The main ways to get cash from a credit card
You can pull cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer check, or a cash-like purchase through a third party. Each one costs you differently and affects your credit differently, so the choice depends on what you need the money for and how quickly you can pay it back.
A cash advance is the most direct route. You go to an ATM, bank teller, or convenience store and withdraw cash using your credit card PIN. The money hits your account when ready. A balance transfer check is a physical check your card issuer mails to you, drawn against your credit line — you deposit it like any other check. A cash-like purchase means buying something easily converted to cash, like a money order or gift card, though this is rarely worth the fees.
The catch: all three methods charge you fees and interest that start right away, with no grace period like you get on regular purchases. This makes them expensive ways to borrow, even compared to other credit card uses.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, with interest accruing when ready.
- Balance transfer checks work the same way as cash advances but arrive by mail, so they take several days longer.
- Both methods report to your credit report as new debt and can lower your credit score if they push your overall credit utilization above 30 percent.
- If you need cash, a personal loan or line of credit from a bank or credit union usually costs less than a credit card cash advance.
Cash advances: fees, interest, and how they work
When you take a cash advance, your card issuer charges you a cash advance fee upfront — typically 3 to 5 percent of the amount you withdraw, though some cards charge a flat fee instead. So if you withdraw $500, you might pay $15 to $25 just to get the cash. That fee is added to your balance when ready.
On top of the fee, you pay interest on the full amount from day one. Unlike a regular purchase, which has a grace period (usually 21 to 25 days before interest kicks in), a cash advance starts accruing interest the moment you withdraw it. The interest rate is also higher — often 3 to 5 percentage points above your regular purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 23 percent.
The math adds up fast. A $500 advance at a 4 percent fee plus 23 percent APR costs you $20 in fees plus roughly $9.58 in interest for the first month if you don't pay it back. That's nearly $30 in charges before you've even used the money.
Balance transfer checks and their real cost
A balance transfer check is a physical check your card issuer sends you, usually unsolicited. You can deposit it into your bank account and use the money however you want. The fee and interest rate are the same as a cash advance — typically 3 to 5 percent upfront, plus a higher APR starting when ready.
The main difference is timing. A cash advance is available when ready at an ATM; a balance transfer check takes 5 to 10 business days to arrive and another 1 to 3 days to clear once you deposit it. If you need cash today, this method won't work. If you can wait a week or two, it's no better or worse than an ATM advance — same fees, same interest, same damage to your credit score.
Some card issuers offer a lower fee or promotional rate on balance transfer checks to encourage you to use them. Read the offer carefully: a 0 percent introductory rate on a balance transfer check is genuinely cheaper than a cash advance, but only if you pay off the full amount before the promotional period ends. After that, the rate jumps to the standard cash advance rate.
How cash advances affect your credit score
A cash advance shows up on your credit report as new debt, just like a purchase does. If you withdraw $500 and your credit limit is $2,000, your credit utilization jumps from 0 percent to 25 percent. Credit scoring models penalize high utilization, so your score may drop 10 to 50 points depending on your current score and how much you owe on other cards.
The damage is temporary if you pay the advance back quickly. Once you pay it off, your utilization drops and your score recovers over a few months. But if you carry the balance, the score hit persists as long as the debt does, and the interest keeps compounding.
A cash advance also doesn't help your credit mix or payment history the way a personal loan might. It's purely a liability with no upside to your credit profile.
Cheaper alternatives to a credit card cash advance
If you need cash and have time to plan, a personal loan from a bank or credit union is almost always cheaper. Personal loans charge a one-time origination fee (usually 1 to 6 percent) plus an APR that's typically lower than a credit card cash advance rate. A $500 personal loan at 15 percent APR with a 3 percent origination fee costs you $15 upfront plus roughly $6.25 in first-month interest — less than half the cost of a cash advance.
A line of credit from a bank or credit union works similarly but lets you draw money as you need it, like a credit card. You only pay interest on what you actually borrow, and the rate is usually fixed and lower than a cash advance rate.
If you have a 401(k), a loan against your retirement account is another option. You borrow from yourself, pay yourself back with interest, and there's no credit check or external approval process. The downside is that if you leave your job, the loan usually becomes due within 60 days or it's treated as a withdrawal, triggering taxes and penalties.
If you're in a bind and have no other options, asking a friend or family member for a short-term loan costs nothing and avoids debt entirely — though it comes with its own risks to the relationship.
When a cash advance might make sense
A cash advance is rarely the right choice, but there are narrow situations where it's the least bad option. If you have an emergency that requires cash when ready and no other borrowing source is available, a small advance you can pay back within a month might cost less than the alternative (like a late fee or overdraft charge).
Some people use a cash advance to pay off a higher-interest debt, like a payday loan. If you're paying 400 percent APR on a payday loan and can refinance it with a credit card cash advance at 23 percent, the advance is the better deal — though a personal loan would be better still.
In general, if you have time to think about it, you shouldn't use a cash advance. If you're considering one, spend an hour calling banks and credit unions to see if a personal loan is available. The difference in cost is usually worth the effort.
How to minimize the damage if you do take a cash advance
If you decide to proceed, here's how to keep the cost as low as possible. First, withdraw only what you actually need — every dollar you don't borrow saves you fees and interest. Second, pay it back as fast as you can. Even paying an extra $50 per month cuts the total interest you'll pay by weeks or months.
Third, check whether your card issuer offers any promotional rates on cash advances. Some do, especially if you're a new cardholder or have good credit. A 0 percent introductory rate on a cash advance is rare but not impossible — it's worth asking before you withdraw.
Fourth, make sure you understand the fee structure. Some cards charge a percentage fee; others charge a flat fee. If you're withdrawing a small amount, a flat fee might be cheaper. If you're withdrawing a large amount, a percentage fee might be cheaper. Do the math before you go to the ATM.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it's almost never worth it. You'd pay a 3 to 5 percent cash advance fee plus a higher interest rate, so you'd end up paying more to move the debt than you would by just paying down the original card. A balance transfer to a card with a 0 percent promotional rate is a better option if you may have access to.
What's the difference between a cash advance and a balance transfer?
A cash advance gives you cash; a balance transfer moves debt from one card to another. A balance transfer usually has a lower fee (often 3 percent versus 5 percent for a cash advance) and may come with a promotional 0 percent rate. Use a balance transfer to move existing debt; use a cash advance only if you need actual cash.
Will taking a cash advance hurt my credit score?
Yes, temporarily. It increases your credit utilization, which can lower your score by 10 to 50 points. The damage is worst if you carry the balance for months. If you pay it back within a few weeks, the score recovers quickly.
Can I take a cash advance if I have bad credit?
If you already have the credit card, yes — you can take a cash advance up to your available credit limit regardless of your current credit score. The card issuer already approved you when you opened the account. Your score may drop further, but that won't stop you from withdrawing the cash.
What happens if I can't pay back a cash advance?
The balance stays on your card and accrues interest at the cash advance rate (usually 23 percent or higher). If you miss payments, late fees kick in and the debt gets reported to the credit bureaus, damaging your score. After 180 days of missed payments, the card issuer may charge off the debt and sell it to a collection agency.