Getting cash from a credit card costs more than you think
You can withdraw cash from a credit card at an ATM, through a bank teller, or by using a cash advance check — but each method charges a fee and starts charging interest when ready. There is no grace period like there is with purchases. A cash advance is treated as a loan from the moment you take it, not as a purchase, so interest accrues daily from day one.
The cost of withdrawing $200 in cash can easily be $10 to $15 in fees alone, plus interest that compounds daily. For most people, this is an expensive way to get cash. Understanding the real cost before you do it — and knowing the alternatives — matters more than knowing which ATM to use.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, with no grace period.
- You can withdraw cash at an ATM using your credit card PIN, through a bank teller, or by depositing a cash advance check at your bank.
- Interest starts accruing the day you withdraw the cash, not at the end of the billing cycle like it does for purchases.
- If you need cash urgently, a personal loan, payday loan alternative, or borrowing from family usually costs less than a credit card cash advance.
How cash advances work and what they cost
When you take a cash advance on a credit card, your card issuer treats it as a short-term loan. You pay three separate costs: a cash advance fee, a higher interest rate, and daily interest that starts when ready.
The cash advance fee is typically 3 to 5 percent of the amount you withdraw, with a minimum fee of $5 to $10. So withdrawing $100 costs at least $5 to $10 in fees alone. The interest rate on cash advances is usually 2 to 3 percentage points higher than your regular purchase APR — if your purchase rate is 18 percent, your cash advance rate might be 21 percent. Unlike purchases, there is no grace period; interest begins accruing the day you withdraw the money.
If you withdraw $500 at a 21 percent APR with a 4 percent fee, you pay $20 upfront in fees plus roughly $2.88 in interest for the first month if you make no payment. The total cost to borrow $500 for 30 days is about $23, or roughly 4.6 percent of the amount borrowed.
Three ways to withdraw cash from a credit card
ATM withdrawal is the most common method. Insert your credit card into an ATM, enter your PIN (which you may need to set up with your card issuer if you have not used it before), and withdraw cash up to your daily limit. Your card issuer sets this limit, which is often lower than your credit limit — sometimes $500 to $1,000 per day. The ATM may charge an additional operator fee of $2 to $3 on top of your card issuer's cash advance fee.
Bank teller withdrawal works if you have a credit card issued by a bank where you also have a checking or savings account. Walk into a branch, give the teller your credit card, and ask for a cash advance. You can usually withdraw more this way than at an ATM, and you avoid ATM operator fees. The card issuer's cash advance fee still applies.
Cash advance checks come in the mail from your card issuer or are available through your online account. You write a check against your credit line, deposit it into your bank account, and the funds appear as a cash advance on your credit card statement. This method avoids ATM fees but still charges the cash advance fee and the higher interest rate. Some issuers offer a lower fee or promotional rate for checks, so read the terms before using one.
Why cash advances are expensive compared to alternatives
A credit card cash advance is one of the most expensive ways to borrow money. A personal loan from a bank or credit union typically charges 6 to 36 percent APR depending on your credit score, and you pay no upfront fee. Even if you may have access to for a higher rate, you avoid the 3 to 5 percent cash advance fee and the grace period does not matter because you are paying interest on a loan, not a purchase.
A payday loan alternative — such as a credit union payday loan or a paycheck advance from your employer — may charge a flat fee of $15 to $30 per $100 borrowed, which sounds high but is often lower than the combined cost of a cash advance fee plus one month of interest. Borrowing from family or friends costs nothing if they agree to it.
If you need cash for an emergency and have no other option, a cash advance may be the fastest way to get it. But if you have time to explore other routes, they almost always cost less.
How to minimize the cost if you must take a cash advance
If you decide a cash advance is necessary, take the smallest amount you actually need and pay it back as fast as possible. Every day the balance sits on your card, interest accrues at the higher cash advance rate. Paying back $500 in one week instead of one month saves you roughly $12 in interest.
Check whether your card issuer offers any promotional rates on cash advances — some cards marketed to people with fair credit offer a 0 percent APR period on cash advances for the first 30 to 60 days. Read the fine print: the fee still applies, but at least the interest does not compound during the promotional period.
Do not use a cash advance to pay off another debt unless the interest rate on that debt is higher than your cash advance rate plus the fee. For example, if you owe $500 on a credit card at 25 percent APR and you take a cash advance at 21 percent APR plus a 4 percent fee, you are paying 25 percent in interest either way, but the cash advance costs you $20 upfront. You would be worse off.
What happens to your credit score when you take a cash advance
A cash advance does not directly damage your credit score the way a missed payment does, but it can indirectly harm it. The cash advance increases your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 credit limit and you take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization can lower your score by 10 to 50 points depending on how high it goes.
The damage is temporary. Once you pay off the cash advance, your utilization drops and your score recovers. But if you carry the balance for months, the high utilization keeps dragging your score down, and the interest you pay compounds the financial damage.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Yes, but it is almost never worth it. You pay a 3 to 5 percent fee upfront, plus a higher interest rate, and you gain nothing because both cards charge interest. The only exception is if the card you are paying off has a much higher interest rate and you can pay off the cash advance in a few weeks.
What is the daily limit for cash advances?
Your card issuer sets a daily cash advance limit, which is often $500 to $1,000 per day but varies by card and by your account history. Check your card's terms or call the issuer to find out your specific limit. The limit is separate from your credit limit.
Do I need a PIN to withdraw cash from a credit card?
Yes, for ATM withdrawals. If you have never set a PIN, contact your card issuer to create one before you go to the ATM. Bank teller withdrawals and cash advance checks do not require a PIN.
How long does it take for a cash advance to show up on my statement?
ATM and teller withdrawals appear on your statement within one to three business days. Cash advance checks may take longer — up to a week — depending on how long it takes your bank to process the deposit and your card issuer to post it.
Can I get a cash advance if I am maxed out on my credit card?
No. Your cash advance limit is part of your total credit limit, not separate from it. If you have used your entire credit limit, you cannot take a cash advance unless you pay down the balance first.