What a credit card cash advance is and how it works
A cash advance is when you borrow money directly from your credit card issuer and receive it as cash. You go to an ATM, bank branch, or convenience store, use your credit card, and walk away with physical money. The amount you withdraw is added to your credit card balance, just like a purchase would be — except the terms are worse. You pay interest when ready (no grace period), you pay a fee upfront, and the interest rate is typically higher than your regular purchase rate.
The process itself is straightforward: insert your card, enter your PIN, select the cash advance option, and choose your amount. Most cards let you advance somewhere between $200 and several thousand dollars, depending on your credit limit and the card issuer's policies. The money appears in your account within minutes if you use an ATM, or you receive it on the spot at a bank branch.
The catch is cost. A typical cash advance fee runs 3 to 5 percent of the amount you withdraw — so a $500 advance costs $15 to $25 before you even pay interest. Interest starts accruing the same day, at a rate that is often 5 to 10 percentage points higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 28 percent.
Key Takeaways
- Cash advances charge an upfront fee (usually 3 to 5 percent) plus a higher interest rate than purchases, with no grace period.
- You can withdraw cash at ATMs, bank branches, or convenience stores using your credit card and PIN.
- Interest begins accruing when ready, so the longer you carry the balance, the more you pay.
- Most credit cards allow cash advances up to a percentage of your credit limit, which may be lower than your purchase limit.
- A personal loan or line of credit is usually cheaper if you need cash and have time to explore alternatives.
Where you can get a cash advance
ATMs are the most common place. Your credit card issuer's own ATMs are usually free (though the cash advance fee still applies), while out-of-network ATMs may charge an additional ATM operator fee on top of your card issuer's fee. Always check the ATM screen before you confirm — it will show you the total cost before you complete the transaction.
Bank branches work too. Walk into any branch of your card issuer and ask for a cash advance. A teller will process it on the spot. Some banks also allow cash advances at partner branches or through their mobile app, though app-based advances are less common.
Convenience stores and grocery stores sometimes offer cash advances at their checkout counters, though this is becoming less common. Ask the cashier whether they accept credit card cash advances before you get in line.
The fees and interest you will pay
Every cash advance costs you money upfront. The cash advance fee is a percentage of the amount you withdraw — typically 3, 4, or 5 percent. A $500 advance with a 4 percent fee costs $20 when ready. Some cards cap the fee at a flat dollar amount (for example, $10 minimum, $50 maximum), so a very small advance might hit the minimum, and a very large one might hit the cap.
Interest starts the day you withdraw the cash. There is no grace period like there is for purchases. If your cash advance APR is 25 percent and you withdraw $500, you owe roughly $10.42 in interest after one month if you make no payments. After three months, you owe about $31. The longer you carry the balance, the faster it grows.
Your card issuer applies your monthly payment to balances in a specific order set by law. Most cards pay down purchases first, then cash advances. This means if you have both a purchase balance and a cash advance balance, your payment goes toward the cheaper debt first, and the cash advance keeps accruing interest at the higher rate.
How to find your cash advance limit and APR
Your cash advance limit is separate from your credit limit. If your credit limit is $5,000, your cash advance limit might be $1,500 or $2,000. Check your credit card agreement or log into your online account to find this number. Most card issuers show it under "Account Details" or "Credit Information."
Your cash advance APR is also in your agreement, usually listed separately from your purchase APR. Call the customer service number on the back of your card if you cannot find it online. The representative can tell you both your limit and your rate in under a minute.
Some cards offer a 0 percent introductory rate on purchases but not on cash advances — cash advances always charge interest from day one, no matter what promotional rate you have.
Steps to take a cash advance
At an ATM: Insert your card, enter your PIN, select "Cash Advance" or "Get Cash" (wording varies by machine), enter the amount, and confirm. The ATM will show you the fee before you finish. Take your card and cash when the transaction completes.
At a bank branch: Walk up to a teller, tell them you want a cash advance on your credit card, and provide your card. They will ask how much you want and may ask for ID. They will process the advance and hand you the cash. Ask for a receipt.
At a convenience store or grocery store: Ask the cashier if they offer cash advances on credit cards. If they do, they will run your card and ask for your PIN, similar to a debit card transaction. You will receive cash and a receipt.
Keep your receipt. It shows the fee, the amount, and the date — all useful if you need to dispute the transaction or track your balance later.
When a cash advance makes sense versus other options
A cash advance is expensive and should be a last resort. Before you use one, consider whether you actually need physical cash or whether a transfer, check, or debit card would work instead.
If you do need cash and have time, a personal loan from a bank or credit union is almost always cheaper. Personal loan rates typically range from 6 to 36 percent depending on your credit, and you pay no upfront fee. Even at the high end, a personal loan costs less than a credit card cash advance. A bank or credit union can often approve you within a day or two.
A line of credit from your bank works similarly — you borrow what you need and pay interest only on what you use. Again, the rate is usually lower than a cash advance rate.
A cash advance makes sense only when you need cash when ready, have no other option, and plan to pay it back within a few weeks. If you need the money for longer than that, the interest and fees will cost you far more than a personal loan would.
How to pay back a cash advance quickly
The faster you pay off a cash advance, the less interest you pay. Make a plan to repay it before you withdraw the money, not after.
Pay more than the minimum. Your minimum payment might cover only the interest and fees, leaving the principal untouched. If you owe $500 plus a $20 fee, your minimum might be $30 or $40 — which covers interest but barely dents the balance. Pay $100 or $200 if you can.
Pay it before you make new purchases. As mentioned earlier, your payment goes to purchases first, so new purchases will delay the payoff of your cash advance. Stop using the card until the advance is paid off.
Set up automatic payments if your card issuer offers them. This keeps you from forgetting and lets you choose a fixed amount to pay each month. You can adjust it anytime.
Frequently Asked Questions
Can I take a cash advance if I have a low credit limit?
Your cash advance limit is usually a percentage of your credit limit — often 20 to 50 percent. If your credit limit is $1,000, your cash advance limit might be $200 to $500. You can only advance up to that limit, regardless of how much available credit you have for purchases.
What happens if I cannot pay back the cash advance?
The balance stays on your card and keeps accruing interest. If you miss payments, your card issuer will charge late fees and may report the missed payment to credit bureaus, which damages your credit score. After several months of non-payment, the issuer may close your account or send the debt to a collection agency.
Does a cash advance hurt my credit score?
Taking a cash advance itself does not hurt your score, but it increases your credit utilization (the percentage of your limit you are using), which can lower your score slightly. Missed payments or high balances that stay on your card for months will hurt your score more significantly.
Can I take a cash advance from a credit card I do not have in my wallet?
No. You need the physical card or, in some cases, your card number and PIN. You cannot take a cash advance over the phone or online — it must be done in person at an ATM, bank branch, or store. This is a security measure to prevent fraud.
Is there a difference between a cash advance and a balance transfer?
Yes. A cash advance gives you physical cash and charges a high fee and interest rate. A balance transfer moves debt from one card to another (usually a new card with a lower introductory rate) and does not give you cash. Balance transfers are useful for consolidating debt; cash advances are for getting cash.