Yes, you can get cash from your credit card, but it costs more than a regular purchase
A cash advance is when you withdraw money directly from your credit card's credit line at an ATM, bank, or through a convenience check. The cash is yours to use when ready, but the card issuer charges you fees and interest from day one — there is no grace period like there is for purchases. Most people use cash advances only when they have no other option, because the cost adds up fast.
You can take a cash advance up to your card's cash advance limit, which is often lower than your total credit limit. For example, if your card has a $5,000 credit limit, your cash advance limit might be $1,500. You find your specific limit by calling the number on the back of your card or logging into your online account.
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 using your PIN, at a bank teller, or through a convenience check mailed by your card issuer.
- The interest rate on cash advances is typically 5 to 10 percentage points higher than your purchase APR and varies by card and issuer.
- Paying back a cash advance takes longer because payments go to your lowest-interest debt first, so the cash advance interest compounds while you pay off purchases.
- Alternatives like a personal loan, payday loan, or borrowing from family usually cost less unless you have poor credit or need money within hours.
The fees and interest rates that make cash advances expensive
When you take a cash advance, you pay two costs when ready: a cash advance fee and a higher interest rate. The fee is charged as a percentage of the amount you withdraw — typically 3 to 5 percent, though some cards charge a flat fee instead (like $10 minimum). A $500 cash advance with a 4 percent fee costs you $20 right away.
The interest rate on cash advances is separate from your purchase APR and is almost always higher. If your card charges 18 percent APR on purchases, the cash advance rate might be 23 or 24 percent. The issuer starts charging this interest the day you withdraw the money — there is no interest-free period. Interest accrues daily and compounds, meaning you pay interest on the interest if you do not pay it off quickly.
To see your card's specific cash advance fee and APR, check your cardholder agreement (usually available on your issuer's website or by calling customer service). The rates and fees vary by card and by issuer, so comparing before you withdraw is worth the five minutes it takes.
How to take a cash advance and where to do it
You have three main ways to access a cash advance. The easiest is to use an ATM: insert your card, enter your PIN, select "cash advance" or "withdraw," and take out up to your limit. The ATM may charge an additional fee ($2 to $5) on top of your card's cash advance fee, so check the screen before you confirm.
You can also visit a bank teller and ask for a cash advance on your credit card. Bring your card and ID. The teller will process it the same way an ATM does, and you will pay the same fees. This method is useful if you need more cash than an ATM daily limit allows (ATM limits vary but are often $500 to $1,000 per day).
A third option is a convenience check. Your card issuer mails you blank checks that draw from your credit line. You write a check to yourself or to someone else, deposit it, and the amount becomes a cash advance. Convenience checks carry the same fees and interest rates as ATM withdrawals. Some issuers no longer offer them, so ask if yours does.
Why cash advances hurt your credit score and finances
A cash advance affects your credit in two ways. First, it raises your credit utilization ratio — 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. Credit scoring models penalize high utilization, so your score may drop a few points when ready. The impact is temporary if you pay it off quickly, but it sticks around as long as the balance remains.
Second, the high interest rate means the balance grows if you do not pay it in full right away. A $500 cash advance at 24 percent APR costs about $10 in interest per month if you make no payments. More importantly, credit card issuers explore your monthly payment to the lowest-interest debt first — your purchases at 18 percent — before touching the cash advance at 24 percent. This means the cash advance balance sits and compounds while you chip away at purchases, extending the time you carry the debt.
If you carry a cash advance balance for several months, the total cost (fees plus interest) can exceed 15 to 20 percent of the amount you withdrew. A $500 advance can cost $75 to $100 by the time you pay it off.
When a cash advance makes sense versus better alternatives
A cash advance is rarely the cheapest option, but it may be the only fast one in an emergency. If you need cash within hours and have no other source, a cash advance is faster than a personal loan (which takes days to fund) or a payday loan (which requires a trip to a storefront). If you have decent credit and can wait a few days, a personal loan from a bank or credit union usually charges less interest than a cash advance.
A payday loan is another option if you need money fast, but payday loans often charge higher fees than cash advances — sometimes 15 to 30 percent for a two-week loan. That said, if you can repay it within two weeks, a payday loan might cost less than a cash advance you carry for months. Borrowing from family or friends costs nothing if they agree, but it risks the relationship if you cannot repay on time.
Avoid a cash advance if you can use a debit card, a payment plan, or a credit card purchase instead. If you must choose between a cash advance and overdrafting your bank account, the cash advance is usually cheaper — overdraft fees run $25 to $35 per incident, and they stack if multiple transactions overdraw you on the same day.
How to pay off a cash advance faster and minimize the damage
The fastest way to minimize cost is to pay the cash advance balance in full as soon as you can. Every dollar you pay toward the cash advance stops the 24 percent interest from compounding on that dollar. If you took a $500 advance and can pay $250 back within a week, you have cut your interest cost roughly in half.
If you cannot pay it all at once, make a plan to clear it within one or two months. Calculate what you need to pay monthly to reach zero by your important date, and set up automatic payments if your issuer allows it. Paying $250 per month on a $500 advance clears it in two months and costs roughly $20 in interest — much less than carrying it for six months.
While you are paying off the cash advance, avoid taking new cash advances or making large purchases on the same card. New charges will be paid off after the cash advance (because of the payment priority rule), which extends how long you carry the high-interest debt. If you need more money, use a different card or a different source.
Frequently Asked Questions
Can I take a cash advance if I have a low credit limit?
Yes, your cash advance limit is separate from your purchase limit, and it is often lower. If your total limit is $500, your cash advance limit might be $200. Call your issuer to find out your specific cash advance limit — it is not always listed on your statement.
Does a cash advance show up differently on my credit report?
No, a cash advance balance appears as a regular credit card balance on your credit report. It raises your utilization ratio the same way a purchase does. The difference is invisible to credit bureaus — only the interest rate and fees differ.
What happens if I cannot pay back the cash advance?
If you miss a payment, the issuer charges a late fee (usually $25 to $40) and reports the missed payment to credit bureaus after 30 days. Your credit score drops, and the interest rate may increase. If the debt goes unpaid for six months or longer, the issuer may close your account or send the debt to a collection agency.
Can I transfer a cash advance balance to a different card?
Most balance transfer offers exclude cash advances — they only explore to purchases. Even if a transfer is possible, you would pay a balance transfer fee (usually 3 to 5 percent) on top of the cash advance fee you already paid. It is rarely worth it unless the new card has a much lower interest rate and a long 0 percent promotional period.
Is there a way to avoid the cash advance fee?
No. The fee is charged by your card issuer and is non-negotiable. Some cards marketed to people with poor credit charge higher fees (5 to 10 percent), while premium cards may charge lower fees (2 to 3 percent), but all cards charge something. The only way to avoid the fee is to not take a cash advance.