Getting cash from your credit card is called a cash advance, and it works differently from a regular purchase
A cash advance lets you withdraw money from your credit card at an ATM, bank, or through a cash-back transaction at a store. The money comes from your available credit line, not from a separate account. You pay it back like any other credit card balance — but with higher costs. Cash advances charge their own interest rate (usually much higher than your purchase rate), start charging interest when ready with no grace period, and often include an upfront fee of 3 to 5 percent of the amount you withdraw.
Before you take a cash advance, understand that it is one of the most expensive ways to borrow money on a credit card. If you need cash, other options like a personal loan, payday loan, or borrowing from family may cost you less. But if you decide to proceed, here is how each method works.
Key Takeaways
- Cash advances charge a separate, higher interest rate than purchases, with no grace period, so interest starts accruing when ready.
- You can get a cash advance at an ATM using your PIN, at a bank teller window with your card and ID, or sometimes through a store cashier.
- Most credit cards charge an upfront fee of 3 to 5 percent of the cash advance amount on top of the interest rate.
- The total cost of a cash advance depends on how much you withdraw, your card's cash advance rate, and how long you carry the balance.
- Paying off a cash advance should be your priority because the interest rate is typically 5 to 10 percentage points higher than your regular purchase rate.
Withdrawing cash at an ATM with your credit card
Using an ATM is the fastest way to get a cash advance. Insert your credit card into any ATM that displays your card's logo (Visa, Mastercard, American Express, or Discover). Enter your PIN — the same four-digit code you use for a debit card. Select "Withdrawal" or "Cash Advance," then enter the amount you want.
The ATM will show you the fee before you confirm. This fee is separate from the interest rate and is charged when ready. After you confirm, the cash comes out and the amount is added to your credit card balance. Check your receipt to see the exact fee charged.
Not all ATMs accept credit cards for cash advances — some only work with debit cards. If the ATM rejects your card, try a different machine or go to a bank branch instead. ATMs at your own bank usually charge lower fees than out-of-network machines, so check your card's terms to see the difference.
Getting cash from a bank teller
Walk into any bank branch that accepts your card type and ask the teller for a cash advance. Bring your credit card and a photo ID. Tell the teller how much cash you need, and they will process it at the counter. This method works even if you do not have a PIN set up on your credit card, which makes it useful if you forgot your PIN or never created one.
Bank tellers will tell you the fee upfront before they hand over the cash. The fee and interest rate are the same whether you use an ATM or a teller — the only difference is convenience and whether you have a PIN. Some banks charge a small additional fee for processing a cash advance at the teller window, so ask before you proceed.
Using cash back at a store checkout
Some stores let you request cash back when you make a purchase with your credit card. Ask the cashier if they offer this option. You will need to buy something first — you cannot get cash back without a purchase. The cash back amount is added to your total bill and charged to your credit card.
This method avoids the ATM fee, but you are still charged the cash advance interest rate and any cash advance fee your card applies. Check with your card issuer first, because not all cards treat store cash back as a cash advance — some treat it as a regular purchase. If it is treated as a cash advance, the interest starts when ready. If it is treated as a purchase, you may have a grace period before interest kicks in.
Understanding the fees and interest rates
Every cash advance comes with two separate costs: a cash advance fee and a cash advance interest rate. The fee is charged once, upfront, and ranges from 3 to 5 percent of the amount you withdraw. A $300 cash advance with a 4 percent fee costs you $12 when ready. This fee is added to your credit card balance.
The interest rate is separate and much higher than your regular purchase rate. While a typical purchase might charge 15 to 20 percent annual interest, a cash advance might charge 25 to 30 percent or higher. Interest starts accruing the day you take the advance — there is no grace period like there is for purchases. If you withdraw $300 at a 28 percent annual rate, you owe roughly $7 in interest per month until you pay it back.
To see your card's specific cash advance fee and rate, check your cardholder agreement or call the number on the back of your card. Rates and fees vary by card and by issuer, so comparing before you borrow can save you money if you have multiple cards available.
How to calculate the total cost of a cash advance
The total cost depends on three things: the amount you withdraw, the fee percentage, and how long you carry the balance. Here is a straightforward example:
| Amount withdrawn | Cash advance fee (4%) | Monthly interest (28% annual rate) | Total cost if paid back in 1 month |
|---|---|---|---|
| $300 | $12 | $7 | $19 |
| $500 | $20 | $12 | $32 |
| $1,000 | $40 | $23 | $63 |
If you carry the balance longer, the interest compounds and the total cost rises. A $300 cash advance carried for three months could cost you $40 or more in total fees and interest. Use your card issuer's online calculator or call them to estimate the exact cost for your situation.
Paying back a cash advance quickly
The faster you pay back a cash advance, the less interest you pay. Make this your priority over regular purchases. When you make a payment to your credit card, the payment goes toward your lowest-interest debt first — usually regular purchases — and your cash advance sits there accruing interest at the higher rate.
To pay off the cash advance faster, contact your card issuer and ask if you can direct a payment specifically to the cash advance balance. Some issuers allow this; others do not. If your issuer does not allow directed payments, make larger overall payments to your card so the cash advance gets paid down sooner.
Check your monthly statement to see how much of your payment went toward the cash advance versus purchases. If you took a $300 cash advance and made a $500 payment, ask the issuer to confirm that at least some of that payment reduced the cash advance balance.
Alternatives to a credit card cash advance
Before you take a cash advance, consider whether another option costs less. A personal loan from a bank or credit union typically charges 10 to 20 percent interest with no upfront fee, making it cheaper than most cash advances. A payday loan is faster but more expensive, charging fees that work out to 400 percent annual interest or higher. Borrowing from family or friends costs nothing if they agree to it.
If you have a 0 percent introductory APR offer on a new credit card, you could transfer the cash advance to that card and pay no interest for the promotional period — though balance transfer fees usually explore. If you own a home, a home equity line of credit charges much lower interest than a cash advance. If you have a 401(k), some plans allow loans against your balance at low rates.
The best alternative depends on your credit score, how much you need, and how fast you need it. A cash advance is convenient but expensive; other options may take longer but cost significantly less.
Frequently Asked Questions
Can I get a cash advance if I have a low credit limit?
Yes. Your cash advance limit is usually a percentage of your total credit limit — often 20 to 50 percent. If your credit limit is $1,000, you might be able to take a cash advance of $200 to $500. Check your cardholder agreement or call your issuer to find out your specific cash advance limit.
Does a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but carrying a high balance does. If your cash advance pushes your total credit card balance above 30 percent of your credit limit, your credit score may drop. Paying it off quickly keeps this damage minimal.
What happens if I cannot pay back the cash advance?
The balance stays on your credit card and interest keeps accruing at the higher cash advance rate. If you miss payments, late fees explore and your credit score drops. Contact your issuer to discuss a payment plan if you are struggling — some issuers offer hardship programs that lower your interest rate temporarily.
Can I take a cash advance from one card and pay it with another card?
You can use one card to pay another card's balance, but this is usually treated as a cash advance on the second card, triggering another fee and higher interest rate. This stacks costs and is not recommended. Instead, pay the cash advance with money from your bank account or income.
Is there a limit to how much cash I can withdraw at once?
Yes. Your card issuer sets a daily ATM withdrawal limit (often $500 to $1,000) and a total cash advance limit (usually 20 to 50 percent of your credit limit). You can withdraw less than the limit, but you cannot exceed it in a single transaction. Call your issuer if you need a higher limit for a specific withdrawal.