What Getting Cash From Your Credit Card Actually Costs
You can take cash out using your credit card at an ATM, through a bank teller, or sometimes at a store checkout. But it is not the same as spending on the card. A cash advance charges you a fee upfront — usually 3% to 5% of the amount — plus a higher interest rate than regular purchases, often 20% to 30% annually. Interest starts accruing when ready, with no grace period like you get on purchases.
If you need $500 in cash, a 5% fee costs you $25 right away. If you carry that balance for three months at 25% annual interest, you pay another $31 in interest. The total cost is $56 — more than 11% of what you borrowed. This is why cash advances should be a last resort, not a convenience.
The real question is not whether you can get cash from your card, but whether the cost makes sense for your situation. For genuine emergencies where you have no other option, it may. For everyday spending, it almost never does.
Key Takeaways
- Cash advances charge an upfront fee of 3% to 5% plus interest rates of 20% to 30% annually, with no grace period.
- You can withdraw cash at an ATM, through a bank teller, or at some store checkouts using your credit card PIN.
- Interest begins accruing the moment you take the cash, so a $500 advance can cost $50 to $100 over three months.
- Balance transfer cards and personal loans are cheaper alternatives if you need cash and have time to explore options.
- Some credit cards offer no cash advance option at all, so check your card's terms before assuming you can use this method.
How to Take a Cash Advance at an ATM or Bank
The mechanics are straightforward. 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 branch, you can ask a teller to process a cash advance; bring your card and ID.
Your credit card issuer sets a cash advance limit, which is often lower than your credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your card's terms or call the number on the back to find out your limit before you go to the ATM.
Some cards do not allow cash advances at all — this is common with rewards cards and cards designed for purchases only. If your card does not have a PIN, you cannot use an ATM. You would need to go to a bank branch and request a cash advance there, though many banks now require advance notice.
The Fees and Interest You Will Pay
Every cash advance involves at least two costs. The cash advance fee is charged when you withdraw the money — typically 3% to 5% of the amount, with a minimum fee of $5 to $10. A $200 withdrawal might cost $10 to $15 in fees alone.
The second cost is interest. Unlike purchases, which often have a grace period (usually 21 to 25 days before interest kicks in), cash advances start accruing interest when ready. The interest rate is higher than your purchase rate — often 5 to 10 percentage points higher. If your purchase rate is 18%, your cash advance rate might be 25% or 28%.
Here is what this looks like in dollars. A $500 cash advance at 5% fee plus 25% annual interest, paid back over six months, costs roughly $75 in fees and interest combined. Over a year, it costs $150 or more. Compare that to a personal loan at 12% interest, which would cost about $30 over six months.
Cheaper Ways to Get Cash When You Need It
If you have a few days, a personal loan from a bank, credit union, or online lender is almost always cheaper. Interest rates range from 6% to 36% depending on your credit, but even at the high end, a personal loan costs less than a credit card cash advance. You get the money in your bank account in one to five business days, and you know your exact payment schedule upfront.
A balance transfer card can work if you are moving existing debt. Some cards offer 0% interest for 6 to 21 months on transferred balances, though they charge a 3% to 5% transfer fee. This is useful if you are consolidating credit card debt, not for getting new cash.
If you have a 401(k) or similar retirement account, you may be able to borrow against it at a rate tied to prime plus 1% or 2% — far cheaper than a cash advance. The downside is that if you leave your job, the loan becomes due quickly. A credit union loan is another option; credit unions often offer lower rates and more flexible terms than banks.
For when ready needs, ask family or friends for a short-term loan, or look into whether your employer offers paycheck advances. Both are free or low-cost compared to a cash advance.
When a Cash Advance Makes Sense
A cash advance is defensible only in narrow situations. If you have a genuine emergency — a car repair you need today, a medical bill, a security deposit — and you have exhausted other options, a cash advance might be the least bad choice. The key is paying it back as fast as possible.
It makes sense only if you can pay off the advance within one or two months. If you are carrying the balance longer than that, the interest cost becomes punishing. A $500 advance paid back in two months costs roughly $25 in fees and interest. Paid back in six months, it costs $75. The longer you carry it, the worse the deal becomes.
It does not make sense for everyday spending, travel, or anything you could pay for with a debit card or regular purchase. It also does not make sense if you are already carrying a balance on your card — you are just adding more high-interest debt on top of existing high-interest debt.
How Cash Advances Affect Your Credit Score
A cash advance itself does not directly hurt your credit score, but it can indirectly. The advance increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 limit and take a $1,500 advance, your utilization jumps to 30%. High utilization can lower your score by 10 to 50 points.
The bigger risk is that you carry the balance. If you do not pay off the advance quickly, you are paying 25% or more in interest while your score drops from the high balance. This creates a cycle: your score drops, which makes other borrowing more expensive, which makes it harder to pay off the advance, which keeps your score low.
If you do take a cash advance, treat it as a short-term emergency measure and pay it off within the first billing cycle if possible. The longer it sits, the more it costs and the more damage it does to your credit profile.
What to Check Before You Take a Cash Advance
Before you go to an ATM, verify three things. First, confirm that your card allows cash advances — check your card agreement or call the issuer. Second, find out your cash advance limit, which may be lower than your credit limit. Third, ask what the fee and interest rate are for your specific card.
Some cards charge different fees depending on whether you use an ATM or a bank teller. Some charge a flat fee; others charge a percentage. Some issuers charge an additional fee if you use an out-of-network ATM. These details matter when you are calculating the true cost.
Also check whether your card has a PIN. If it does not, you cannot use an ATM and will need to visit a bank branch. Many banks now require 24 hours' notice for cash advances, so calling ahead saves you a wasted trip.
Frequently Asked Questions
Can I get a cash advance if I have bad credit?
Yes. Your cash advance limit is based on your existing credit limit, not a new credit decision. If your card is already open, you can take a cash advance up to your limit regardless of your current credit score. However, you cannot open a new credit card with bad credit, so this option only works if you already have an active card.
What happens if I cannot pay back the cash advance?
The balance stays on your card and accrues interest at the cash advance rate — usually 25% or higher. It gets reported to credit bureaus, damaging your score. If you miss payments, late fees and penalty interest rates kick in. The debt can be sold to a collection agency. Contact your card issuer when ready if you cannot pay; some offer hardship programs or payment plans.
Is a cash advance the same as a balance transfer?
No. A balance transfer moves debt from one card to another, usually at a lower rate for a set period. A cash advance puts cash in your hand but charges higher fees and interest from day one. Balance transfers are for existing debt; cash advances are for getting new cash.
Can I take a cash advance from a rewards credit card?
Some rewards cards allow cash advances, but many do not. Even if yours does, the cash advance does not earn rewards points — only purchases do. You pay the full fee and interest with no benefit. Check your card's terms to see if cash advances are even an option.
How long does a cash advance stay on my credit report?
The cash advance itself does not appear separately on your report — it is part of your credit card balance. If you pay it off on time, it has no lasting impact. If you miss payments or carry a high balance, that negative information stays on your report for seven years.