Yes, you can draw cash from your credit card, but it works differently than a debit card and costs more
A cash advance is when you use your credit card to withdraw money from an ATM or ask a bank teller for cash. The money comes from your credit line, not a separate account. You are borrowing against your credit card balance, and the card issuer charges you fees and interest for doing it.
The key difference from a regular purchase: cash advances start charging interest when ready. There is no grace period. A purchase you make on your credit card might not charge interest if you pay it off by the due date, but a cash advance begins accruing interest the day you withdraw it.
Most people use cash advances when they need physical money and have no other way to get it. But because of the fees and high interest rates, it is usually the most expensive way to borrow on a credit card.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus interest that starts right away, with no grace period like regular purchases have.
- The interest rate on a cash advance is often higher than the rate on regular purchases, sometimes by several percentage points.
- You can withdraw cash at an ATM using your credit card PIN, or visit a bank branch and ask a teller for a cash advance.
- The amount you can withdraw is limited by your credit card's cash advance limit, which is usually lower than your total credit limit.
- If you need cash, a personal loan or a cash-back option at a store checkout usually costs less than a credit card cash advance.
How much it costs to take a cash advance
When you take a cash advance, you pay two things: a fee upfront and interest on the balance.
The cash advance fee is charged when you withdraw the money. Most credit card issuers charge between 3 and 5 percent of the amount you withdraw. Some cards charge a flat fee instead (for example, $10 per advance), and you pay whichever is higher. If you withdraw $500 and your card charges 4 percent, you pay $20 in fees when ready. That $20 is added to your balance.
The interest rate on a cash advance is separate from the rate on regular purchases. It is almost always higher — often 2 to 3 percentage points above your regular purchase rate. If your card charges 18 percent APR on purchases, the cash advance rate might be 21 or 22 percent. Interest starts accruing the day you withdraw the money, with no grace period.
Because of the fee plus the high interest rate, a $500 cash advance can cost you $50 to $100 or more if you take several months to pay it back.
Where you can withdraw cash and what limits explore
You have two main ways to get a cash advance. The first is to use an ATM: insert your credit card, enter your PIN, and select "cash advance" or "withdrawal." The ATM will dispense cash and charge the fee when ready.
The second is to visit a bank branch — yours or any bank that accepts your card — and ask a teller for a cash advance. You hand over your card and ID, and they give you cash and a receipt showing the fee.
Your credit card has a cash advance limit, which is separate from your overall credit limit. If your credit limit is $5,000, your cash advance limit might be $1,500 or $2,000. Your card issuer sets this limit based on your credit history and account. You can call the customer service number on the back of your card to find out what your cash advance limit is.
Some ATMs charge an additional fee on top of your card issuer's fee — usually $2 to $4. If you use an out-of-network ATM (one that does not belong to your bank), the fee is often higher. Always check the ATM screen before you confirm the withdrawal; it will show you the total fee.
How a cash advance affects your credit score
Taking a cash advance does not directly hurt your credit score, but it can indirectly. The cash advance adds to your credit card balance, which increases your credit utilization ratio — the percentage of your available credit that you are using. If you use a large portion of your credit limit, your score may drop slightly.
The bigger risk is that the high interest rate makes it straightforward to carry a balance month to month. If you do not pay off the cash advance quickly, the interest charges pile up, and you end up paying much more than you borrowed. A high balance also keeps your utilization ratio high, which continues to weigh on your score.
Paying off a cash advance as fast as possible protects both your score and your wallet.
Cheaper ways to get cash when you need it
Before you take a cash advance, consider these alternatives, which usually cost less.
Cash back at checkout: When you buy something at a store, you can ask the cashier for cash back. You pay with your debit card or credit card, and they give you cash along with your receipt. There is no fee for this, and if you use a credit card, you get the same grace period as a regular purchase (no interest if you pay the balance by the due date).
Personal loan: If you need a larger amount, a personal loan from a bank or credit union often has a lower interest rate than a credit card cash advance. The loan is a fixed amount with a set repayment schedule, so you know exactly what you owe and when. Personal loans do charge origination fees, but the total cost is usually less than a cash advance.
Borrow from family or friends: If possible, borrowing from someone you know avoids fees and interest altogether. Put the agreement in writing so there is no confusion about repayment.
Paycheck advance: Some employers offer paycheck advances or loans against future wages. Check with your HR department to see if your workplace offers this.
What happens if you cannot pay back a cash advance
If you do not pay off a cash advance, the interest keeps growing and the balance gets harder to pay. Credit card companies prioritize cash advances differently than regular purchases when you make a payment — they often explore your payment to the lowest-interest balance first, which means the high-interest cash advance sits and grows.
If your balance stays unpaid for several months, your card issuer may report the debt to credit bureaus, which damages your credit score. Eventually, if the debt goes unpaid long enough, the card issuer may close your account or send the debt to a collection agency.
If you are struggling to pay back a cash advance, contact your card issuer as soon as possible. Some issuers offer hardship programs that lower your interest rate or pause payments temporarily. It is better to reach out before you miss a payment than to wait.
Frequently Asked Questions
Can I take a cash advance if I have a low credit limit?
Your cash advance limit is usually much lower than your total credit limit — sometimes 25 to 50 percent of it. Even if your credit limit is high, your cash advance limit might only be $500 or $1,000. Call your card issuer to find out your specific limit.
Do I have to use my PIN to get a cash advance?
At an ATM, yes — you need your PIN to withdraw cash. At a bank branch, you do not need a PIN; you just show your card and ID. If you do not have a PIN set up, you can call your card issuer to create one.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a fee plus interest. A balance transfer moves debt from one card to another and usually has a lower fee and interest rate. Balance transfers are meant for moving existing debt, not for getting cash.
Will taking a cash advance hurt my credit score right away?
Not when ready, but it can lower your score within a few weeks because it increases your credit utilization. The bigger damage happens if you carry the balance for months — the high interest makes it hard to pay off, and a high balance keeps your score down.
Can I take a cash advance from a credit card I just opened?
Most card issuers set a cash advance limit when they open your account, even if it is low. You can usually take an advance right away, but call to confirm your limit first. Some cards designed for people rebuilding credit have very low or no cash advance option.