Taking cash from a credit card costs more than you think
You can withdraw cash from a credit card at an ATM, but it is not the same as using your debit card. The moment you take out cash, your card issuer charges you a cash advance fee — usually 3% to 5% of the amount withdrawn, with a minimum of $5 to $10. You also start paying interest when ready, often at a higher rate than your regular purchase APR. There is no grace period. If you withdraw $500, you might pay $15 to $25 in fees alone, plus interest that begins accruing the next day.
Most people who need cash from a credit card are in a tight spot financially. Before you do this, consider whether a personal loan, a line of credit from your bank, or even a cash advance from your employer would cost less. A credit card cash advance should be a last resort, not a convenience.
Key Takeaways
- Cash advances charge a separate fee (3–5% of the amount) plus a higher interest rate than purchases, with no grace period.
- You can withdraw cash at any ATM that displays your card's logo, but your daily limit is usually lower than your credit limit.
- Interest starts accruing the day you withdraw the cash, not at the end of your billing cycle like a purchase.
- Some credit cards offer 0% introductory rates on purchases but never on cash advances.
- Paying back a cash advance should be your first priority because the interest rate is typically 5–10 percentage points higher than your purchase rate.
How to physically withdraw cash from an ATM
To take out cash, insert your credit card into any ATM that displays your card's logo (Visa, Mastercard, American Express, or Discover). Enter your PIN — the same one you use for debit transactions. Select "cash withdrawal" or "cash advance" from the menu. The ATM will show you your available cash advance limit, which is often much lower than your total credit limit. Choose your amount and complete the transaction.
Your card issuer sets a separate cash advance limit, often 20% to 50% of your credit limit. If your credit limit is $5,000, your cash advance limit might be only $1,000. You can call your card issuer to ask what your cash advance limit is before you go to the ATM, or you can check your online account or mobile app — most issuers display it there.
Not all ATMs accept credit cards. Bank ATMs usually do. Convenience store and airport ATMs sometimes charge an additional surcharge on top of your card issuer's fee. A $3 ATM fee plus a $15 cash advance fee on a $300 withdrawal adds up quickly.
Fees and interest rates you will pay
A cash advance triggers three separate costs. First, the cash advance fee is charged when ready — typically 3% to 5% of the amount withdrawn, with a minimum fee of $5 to $10. Second, you pay an ATM operator fee if you use an out-of-network machine, usually $2 to $3. Third, interest accrues from the day of withdrawal at a rate that varies by card but is almost always higher than your purchase APR.
The interest rate difference matters. If your purchase APR is 18%, your cash advance APR might be 24% or 28%. On a $500 cash advance, that extra 6 to 10 percentage points costs you real money. If you carry the balance for three months, the higher rate alone could add $30 to $50 in interest.
Unlike a purchase, there is no grace period. Interest begins accruing the day you withdraw the cash. If you make a purchase on your credit card, you typically have 21 to 25 days before interest kicks in. A cash advance has zero days of grace.
Your daily and monthly limits
Your card issuer sets a cash advance limit separate from your credit limit. This limit is often 20% to 50% of your total credit limit, but it varies by card and by your creditworthiness. A $10,000 credit limit might come with a $2,000 cash advance limit.
You also face a daily withdrawal limit, usually $500 to $1,000 per day, though this also varies by issuer. If you need $2,000 in cash, you may have to make multiple withdrawals over several days. Some issuers allow you to request a temporary increase to your daily limit, but this takes time and is not always granted.
Check your card's terms or call your issuer to find out both your cash advance limit and your daily ATM withdrawal limit. This information is also usually available in your online account dashboard.
When a cash advance makes sense (and when it does not)
A cash advance makes sense only in genuine emergencies where you have no other option and you can pay it back within days. Examples: your car breaks down and you need cash for a repair, or you are traveling and your debit card is lost. In these cases, the fee and interest are worth the when ready access to cash.
A cash advance does not make sense if you are using it to pay bills, cover regular expenses, or fund a purchase you cannot otherwise afford. If you are carrying a balance on your credit card already, taking a cash advance at a higher interest rate will only deepen your debt. If you need ongoing cash flow, a personal loan or a line of credit from your bank will almost always be cheaper.
If you do take a cash advance, treat it as an emergency debt. Pay it off before you make any other credit card payments. The interest rate is too high to carry for more than a few days.
Alternatives that cost less
Before you use a credit card cash advance, explore these options:
- Personal loan from a bank or credit union: Interest rates are typically 6% to 36%, which is lower than a cash advance rate. You get a fixed repayment schedule and no daily interest accrual.
- Line of credit: Many banks offer personal lines of credit with interest rates lower than credit card cash advances. You draw only what you need and pay interest only on what you use.
- Employer cash advance: Some employers offer paycheck advances with no fee or interest. Ask your HR department whether this is available to you.
- Borrowing from family or friends: If possible, this is usually the cheapest option — often interest-free.
- Selling something: If you have items you no longer need, selling them online can raise cash without debt.
- Delaying the expense: If the expense is not truly urgent, waiting until your next paycheck or your next billing cycle may be the best choice.
How to pay back a cash advance quickly
If you have taken a cash advance, your priority is to pay it back as fast as possible. Credit card issuers typically explore your payments to the lowest-interest debt first — usually your purchases — and leave the cash advance balance untouched. To pay off the cash advance faster, contact your issuer and ask how to direct a payment specifically to the cash advance portion of your balance. Some issuers allow you to do this online or by phone.
Do not make new purchases on the card while you are paying off the cash advance. Every dollar you spend on a new purchase delays the payoff of the higher-interest cash advance. If you need to use the card, wait until the cash advance is gone.
Calculate the total cost before you take the advance. A $500 cash advance with a 4% fee ($20) plus interest at 25% APR for one month costs about $30 in total fees and interest. If you can pay it back in one week, the interest is much lower. The longer you carry it, the more it costs.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You are paying a cash advance fee and a higher interest rate to move debt from one card to another. A balance transfer — moving the balance directly from one card to another without taking cash out — is cheaper if both cards allow it. Some cards offer 0% introductory rates on balance transfers, which cash advances never get.
What happens if I do not pay back the cash advance?
The balance stays on your credit card and accrues interest at your cash advance rate. If you miss payments, your credit score drops and late fees are added. The debt can be reported to collection agencies if it goes unpaid long enough. Unlike a personal loan, there is no collateral, but the damage to your credit is real and lasting.
Is there a difference between a cash advance and a balance transfer?
Yes. A balance transfer moves debt from one card to another without taking cash out. A cash advance withdraws actual cash. Balance transfers sometimes come with 0% introductory rates; cash advances never do. Balance transfer fees are usually lower (1–3%) than cash advance fees (3–5%). If you need to move debt, a balance transfer is almost always cheaper.
Can I take a cash advance from a secured credit card?
Yes, most secured cards allow cash advances, though your cash advance limit is usually lower than on unsecured cards. The fees and interest rates are the same. If you are building credit with a secured card, a cash advance is especially expensive because you are already paying an annual fee for the card itself.
Will a cash advance hurt my credit score?
Not directly. Taking a cash advance does not appear on your credit report as a separate transaction. However, if the cash advance increases your credit utilization ratio — the percentage of your total credit limit you are using — your score may drop slightly. Paying it off quickly will restore your score.