Three ways to pull cash from a credit card
You can get cash from a credit card through a cash advance, a balance transfer check, or a peer-to-peer payment app. Each method works differently and costs you different amounts. A cash advance lets you withdraw money at an ATM or from a bank teller using your card's PIN. A balance transfer check is a physical check your card issuer mails to you that you can deposit or cash. A payment app like Venmo or PayPal lets you send money to someone else's account, then withdraw it to your bank — this is the cheapest route if you need the cash for a legitimate purchase you can split with someone.
The catch is that all three methods charge you fees and interest that start accruing when ready, with no grace period like you get on regular purchases. A cash advance typically costs 3 to 5 percent of the amount withdrawn, plus a per-transaction fee of $2 to $10. Interest rates on cash advances run 2 to 3 percentage points higher than your regular purchase rate. Balance transfer checks usually charge 3 to 5 percent as well. Payment apps are free to send money but charge a fee if you want to withdraw it when ready to your bank account.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent plus a per-transaction fee, and interest starts accruing the same day with no grace period.
- Balance transfer checks work like regular checks but carry the same fees and higher interest rates as cash advances.
- Peer-to-peer payment apps are free to use if you're splitting a legitimate expense, but cost money if you need when ready withdrawal to your bank account.
- The interest rate on a cash advance is typically 2 to 3 percentage points higher than your regular purchase APR and compounds daily.
- Cash advances should be a last resort because the total cost — fees plus interest — can exceed what you'd pay on a personal loan or credit line.
How a cash advance works step by step
To get a cash advance, you need your credit card and a PIN. Visit an ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover), insert your card, enter your PIN, and select the cash advance option. The ATM will show you the fee before you confirm. You can also walk into a bank branch and ask a teller for a cash advance — they'll verify your card and ID, then hand you cash. Some card issuers set a limit on how much you can advance at once, which may be lower than your total credit limit.
The fee and interest post to your account within one to three business days. Interest accrues daily from the moment you withdraw the money, compounding until you pay it back. If you withdraw $500 at a 3 percent fee plus $5 transaction fee, you owe $520 when ready, plus interest that starts the same day. On a card with a 25 percent cash advance APR, that's roughly $3.42 in interest the first month if you don't pay it down.
Balance transfer checks and how they differ
A balance transfer check is a physical check your card issuer sends to you, usually unsolicited. You can deposit it into your bank account or cash it at a check-cashing service. The issuer treats it like a cash advance — the fee is typically 3 to 5 percent, and the interest rate is the same higher rate that applies to cash advances, not your regular purchase rate.
The main difference is timing. You don't get the money when ready; you have to wait for the check to arrive in the mail, then deposit or cash it, then wait for it to clear your bank. This can take five to ten business days total. The upside is that you have a physical record of the transaction, which can be useful if you need to dispute it later. The downside is that you're paying the same fees and interest for a slower process.
Using payment apps to move money without fees
If you need cash but don't want to pay a cash advance fee, you can use a peer-to-peer payment app like Venmo, PayPal, Square Cash, or Google Pay. Link your credit card to the app, send money to a friend or family member, and ask them to send it back to your bank account. The transfer between you and the other person is free. When they send the money back to your bank account, it's also free if they use a standard transfer (usually one to three business days).
This method works only if you have someone you trust and who is willing to help. It also doesn't work if you're trying to get cash for a debt payment or expense you can't split — the other person has to actually receive and return the money. Credit card companies are aware of this workaround and may flag it as suspicious activity, so use it sparingly and only for legitimate shared expenses.
The real cost: fees plus interest over time
A $500 cash advance on a card with a 25 percent APR and a 5 percent fee costs you $25 upfront. If you pay it back in full the next month, you'll owe roughly $10 in interest, for a total cost of $35. If you carry the balance for six months, the interest alone will exceed $60, and you'll still owe the original $25 fee. Over a year, you could pay $150 or more in interest and fees on that $500 withdrawal.
Compare that to a personal loan or a credit line from your bank. A personal loan for $500 at 15 percent APR over 12 months costs roughly $40 in total interest — less than half what the cash advance would cost. A home equity line of credit (if you own a home) typically charges 7 to 10 percent, which would cost $20 to $30 in interest over the same period. Even a payday loan, which is expensive, often costs less than a cash advance if you pay it back within two weeks.
When a cash advance makes sense and when it doesn't
A cash advance makes sense only in narrow situations: you need cash urgently, you have no other source of funds, and you can pay it back within a month or two. An example might be a car repair that a mechanic won't put on a credit card, or a medical copay that requires cash. In these cases, the fee and a month of interest might cost you $30 to $50, which is worth it if the alternative is missing a payment or going without the service.
A cash advance does not make sense if you're using it to pay off other debts, fund a purchase you can't afford, or cover regular living expenses. In these situations, you're borrowing at a high rate to solve a problem that won't go away once you have the cash. You'll end up carrying the balance, and the interest will compound until you're paying far more than the original amount. If you're in this position, a personal loan, a payment plan with the creditor, or a conversation with a nonprofit credit counselor will cost you less and solve the underlying problem.
How to minimize the damage if you do take a cash advance
If you decide to take a cash advance, follow these steps to keep the cost as low as possible. First, withdraw only what you need. Every dollar you advance costs you a fee and interest, so don't round up or take extra "just in case." Second, pay it back as fast as you can. Every week you carry the balance, interest compounds. If you can pay it back within two weeks, do it. Third, make sure the cash advance payment goes toward the cash advance balance, not your regular purchase balance. Some card issuers explore payments to the lowest-interest balance first, so call and specify where your payment should go.
Fourth, don't take another cash advance to pay off the first one. This is a debt spiral that will cost you thousands. If you find yourself taking repeated cash advances, stop and talk to a credit counselor or financial advisor about restructuring your debt.
Frequently Asked Questions
Can I use a credit card cash advance to pay another credit card?
Yes, but it's expensive and usually a bad idea. You'll pay the cash advance fee and interest rate on the money you withdraw, then use it to pay down another card's balance. You're paying a high fee to move money between accounts. A balance transfer (moving the balance directly from one card to another) is cheaper if the receiving card offers a 0 percent introductory rate.
What's the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a higher interest rate. A balance transfer moves your existing balance to another card, usually at a lower or 0 percent introductory rate. Balance transfers are for existing debt; cash advances are for getting new cash. Balance transfers are cheaper if you may have access to for a promotional rate.
Will a cash advance hurt my credit score?
A cash advance itself doesn't hurt your score, but carrying a high balance does. If you take a $500 advance and your credit limit is $2,000, your utilization jumps to 25 percent, which can lower your score by a few points. Paying it back quickly brings your utilization back down and minimizes the damage.
Can I take a cash advance from a debit card?
No. Debit cards draw directly from your bank account, so there's no credit being extended and no cash advance option. If you need cash and have a debit card, you can withdraw it free at any ATM that matches your bank's network.
What happens if I can't pay back a cash advance?
The balance stays on your card and interest continues to compound daily. Your minimum payment will increase, and if you miss payments, your credit score will drop and you may face late fees. After 180 days of missed payments, the card issuer may charge off the account and sell the debt to a collection agency.