What a cash advance is and why it costs more
A cash advance is when you withdraw money directly from your credit card at an ATM, bank, or through a convenience check. The card issuer treats it as a loan against your credit limit, not a purchase. This matters because cash advances carry higher fees and interest rates than regular purchases — often 3 to 5 percent upfront, plus a daily interest rate that starts when ready with no grace period.
Most credit cards charge interest on cash advances from day one. With a purchase, you typically get 21 to 25 days before interest accrues. With a cash advance, interest begins the moment you withdraw the money. The combination of an upfront fee, a higher interest rate, and no grace period makes cash advances expensive. Before you proceed, check whether a personal loan, balance transfer, or straightforward charging the expense to the card itself would cost less.
Key Takeaways
- Cash advances charge an upfront fee (usually 3 to 5 percent of the amount) plus a higher interest rate than purchases, with interest starting when ready.
- You can withdraw cash at an ATM using your PIN, at a bank teller window with your card and ID, or by depositing a convenience check.
- Your credit card statement will show the cash advance separately from purchases, and the balance will appear on your credit report.
- Interest on a cash advance accrues daily and is not waived during any promotional period, so the longer you carry the balance, the more you pay.
- If you need cash urgently, a personal loan or payday alternative loan from a credit union may cost less than a credit card cash advance.
Withdrawing cash at an ATM with your PIN
The fastest way to take a cash advance is at an ATM. You will need your credit card and your PIN (personal identification number). If you do not have a PIN set up, contact your card issuer before you go to the ATM — you can usually set one up by phone or through your online account in minutes.
Insert your card into the ATM, enter your PIN, and select the cash advance or withdrawal option (the exact wording varies by machine). Enter the amount you want. The ATM will show you the fee upfront before you confirm. Once you complete the transaction, the money is in your hand when ready, but the interest clock has started. Check your card statement within a few days to confirm the transaction posted correctly.
Getting cash from a bank teller or branch
If you prefer to speak with someone or need a larger amount, you can visit a branch of your card issuer's bank or a partner bank. Bring your credit card and a photo ID. Tell the teller you want a cash advance. They will ask how much, run your card, and show you the fee before processing.
Some card issuers allow cash advances at any bank in their network; others limit it to their own branches. If your card issuer is not a bank (for example, if it is a credit union or online-only lender), you may not be able to get cash this way. Call your issuer's customer service number on the back of your card to find out which banks accept your card for cash advances.
Using convenience checks to get cash
Many credit card issuers send convenience checks with your statements or mail them on request. These are blank checks drawn against your credit line. You can write one to yourself, deposit it in your bank account, and withdraw the cash. You can also write one directly to a person or business, though that defeats the purpose of a cash advance.
Convenience checks carry the same fees and interest rates as ATM cash advances. The advantage is that you can mail the check or deposit it remotely, so you do not have to visit an ATM or bank in person. The disadvantage is that the check takes several business days to clear, so you do not get the cash when ready. Request convenience checks from your issuer's website or by calling the number on your statement.
Understanding the fees and interest you will pay
Your card issuer charges a cash advance fee at the time you withdraw the money. This fee is a percentage of the amount withdrawn — typically 3 to 5 percent, with a minimum of $5 to $10. A $500 cash advance might cost $15 to $25 in fees alone. This fee is added to your balance when ready and is not refundable.
On top of the fee, you pay interest on the cash advance balance. The interest rate for cash advances is usually 2 to 5 percentage points higher than the rate for purchases on the same card. If your purchase APR is 18 percent, your cash advance APR might be 23 percent. Interest accrues daily from the moment you withdraw the cash, even if you have a 0 percent promotional rate on purchases. A $500 cash advance at 23 percent APR costs about $9.58 in interest per month if you do not pay it down.
Your card issuer applies your monthly payment to the lowest-interest balance first — usually purchases before cash advances. This means if you have both purchases and a cash advance balance, your payment goes toward the purchase first, and the cash advance keeps accruing interest. Pay the cash advance balance down as quickly as you can to minimize the total interest.
How a cash advance appears on your credit report and statement
A cash advance shows up on your credit card statement as a separate line item from purchases. It will list the date, the amount, and the fee. The cash advance balance counts toward your total credit card balance and your credit utilization ratio — the percentage of your available credit that you are using. A high utilization ratio can lower your credit score, so a large cash advance may temporarily hurt your score.
The cash advance does not appear as a separate account on your credit report, but it does affect your overall credit utilization. Once you pay it off, the utilization drops and your score can recover. The transaction itself does not flag your account as risky, but if you take frequent cash advances or carry a large balance, it may signal financial stress to lenders.
Alternatives that may cost less
Before you take a cash advance, consider whether another option would cost less. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee, so even at the high end, it is often cheaper than a cash advance over time. A payday alternative loan from a credit union caps the fee at $20 and the APR at 28 percent, making it much cheaper than a cash advance for short-term borrowing.
If you have a 0 percent promotional rate on your credit card, you could charge the expense as a purchase instead of a cash advance and avoid the cash advance fee and higher interest rate entirely. If you need cash to pay a bill, some billers accept credit card payments directly, which avoids the cash advance altogether. Check whether the merchant or service you are paying accepts card payments before you go to the ATM.
Frequently Asked Questions
Can I take a cash advance if I have a 0 percent promotional rate?
No. The 0 percent rate applies only to purchases, not cash advances. Cash advances are charged the regular cash advance APR from day one, even if you have an active 0 percent promotional period. This is one reason cash advances are so expensive — you cannot use a promotional rate to avoid interest.
What happens if I do not pay back a cash advance?
The balance stays on your credit card and accrues interest every day. If you miss a payment, your card issuer may charge a late fee and report the missed payment to the credit bureaus, which will lower your credit score. If the balance goes unpaid for 180 days, the issuer may charge off the account and sell the debt to a collection agency.
Can I transfer a cash advance balance to another card?
Most balance transfer offers exclude cash advances. Even if you transfer the balance, it will be treated as a new cash advance on the new card, subject to the new card's cash advance fee and APR. Balance transfers are designed for purchases, not cash advances, so this strategy usually does not save money.
Is there a limit to how much cash I can advance?
Yes. Your card issuer sets a cash advance limit, which is usually lower than your total credit limit — often 20 to 50 percent of your available credit. You can find your cash advance limit in your online account or by calling the number on your card. If you try to withdraw more than your limit, the ATM or teller will decline the transaction.
Does a cash advance count toward my credit limit?
Yes. The cash advance amount is deducted from your available credit when ready. If your credit limit is $5,000 and you take a $1,000 cash advance, your available credit drops to $4,000. Once you pay off the cash advance, your available credit goes back up.