You can withdraw cash from a credit card, but it costs more than a regular purchase and counts as a loan you repay with interest
A cash advance is a withdrawal of money from your credit card account. Unlike a purchase, which is charged to your card and paid back on your statement, a cash advance is treated as a short-term loan. The card issuer charges you a fee upfront (usually 3 to 5 percent of the amount withdrawn) and begins charging interest when ready — often at a higher rate than your purchase APR. There is no grace period. Interest starts accruing the day you withdraw the cash.
You can withdraw cash from a credit card at an ATM, at a bank teller window, or sometimes through a convenience store or casino. The method you choose affects the fee structure and how quickly the money appears in your account. Most people use this option only when they have no other way to get cash, because the cost is high and the debt grows fast.
Key Takeaways
- Cash advances charge a separate fee (typically 3 to 5 percent) plus a higher interest rate than purchases, with no grace period.
- You can withdraw cash at an ATM using your credit card PIN, at a bank teller window, or through some retailers, depending on your card issuer.
- Interest on a cash advance begins accruing when ready and is usually charged at a rate 5 to 10 percentage points higher than your purchase APR.
- Paying back a cash advance should be your priority because the cost compounds quickly; payments go toward purchases first, then cash advances.
How to withdraw cash using your credit card
The most common method is to use an ATM. Insert your credit card, enter your PIN (which you may need to set up if you have never used it), and select the cash advance option. The ATM will show you the fee and the amount available to withdraw. The money is usually available in your account within minutes, though some card issuers delay the transaction by a day.
You can also visit a bank teller window and ask for a cash advance. Bring your credit card and a form of ID. The teller will process the transaction and hand you cash on the spot. This method is slower than an ATM but may have a lower fee if you use your own bank.
Some credit card issuers allow cash advances through convenience stores, grocery stores, or other retailers that have point-of-sale systems. You ask the cashier for a cash advance, provide your card, and receive cash back. This option is less common and depends on your card issuer's partnerships.
Fees and interest rates for cash advances
Every cash advance carries an upfront fee, charged to your card when ready. This fee is typically 3 to 5 percent of the amount withdrawn, with a minimum fee of $5 to $10. If you withdraw $300, you might pay $9 to $15 in fees alone. This fee is added to your credit card balance and must be repaid.
The interest rate on a cash advance is separate from your purchase APR and is almost always higher. While a purchase APR might be 15 to 20 percent, a cash advance APR often runs 20 to 30 percent or more. Interest begins accruing the day you withdraw the cash — there is no grace period. If you withdraw $300 at a 25 percent APR, you owe about $6.25 in interest after one month, on top of the upfront fee.
Your credit card statement will show the cash advance balance separately from purchases. When you make a payment, the card issuer applies it to purchases first, then to the cash advance. This means if you have both purchases and a cash advance on your card, your payment reduces the purchase balance before it touches the cash advance, allowing interest on the advance to grow longer.
Limits on how much you can withdraw
Your card issuer sets a cash advance limit, which is often lower than your credit limit. If your credit limit is $5,000, your cash advance limit might be $1,500 or $2,000. You can find this limit in your cardholder agreement or by calling the card issuer's customer service number on the back of your card.
The cash advance limit is separate from your available credit. If you have $3,000 available to spend but a $1,500 cash advance limit, you can only withdraw $1,500 in cash. Attempting to withdraw more will be declined at the ATM.
When a cash advance makes sense and when it does not
A cash advance is rarely the best option. The fees and interest are high, and the debt grows quickly. However, there are narrow situations where it may be the only option: you need cash when ready, you have no access to a debit account, and you have no other borrowing option available. Even then, you should repay it as fast as possible.
Do not use a cash advance to cover everyday expenses, pay bills, or fund purchases you could make with a debit card or check. Do not use it to gamble, invest, or spend on anything non-essential. The cost will outweigh any benefit within weeks.
If you find yourself regularly needing cash advances, that is a sign your budget is not covering your expenses. The better move is to build an emergency fund, open a checking account if you do not have one, or look for a lower-cost loan option like a credit union personal loan or a line of credit.
How cash advances affect your credit score
A cash advance does not directly hurt your credit score the way a missed payment does, but it can indirectly lower your score. The cash advance increases your credit utilization ratio — the amount of available credit you are using. If your credit limit is $5,000 and you withdraw $1,500 in cash, your utilization jumps to 30 percent. High utilization signals risk to credit scoring models and can lower your score by 10 to 50 points.
The cash advance also appears on your credit report as a separate transaction type, which some lenders view as riskier than a purchase. If you carry the balance for months, the interest and fees compound, making it harder to pay down and keeping your utilization high for longer.
Alternatives to a credit card cash advance
If you need cash urgently, explore these options first. A personal loan from a bank or credit union usually has a lower interest rate and no upfront fee. A payday loan is fast but expensive; it is better than a cash advance only in rare cases. A line of credit from a bank or credit union is cheaper than a cash advance and more flexible than a personal loan. Borrowing from family or friends, if possible, costs nothing and builds no debt.
If you need cash for a specific purchase, ask the merchant whether they accept payment plans or offer financing. Many retailers offer 0 percent interest for 6 to 12 months on large purchases. This is almost always cheaper than a cash advance.
If you do not have a checking account, opening one is faster and cheaper than relying on cash advances. Most banks offer free checking accounts with no minimum balance. Once you have an account, you can withdraw cash at any ATM using your debit card, with no fees or interest.
Frequently Asked Questions
Can I use a credit card to withdraw cash at any ATM?
Most ATMs accept credit cards for cash advances, but some do not. ATMs owned by your card issuer's bank are most likely to accept it. ATMs at other banks may decline the transaction or charge an additional fee. Check your card issuer's website or call the number on your card to find ATMs that accept your card.
What happens if I cannot repay a cash advance?
If you miss a payment, the interest rate may increase, and the missed payment will be reported to credit bureaus, lowering your credit score. If the debt goes unpaid for months, the card issuer may close your account or send the debt to a collection agency. The best move is to contact your card issuer as soon as you know you will be late and ask about hardship options.
Is a cash advance the same as a balance transfer?
No. A cash advance gives you physical cash and charges high fees and interest. A balance transfer moves debt from one card to another, usually at a lower introductory rate. Balance transfers are for existing debt; cash advances create new debt. They are different products with different costs.
Will paying off a cash advance improve my credit score?
Yes, but slowly. Paying off the advance lowers your credit utilization ratio, which will improve your score over time. The improvement is gradual — it may take one to three months to see a meaningful change. Paying on time and keeping your utilization low going forward will continue to build your score.