What a credit card cash advance is and how it works
A cash advance is when you borrow money directly from your credit card's line of credit, usually at an ATM, bank branch, or through a check. The money goes into your bank account or your hand — not toward a purchase. You pay interest on it when ready, often at a higher rate than your regular purchase APR, and you start owing it back right away with no grace period.
Unlike a purchase, which may have 21 to 25 days before interest kicks in, a cash advance begins charging interest the moment you withdraw it. Most cards also charge an upfront fee, usually 3 to 5 percent of the amount you take out. If you withdraw $500, you might pay $15 to $25 just to get the cash, plus daily interest on top of that.
Key Takeaways
- Cash advances charge interest when ready with no grace period, and the interest rate is usually higher than your purchase rate.
- You can get a cash advance at an ATM using your PIN, at a bank teller, or by writing a convenience check your card issuer sends you.
- Most cards charge an upfront fee of 3 to 5 percent of the amount withdrawn, in addition to daily interest.
- Cash advances report to credit bureaus as debt and can lower your credit score if they push your overall credit utilization above 30 percent.
- If you need cash urgently, a personal loan or credit union loan usually costs less than a credit card cash advance.
Getting cash at an ATM with your PIN
The fastest way to get a cash advance is at an ATM. Insert your credit card, enter your PIN (the same one you use for your debit card, or one your card issuer assigned), select "cash advance" or "withdrawal," and choose your amount. The ATM will show you the fee upfront before you confirm.
Not all ATMs accept credit cards — most are set up for debit cards only. Bank ATMs and ATMs inside convenience stores are more likely to work. If you are unsure whether your card has a PIN or what it is, call the number on the back of your card and ask. Some cards do not issue PINs for cash advances, which means you cannot use this method.
Withdrawing cash at a bank branch
You can walk into any bank branch — yours or another bank — and ask a teller for a cash advance on your credit card. Bring your card and a photo ID. The teller will process it like a withdrawal, and you will walk out with cash. This method works even if you do not have a PIN set up.
Bank branches have longer hours than ATMs but shorter hours than ATMs are open. If you need cash outside normal business hours, an ATM is your only option. Some banks charge a higher fee for teller-processed cash advances than ATM withdrawals, so ask before you proceed.
Using convenience checks to access your credit line
Your credit card issuer may send you convenience checks — blank checks drawn against your credit line. You write one out to yourself or to a person or business, deposit it in your bank account, and the amount becomes a cash advance on your card. You can also write a check directly to pay a bill.
Convenience checks are useful if you do not have a PIN or do not want to visit an ATM, but they carry the same fees and interest rates as ATM withdrawals. Watch for checks that arrive unsolicited in the mail — they are marketing tools, and using them locks you into the cash advance terms. If you do not want them, call your issuer and ask them to stop sending them.
Understanding the costs: fees and interest rates
A cash advance costs you money in two ways. First, there is an upfront transaction fee, usually 3 to 5 percent of the amount you withdraw. On a $1,000 advance, that is $30 to $50 before you even use the money. Second, interest accrues daily from the moment you withdraw it, at a rate that varies by card but is typically 2 to 5 percentage points higher than your purchase APR.
If your purchase APR is 18 percent, your cash advance APR might be 23 percent. On $1,000 at 23 percent, you owe about $19 in interest after one month if you make no payments. If you carry the balance for a year, interest alone will cost you over $230. The longer you hold the cash, the more expensive it becomes.
Your credit card statement will show the cash advance separately from purchases, with its own balance and interest calculation. Payments you make go toward your lowest-interest debt first, so cash advance interest can pile up while you pay down purchases.
How a cash advance affects your credit score
A cash advance shows up on your credit report as debt. If the amount is large relative to your credit limit, it can raise your credit utilization ratio — the percentage of your available credit you are using. Credit scoring models penalize high utilization, so a $2,000 cash advance on a $5,000 limit (40 percent utilization) will likely lower your score more than a $500 advance would.
The impact is usually temporary. Once you pay off the cash advance, your utilization drops and your score recovers. But while the balance sits on your card, it works against you. If you are planning to explore for a loan or mortgage soon, a cash advance is especially costly because it can lower your score right before a lender pulls your credit report.
Cheaper alternatives to a credit card cash advance
Before you use a cash advance, consider whether another source of cash would cost less. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee, and interest does not start until you actually borrow. A credit union cash loan (if you are a member) often has even lower rates. A payday loan is faster but much more expensive — usually 400 percent APR or higher — so avoid it unless you have no other option.
If you need cash for an emergency, ask whether you can borrow from family or friends, negotiate a payment plan with the person or business you owe, or look into a 0 percent balance transfer card if you have good credit. These routes take longer to set up but cost far less than a cash advance.
Frequently Asked Questions
Can I get a cash advance if my credit card is maxed out?
No. A cash advance draws from your available credit, not from money you have already borrowed. If your card is at its limit, you cannot take out a cash advance. You would need to pay down the balance first or request a credit limit increase from your issuer.
How long does it take to get the cash?
At an ATM or bank teller, you get the cash when ready. If you use a convenience check, the time depends on how long it takes your bank to clear the check — usually one to three business days. The cash advance itself posts to your credit card account right away, but the funds may take a day or two to appear in your bank account.
Do I have to pay back a cash advance all at once?
No. You can pay it back in monthly installments like any other credit card balance. However, interest accrues daily until the balance is zero, so paying it off as quickly as possible saves you money. Minimum payments will keep you in debt for years.
What if I do not have a PIN for my credit card?
You can still get a cash advance at a bank branch by showing your card and ID to a teller, or by using a convenience check. If you want to use an ATM, call your card issuer and ask them to set up a PIN for you — it usually takes a few minutes over the phone.
Will a cash advance hurt my credit score?
It can, especially if the amount is large. A cash advance raises your credit utilization ratio, which can lower your score temporarily. The impact fades once you pay it off. If you are explore for a loan soon, it is better to avoid a cash advance until after the lender pulls your credit report.