Yes, you can draw cash from your credit card, but it costs more than a purchase and starts charging interest when ready
Most credit cards let you withdraw cash at an ATM or from a bank teller using your card and PIN. This is called a cash advance. The money goes into your bank account or your hand, not toward a purchase. But cash advances are expensive: they charge a separate fee (usually 3 to 5 percent of the amount), carry a higher interest rate than regular purchases, and begin accruing interest the moment you withdraw the money — there is no grace period like there is for purchases.
The cost difference matters. If you carry a $500 cash advance at 24 percent APR for one month, you pay roughly $10 in interest alone, plus the upfront fee. The same $500 purchase might cost you nothing in interest if you pay it off before the due date. For this reason, a cash advance should be a last resort, not a convenience.
Key Takeaways
- Cash advances charge an upfront fee (typically 3 to 5 percent) and a higher interest rate than purchases, with no grace period.
- You can withdraw cash at an ATM using your credit card PIN, or ask a bank teller to process the advance in person.
- Interest on a cash advance begins accruing when ready, so even a short-term withdrawal becomes expensive quickly.
- Your credit card issuer sets a cash advance limit, which may be lower than your overall credit limit.
- If you need cash regularly, a debit card, personal loan, or line of credit will cost you far less.
How to withdraw cash from your credit card
The mechanics are straightforward. Find an ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover), insert your card, select "cash advance" or "withdraw cash," enter your PIN, and specify the amount. The ATM will dispense the cash and charge it to your credit card account.
Alternatively, you can walk into a bank branch — yours or any bank — and ask the teller for a cash advance. Bring your credit card and ID. The teller will process the transaction and hand you cash. This method works even if you do not have a bank account at that branch, though some banks may charge an additional fee for non-customers.
Your card issuer sets a cash advance limit, which is separate from your credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. Check your card's terms or call the issuer to find out your limit before you try to withdraw.
The fees and interest rates you will pay
Every cash advance carries an upfront fee. Most cards charge between 3 and 5 percent of the amount withdrawn, with a minimum fee (often $5 to $10). A $200 withdrawal at 4 percent costs $8 in fees. A $1,000 withdrawal costs $40. Some cards charge a flat fee instead — say, $10 per advance — which is cheaper for large withdrawals but more expensive for small ones.
The interest rate on a cash advance is almost always higher than the rate on purchases. While a card might charge 18 percent APR on purchases, the cash advance rate could be 24 or 28 percent. This higher rate applies only to the cash advance balance, not to your entire card balance, but it compounds daily.
Unlike purchases, cash advances have no grace period. Interest begins accruing the day you withdraw the money. If you withdraw $500 on the 1st of the month and pay it back on the 15th, you still owe interest for all 15 days. With a purchase, you typically have 21 to 25 days before interest kicks in.
How cash advances affect your credit score
A cash advance itself does not hurt your credit score directly — it is a legitimate transaction. However, it does increase your credit utilization ratio, which is the percentage of your available credit you are using. If you have a $5,000 limit and withdraw a $500 cash advance, your utilization jumps to 10 percent. High utilization (above 30 percent) can lower your score.
The bigger risk is that a cash advance can signal financial stress to lenders. If you are taking cash advances frequently, it may suggest you are struggling to cover expenses, and future lenders may view you as higher risk. This does not show up in your credit report as a separate mark, but the pattern of behavior matters.
If you carry the cash advance balance and miss a payment, that missed payment will be reported to the credit bureaus and will damage your score. So the real credit risk is not the advance itself, but what happens if you cannot pay it back quickly.
Alternatives that cost less
Before you take a cash advance, consider whether another option would be cheaper. A personal loan from a bank or credit union typically charges 8 to 15 percent APR with no upfront fee, making it far cheaper than a cash advance for any amount you plan to carry for more than a few days. You can often get approved and funded within 24 hours.
A line of credit works similarly — you borrow what you need and pay interest only on what you use. Credit unions often offer these at lower rates than banks. If you have a home, a home equity line of credit (HELOC) is usually the cheapest option, though it takes longer to set up.
If you need cash only occasionally, a debit card linked to your bank account lets you withdraw cash at ATMs for free or a small fee (usually $1 to $3), with no interest at all. If you do not have a debit card, most banks will issue one for free.
For small, urgent amounts, asking friends or family, negotiating a payment plan with a creditor, or selling something you own will cost you nothing. These are not always possible, but they are worth considering before you pay 3 to 5 percent upfront plus 24 percent interest.
When a cash advance might make sense
A cash advance is rarely the best choice, but there are narrow situations where it is the least bad option. If you have a true emergency — a car repair you need today, a medical bill due now — and you can pay the cash advance back within a week or two, the total cost might be acceptable. A $300 advance at 4 percent fee plus two weeks of interest at 24 percent APR costs roughly $12 to $15. If the alternative is a late fee, overdraft charge, or missed payment, that might be worth it.
Another scenario: if you are traveling internationally and your debit card does not work, a cash advance from your credit card might be your only option to get local currency. In this case, the fee and interest are the cost of access, not a choice between good and bad options.
Outside of genuine emergencies, a cash advance is a sign that you should rethink your budget or your access to credit. If you are regularly taking cash advances to cover living expenses, you are paying a premium for money you cannot afford, and that pattern will eventually damage both your finances and your credit.
Paying back a cash advance quickly
If you do take a cash advance, pay it back as fast as you can. Interest accrues daily, so every day you carry the balance costs you money. If you withdrew $500 at 24 percent APR, you owe about $3.29 per day in interest alone. After 30 days, that is nearly $100 in interest on top of the upfront fee.
When you make a payment to your credit card, the issuer applies it to your lowest-interest balance first — usually purchases — and your highest-interest balance last — usually the cash advance. This means your payment might not touch the cash advance at all if you have other balances. To pay down the cash advance faster, call your issuer and ask them to explore your next payment directly to the cash advance balance, or pay more than the minimum.
Some cards let you make a separate payment to the cash advance through their online portal or app. Check your card's website to see if this option is available.
Frequently Asked Questions
Can I take a cash advance if I have a low credit limit?
Your cash advance limit is set separately from your credit limit and is often lower. A $2,000 credit limit might come with only a $500 cash advance limit. Contact your issuer to find out your specific limit. If it is too low, you can ask them to raise it, though they may decline.
What happens if I cannot pay back the cash advance?
The cash advance balance will accrue interest at your card's cash advance rate, and if you miss a payment, it will be reported to the credit bureaus. Your credit score will drop, and the issuer may increase your interest rate on all balances. If the debt goes unpaid long enough, the issuer may close your account or send the debt to a collection agency.
Is there a limit to how much I can withdraw?
Yes. Your issuer sets a cash advance limit, which you can find in your card agreement or by calling customer service. ATMs also have daily withdrawal limits, typically $300 to $500, though you can withdraw more by making multiple transactions or visiting a bank teller.
Do I have to pay the cash advance fee even if I pay it back when ready?
Yes. The fee is charged when you withdraw the money, not when you pay it back. Even if you repay the cash advance the next day, you still owe the upfront fee (usually 3 to 5 percent) plus one day of interest.
Can I use a cash advance to pay another credit card?
Technically yes, but it is a bad idea. You would pay the cash advance fee and interest rate on money you are using to pay another card's interest and fees. You would be paying fees on fees. A personal loan or balance transfer card would be much cheaper.