Yes, you can get a cash advance on most credit cards, but it costs significantly more than a regular purchase
A cash advance is a withdrawal of actual cash from your credit card account, treated as a loan rather than a purchase. You can get one at an ATM using your card's PIN, at a bank teller window, or through a cash advance check mailed by your card issuer. The money appears in your account within one to three business days.
The catch is when ready: cash advances charge higher interest rates than purchases, start accruing interest the day you withdraw the money (with no grace period), and often include an upfront fee. A $500 cash advance can cost you $15 to $25 in fees alone, plus interest that begins accumulating before you even leave the ATM.
Most people use cash advances when they need physical cash and have no other way to get it — a medical bill that requires a check, a car repair a mechanic won't put on a card, or an emergency when their bank is closed. It is a tool for a specific situation, not a regular borrowing method.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than purchases, with interest starting when ready.
- You can withdraw cash at an ATM, a bank branch, or request a cash advance check from your card issuer.
- The interest rate for cash advances is typically 5 to 10 percentage points higher than your purchase APR and varies by card and issuer.
- Paying off a cash advance should be your priority because the interest cost grows quickly, especially on larger amounts.
What the fees and interest actually cost
Every cash advance comes with two separate charges. The cash advance fee is a percentage of the amount you withdraw — typically 3 to 5 percent, with a minimum of $2 to $10. A $300 withdrawal costs $9 to $15 in fees alone. Some cards cap the fee at a maximum amount, but most do not.
The cash advance APR (annual percentage rate) is the interest rate applied to the balance. This rate is almost always higher than your purchase APR. If your card charges 18 percent on purchases, the cash advance rate might be 24 or 28 percent. The issuer sets this rate when they approve your card, and it does not change based on your credit score or payment history — it is fixed to the card itself.
Interest starts accruing the moment you withdraw the cash. Unlike purchases, which have a grace period (usually 21 to 25 days before interest kicks in), cash advances begin charging interest when ready. On a $500 advance at 25 percent APR, you owe roughly $3.42 in interest per day. After 30 days, that is over $100 in interest charges on top of the initial fee.
Your card issuer applies your monthly payment to the lowest-interest balance first — usually purchases before cash advances. This means if you have both a purchase balance and a cash advance balance, your payment reduces the purchase balance while the cash advance keeps accruing interest at the higher rate.
Where to get a cash advance and how long it takes
You have three main options. An ATM withdrawal is the fastest: insert your card, enter your PIN, and withdraw cash. The money is in your account when ready, though your card issuer may take one business day to post the transaction. ATMs charge a fee for the withdrawal itself (usually $2 to $5) on top of your card issuer's cash advance fee.
A bank teller withdrawal works at any bank or credit union branch, even if it is not your own bank. Bring your credit card and a photo ID. The teller processes the transaction on the spot, and you walk out with cash. There is no ATM fee, only your card issuer's cash advance fee. This is usually the cheapest method if a bank branch is nearby.
A cash advance check is a physical check mailed by your card issuer that you can deposit or cash. You request it by calling the issuer or logging into your online account. The check arrives in 5 to 10 business days. This method is useful if you need to pay a bill by check but do not have the funds, though the delay makes it impractical for emergencies.
Your card issuer sets a cash advance limit separate from your credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your card agreement or call the issuer to find out your limit before you try to withdraw.
How a cash advance affects your credit and debt payoff
A cash advance does not directly hurt your credit score, but it increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 limit and take a $1,500 cash advance, your utilization jumps to 30 percent. High utilization can lower your score by 10 to 50 points, depending on your current score and how much you are using.
The real damage comes from the cost. Because interest starts when ready and the rate is high, a cash advance balance grows faster than a purchase balance. A $500 cash advance at 25 percent APR costs you $125 in interest over one year if you make no payments. If you make only minimum payments, you could spend two to three years paying it off while interest compounds.
If you have both a purchase balance and a cash advance balance, your monthly payment reduces the purchase balance first. This means the cash advance sits at the higher interest rate longer, costing you more overall. The only way to change this is to pay the cash advance balance in full before making other payments.
Alternatives to a cash advance
If you need cash but want to avoid the high cost, consider these options first. A personal loan from a bank or credit union typically charges 8 to 15 percent APR with no upfront fee. The interest is lower, and you know exactly how long you will pay. You can often get approved and funded within one to three business days.
A payday loan is fast (same day in many cases) but expensive — typically $15 to $20 per $100 borrowed, which equals 400 percent APR or higher. This is worse than a cash advance and should be a last resort.
A 0 percent balance transfer from another card does not give you cash, but if you need to move a balance to a lower rate, it can save money. The introductory rate lasts 6 to 21 months depending on the card, though there is usually a 3 to 5 percent transfer fee.
Borrowing from family or friends, if possible, costs nothing and has no interest. Asking your employer for an advance on your paycheck is also interest-free, though not all employers offer it.
When a cash advance makes sense
A cash advance is reasonable when you need physical cash for something you cannot pay with a card, and you have no other option. Examples: a medical procedure that requires a check, a car repair a mechanic will not put on plastic, or an emergency when your bank is closed and you need cash when ready.
It makes less sense if you are taking a cash advance to pay another bill, cover everyday expenses, or fund a purchase you could make with the card itself. In those cases, you are paying extra fees and interest for no benefit.
If you do take a cash advance, treat it as an emergency debt. Pay it off as quickly as possible, before you make other payments or purchases. The longer it sits, the more interest you pay.
Frequently Asked Questions
Can I take a cash advance if I have a 0 percent introductory APR on my card?
No. The 0 percent rate applies only to purchases. Cash advances are charged the card's regular cash advance APR from day one, even if you have an active 0 percent purchase promotion. This is one reason cash advances are expensive — you never get a break on the interest rate.
What happens if I do not pay back a cash advance?
It becomes part of your credit card balance and is reported to the credit bureaus. If you miss payments, your credit score drops, and the issuer may charge late fees and increase your APR. After 180 days of non-payment, the account is typically charged off and may be sent to a collection agency.
Can I get a cash advance from a credit card I just opened?
Usually yes, but your cash advance limit may be lower than your purchase limit. Some issuers set a $500 or $1,000 cash advance limit on new accounts. Call the issuer to confirm your limit before you try to withdraw.
Is there a way to avoid the cash advance fee?
No. The fee is built into every cash advance and cannot be waived. Some cards advertise "no cash advance fee," but these are rare and usually charge a higher interest rate instead. The total cost is similar either way.
Should I use a credit card cash advance or a payday loan?
A credit card cash advance is usually cheaper. Payday loans charge 400 percent APR or higher, while cash advances typically cost 24 to 28 percent. Both are expensive, but a cash advance is the better choice if you have a credit card available.