The main ways to get cash from a credit card
You can get cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer to your checking account, or a cash-like purchase using a special card feature. Each method charges different fees and interest rates, and each one costs you more than a regular purchase would.
A cash advance is the most common method. You insert your credit card into an ATM, enter your PIN, and withdraw cash up to your credit limit. The bank or ATM operator charges a fee (usually 3 to 5 percent of the amount withdrawn), and interest starts accruing when ready at a rate that is typically higher than your purchase APR. There is no grace period — you pay interest from day one, even if you normally pay your balance in full.
A balance transfer moves money from your credit card to a bank account. You contact your credit card issuer, request a balance transfer check or electronic transfer, and deposit the funds into your checking account. This also charges a fee (usually 3 to 5 percent) and carries a higher interest rate than purchases, though sometimes issuers offer a promotional rate for the first few months.
A cash-like purchase uses a feature some cards offer to buy prepaid cards, gift cards, or money orders at a store. These transactions are treated as purchases rather than cash advances, so they may carry your regular APR instead of a higher cash advance rate. However, the merchant may charge a fee, and the transaction may still be coded as a cash advance by your issuer.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent upfront and a higher interest rate than purchases, with interest starting when ready.
- Balance transfers to your bank account also charge 3 to 5 percent but may offer a lower promotional rate for the first few months.
- Interest on cash advances accrues from the moment you withdraw, even if you normally pay your full balance monthly.
- The cost of getting cash from a credit card is always higher than using a debit card or bank account, so use it only when you have no other option.
Cash advances: fees, interest, and how they work
A cash advance fee is a percentage of the amount you withdraw, charged by your credit card issuer. Most cards charge between 3 and 5 percent, though some charge a flat fee (such as $5 or $10) if that is higher. A $300 withdrawal with a 4 percent fee costs $12 in fees alone, before any interest.
The interest rate on a cash advance is separate from your purchase APR and is almost always higher. If your card charges 18 percent APR on purchases, the cash advance rate might be 24 or 28 percent. This rate applies to the full amount you withdrew, and interest accrues daily from the moment you take the cash. There is no grace period, so you pay interest even if you pay the balance in full the next day.
The math adds up quickly. A $500 cash advance at a 4 percent fee ($20) and 25 percent APR costs you $20 upfront plus roughly $10 in interest if you pay it back within a month. Over three months, the interest alone could exceed $35. This is why cash advances should be a last resort, not a regular source of spending money.
Balance transfers: when they make sense and when they do not
A balance transfer moves credit card debt to your bank account, usually through a check or electronic transfer. The issuer charges a fee (typically 3 to 5 percent) and applies an interest rate, but many cards offer a promotional period — sometimes 0 percent APR for 6 to 12 months — on balance transfers.
This can be useful if you need cash for a specific purpose and can pay it back within the promotional period. For example, if you transfer $2,000 at a 3 percent fee ($60) with 0 percent APR for 12 months, you pay $60 in fees but no interest if you pay off the balance within the year. Compare that to a cash advance, where you would pay $60 in fees plus roughly $250 in interest over the same period.
The catch is that the promotional rate expires. Once it does, any remaining balance reverts to the card's standard APR, which is usually higher than the purchase rate. If you cannot pay off the balance before the promotional period ends, you will owe interest at that higher rate on whatever remains. Read the terms carefully — the promotional period length and the APR after it expires vary by card and by offer.
Comparing the cost of each method
| Method | Fee | Interest Rate | Grace Period | Best For |
|---|---|---|---|---|
| Cash advance at ATM | 3–5% of amount | Higher than purchase APR (often 24–28%) | None — interest starts when ready | Emergency cash when no other option exists |
| Balance transfer | 3–5% of amount | Often 0% for 6–12 months, then standard APR | Yes, during promotional period | Larger amounts you can pay back within promotional period |
| Cash-like purchase (gift card, prepaid card) | Varies by merchant | May be purchase APR instead of cash advance rate | Possibly, depending on card terms | Smaller amounts when you want to avoid cash advance fees |
The cost difference between methods is significant. A $1,000 cash advance costs $30 to $50 in fees plus roughly $20 to $25 in interest per month. A $1,000 balance transfer with a 0 percent promotional rate costs $30 to $50 in fees and no interest for the promotional period. A $1,000 purchase on a debit card or from your bank account costs nothing.
What happens to your credit score when you take a cash advance
A cash advance affects your credit score in two ways: it increases your credit utilization ratio, and it may be reported differently than a regular purchase.
Your credit utilization ratio is the percentage of your available credit that you are currently using. If you have a $5,000 credit limit and take a $1,000 cash advance, your utilization jumps to 20 percent. Credit scoring models penalize high utilization, so this can lower your score by a few points. The effect is temporary — your score recovers as you pay down the balance — but it happens when ready.
Some issuers report cash advances separately from purchases, which can signal to other lenders that you are borrowing cash rather than making purchases. This may affect how they view your creditworthiness, though the impact is usually small compared to the utilization effect.
Alternatives to getting cash from a credit card
Before you take a cash advance, consider whether you actually need cash or just need to pay for something. If you need to pay a bill or make a purchase, use the credit card directly — you will avoid the cash advance fee and interest rate entirely.
If you need actual cash, a personal loan from a bank or credit union is usually cheaper than a cash advance. Personal loans typically charge 6 to 36 percent APR depending on your credit, with no upfront fee. Even at the high end, a personal loan is cheaper than a cash advance at 25 percent APR plus a 5 percent fee.
A payday loan is another option, though it is expensive — typically 400 percent APR or higher. It is still worth comparing to a cash advance if you only need the money for a few weeks, because the total cost may be lower.
If you have a savings account, withdraw from that instead. If you do not have savings, that is a sign to build an emergency fund before you need to borrow. Even $500 to $1,000 set aside can prevent you from needing a cash advance in most situations.
How to minimize the cost if you do take a cash advance
If you have no other option, take the smallest amount you need and pay it back as fast as possible. Every day the balance sits, interest accrues at the daily rate. A $500 cash advance at 25 percent APR costs roughly $3.42 per day in interest, so paying it back in one week instead of four weeks saves you about $40.
Pay the cash advance before you pay other balances on the same card. Credit card issuers explore payments to the lowest-interest balance first, which means your payment goes to regular purchases before it touches the cash advance. If you want the cash advance paid off quickly, contact your issuer and ask them to explore your payment to the cash advance specifically, or pay online and select which balance to pay.
Check whether your card offers a lower-cost alternative. Some cards have a feature that lets you transfer a small amount to your bank account with a lower fee or no fee at all. Others offer a promotional rate on balance transfers. Read your cardholder agreement or call the issuer to ask what options are available before you use the ATM.
Frequently Asked Questions
Can I get a cash advance on a credit card with no credit history?
Yes. A cash advance is available to anyone with an active credit card account, regardless of credit score. However, your credit limit determines how much you can withdraw, and new cardholders often have lower limits. The fee and interest rate are the same whether your credit is excellent or poor.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash at an ATM or bank and charges interest when ready with no grace period. A balance transfer moves money to your bank account and often includes a promotional 0 percent APR period. Balance transfers are usually cheaper if you can pay back the balance within the promotional period.
Do I pay interest on a cash advance if I pay it back right away?
Interest starts accruing when ready on a cash advance, even if you pay it back the next day. There is no grace period. You will owe the fee plus at least one day of interest. A $500 cash advance at 4 percent fee and 25 percent APR costs $20 in fees plus roughly $0.34 in interest if paid back the next day.
Will a cash advance hurt my credit score?
A cash advance increases your credit utilization ratio, which can lower your score by a few points temporarily. The effect is usually small and recovers as you pay down the balance. The bigger impact comes from missing payments or carrying a high balance long-term.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Most issuers set a cash advance limit that is lower than your credit limit — often 20 to 50 percent of your total limit. You can contact your issuer to ask what your cash advance limit is, or check your cardholder agreement.