. Paying it back quickly brings your utilization back down and recovers the score.
Can I use a balance transfer to get cash into my bank account?
Some card issuers allow you to transfer a balance directly to your bank account, but most do not — they transfer only to another credit card. Check your card's terms or call the issuer to ask. If they do allow it, the fee and interest rules are the same as a regular balance transfer.
What happens if I cannot pay back a cash advance?
If you do not pay, interest continues to compound, and the debt may be reported to credit bureaus, damaging your score. After several months of non-payment, the issuer may close your account or send the debt to a collection agency. If you are struggling to pay, contact your issuer to ask about a hardship program — some offer lower rates or payment plans for customers in financial difficulty.