Yes, you can take cash out from a credit card, but it costs more than a regular purchase
Most credit card issuers let you withdraw cash using your card at an ATM or by asking a bank teller for a cash advance. The transaction itself takes minutes. But unlike swiping your card at a store, a cash advance charges you fees upfront and starts charging interest when ready — there is no grace period like there is for purchases. You will pay more money this way than if you borrowed the same amount through other means.
The cost breaks down into three parts: a one-time fee (usually 3 to 5 percent of the amount you withdraw), a higher interest rate than your purchase rate, and interest that starts accruing the day you take the cash. If you need cash urgently, it works. If you have other options, they are almost always cheaper.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent of the amount withdrawn, plus a higher interest rate than your regular purchase rate.
- Interest on a cash advance begins when ready with no grace period, so you pay interest every single day until the balance is paid off.
- 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.
- If you need cash regularly, a debit card, personal loan, or line of credit will cost you far less than repeated credit card cash advances.
How the fees and interest work on a cash advance
When you take a cash advance, your credit card issuer charges you a cash advance fee right away. This fee is a percentage of the amount you withdraw — typically 3 to 5 percent, though some cards charge a flat minimum (like $5 or $10) if the percentage would be smaller. A $200 withdrawal at 5 percent costs you $10 in fees before you even leave the ATM.
The interest rate on cash advances is separate from your purchase rate and is almost always higher. If your card charges 18 percent APR on purchases, the cash advance rate might be 24 or 28 percent. This rate applies to the full amount you withdrew, and it starts the moment you take the cash — not at the end of the billing cycle like purchase interest does. You pay interest every day until the balance is gone.
Because there is no grace period, even a small cash advance becomes expensive fast. A $300 advance at 25 percent APR costs about $6.25 in interest per month if you do not pay it back. If you carry it for three months, you have paid roughly $18.75 in interest alone, plus the original fee.
Where and how to take a cash advance
You have two main ways to get cash from your credit card. The first is to use an ATM: insert your card, enter your PIN (which you may need to set up if you have never done this before), select "cash advance" or "withdrawal," and take the cash. Not all ATMs accept credit cards for cash advances — most that do are at bank branches or in-network ATMs for your card issuer. Using an out-of-network ATM may add an extra fee on top of the cash advance fee.
The second way is to visit a bank branch in person and ask a teller for a cash advance. You hand them your credit card and ID, tell them how much cash you need, and they process it on the spot. This method is slower than an ATM but guarantees the transaction will go through, and you can ask the teller questions about fees or your account.
Before you do either, call the customer service number on the back of your card or log into your online account to find out your cash advance limit. This limit is often lower than your credit limit — you might have a $5,000 credit limit but only a $1,000 cash advance limit. Your issuer sets this limit to manage risk.
Why cash advances are expensive compared to other borrowing
A credit card cash advance is one of the most expensive ways to borrow money. To see why, compare it to other options. A personal loan from a bank or credit union typically charges 6 to 36 percent APR depending on your credit, and you pay no upfront fee. A line of credit works similarly. Even a payday loan, which has a terrible reputation, often costs less per dollar borrowed than a credit card cash advance when you factor in both the fee and the interest rate.
The reason credit card companies charge so much is that cash advances are riskier for them — they have no way to track where the money goes or whether you will pay it back. With a purchase, the merchant confirms the transaction. With cash, you walk away with the money and they have no recourse. They price that risk into the fee and rate.
If you need cash regularly, the math strongly favors getting a debit card linked to a checking account, which lets you withdraw cash free at any ATM in your bank's network. If you need to borrow money, a personal loan or credit union line of credit will cost you a fraction of what a credit card cash advance costs over time.
How a cash advance affects your credit score
Taking a cash advance does not directly hurt your credit score the way a late payment does. However, it does increase your credit utilization — the percentage of your available credit that you are using. If you have a $5,000 limit and take a $1,000 cash advance, your utilization jumps to 20 percent. Credit scoring models treat high utilization as a sign of financial stress, so your score may drop a few points.
The bigger risk is what happens if you cannot pay the cash advance back quickly. If you miss a payment or carry the balance for months, the missed payment will show on your credit report and damage your score much more than the advance itself. The interest charges also make it harder to pay off, which extends the damage.
Paying back a cash advance faster
Credit card issuers explore your payments to different parts of your balance in a specific order set by law. Payments go first to the balance with the highest interest rate — which is usually your cash advance. This is actually good news: if you make extra payments, most of that money goes toward the cash advance rather than your lower-rate purchases.
The fastest way to clear a cash advance is to pay more than the minimum payment each month. Even an extra $20 or $30 per month cuts weeks off the payoff timeline and saves you significant interest. Use an online calculator to see how much interest you will pay at different payment levels — seeing the number often motivates people to pay faster.
If you have taken multiple cash advances or are carrying a large balance, consider whether you can pay it off with money from savings, a bonus, or a side income source. The interest rate is high enough that even a small lump-sum payment saves real money compared to paying the minimum.
When a cash advance might make sense
Cash advances are expensive, but there are rare situations where they are the least bad option. If you have an emergency that requires cash when ready — a car repair, a medical bill, a security deposit — and you have no other way to get the money, a cash advance is faster than waiting for a personal loan to be approved. You get the cash in minutes instead of days.
Another scenario is if you are in a situation where you would otherwise use a payday loan or title loan. Those are far more expensive than a credit card cash advance. If you must borrow, the credit card is the cheaper choice. But this should be a last resort, not a regular habit.
For everyday cash needs, there are always better options. A debit card, a line of credit, or even asking an employer for an advance on your paycheck costs less and does not damage your credit the way repeated cash advances do.
Frequently Asked Questions
Does taking a cash advance hurt my credit score right away?
Not when ready, but it can lower your score within days because it raises your credit utilization. The bigger damage comes if you miss payments or carry the balance for months. A single cash advance that you pay back quickly has minimal impact.
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a bad idea. You are borrowing at 25+ percent interest to pay off a balance that might be at 18 percent. You end up paying more interest overall, and you have now increased your total debt instead of reducing it. Pay the original card directly instead.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another (usually at a lower rate for a set period). A cash advance is borrowing new money against your credit limit. Balance transfers have their own fees but no interest rate during the promotional period. Cash advances charge interest when ready.
Can I get a cash advance if my credit is bad?
If you have a credit card, you can take a cash advance up to your cash advance limit regardless of your credit score. The limit was set when you opened the account. However, if your card has been closed or you have no credit card, you cannot get a cash advance.
Is there a way to avoid the cash advance fee?
No. The fee is built into the cash advance product and applies every time you withdraw cash using your credit card. The only way to avoid it is to not take a cash advance. Using a debit card or asking for a personal loan avoids the fee entirely.