Yes, you can take cash out of your credit card, but it is not the same as using it to buy something
Most credit cards let you withdraw cash at an ATM or get cash back at a store checkout. The card issuer treats this as a cash advance — a short-term loan separate from your regular credit line. The moment you take the cash, interest starts accruing at a rate higher than your purchase APR, and you pay a fee upfront. No grace period applies, unlike a purchase you make with the card.
The cost difference is significant. If your card charges 18% APR on purchases but 24% on cash advances, plus a 3% cash advance fee, you are paying roughly 27% in the first month alone. For that reason, taking cash from a credit card should be a last resort, not a convenience.
Key Takeaways
- Cash advances charge a separate, higher interest rate than purchases, with no grace period — interest begins the day you withdraw.
- You pay an upfront fee, usually 3% to 5% of the amount withdrawn, on top of the higher interest rate.
- You can withdraw cash at ATMs using your PIN, at bank teller windows, or by requesting cash back at a store, depending on your card.
- The total cost of a cash advance can exceed 25% to 30% annually, making it far more expensive than a personal loan or overdraft protection.
- Paying back the cash advance should be your first priority, because interest compounds daily and the debt does not benefit from any promotional rates.
How much it costs to take cash from your credit card
The fee structure for a cash advance has two parts: an upfront fee and a higher interest rate. The upfront fee is usually 3% to 5% of the amount you withdraw — so a $500 cash advance costs $15 to $25 before you even use the money. Some cards cap the fee at a minimum dollar amount (for example, $5 minimum) or a maximum (for example, $10 maximum), so a very small withdrawal might cost $5 regardless.
The interest rate on cash advances is set separately from your purchase APR. Most cards charge 2% to 4% higher on cash advances than on purchases. If your purchase APR is 18%, your cash advance APR might be 22% or 24%. Unlike a purchase, there is no grace period — interest accrues from day one, calculated daily on the outstanding balance.
The total cost compounds quickly. A $500 cash advance at 24% APR with a 3% fee costs $15 upfront, then roughly $10 in interest in the first month if you do not pay it back. Over a year, if you only made minimum payments, the total interest could exceed $100.
Where you can withdraw cash using your credit card
You have three main options for taking cash out. The most common is an ATM — you use your card and your PIN to withdraw cash, just as you would with a debit card. Most ATMs accept credit cards, though some may charge an additional ATM operator fee (usually $2 to $3) on top of your card issuer's cash advance fee.
You can also visit a bank branch and ask a teller for a cash advance. Bring your card and ID, and the teller will process the withdrawal. This method avoids ATM operator fees but requires visiting during business hours.
A third option is cash back at a store checkout. When you make a purchase, you can ask for cash back — the store gives you the amount in cash, and your card is charged for both the purchase and the cash back amount. However, not all stores offer this, and the amount is usually capped at $20 to $100 depending on the retailer.
Why cash advances are more expensive than other borrowing options
A cash advance is one of the most expensive ways to borrow money. Compare it to alternatives: a personal loan from a bank or credit union typically charges 6% to 12% APR and has no upfront fee. A payday loan charges a flat fee but no interest if repaid in two weeks. Even a credit card purchase at your regular APR is cheaper than a cash advance, because you get a grace period and a lower rate.
The reason credit card companies charge so much for cash advances is that they see the risk as higher — cash is harder to track than a purchase, and the borrower has when ready access to the funds. The high cost is meant to discourage the behavior.
If you need cash urgently, explore other options first: asking for a paycheck advance from your employer, borrowing from a friend or family member, selling something you own, or using a line of credit from your bank if you have one. Any of these will likely cost less than a credit card cash advance.
How to pay back a cash advance quickly
Once you take a cash advance, the interest clock is running. Your credit card statement will show the cash advance balance separately from your purchase balance. Minimum payments usually cover interest and a small portion of principal, so paying only the minimum means the debt lingers for months.
The fastest way to reduce the cost is to pay back the full cash advance amount as soon as you can. If you took out $500, pay $500 back within a week or two, not over months. Every day the balance sits, interest accrues at the daily rate (your APR divided by 365).
When you make a payment to your credit card, the payment is typically applied to your lowest-interest debt first — usually purchases — before it touches the cash advance. Check your card's payment rules or call the issuer to confirm. Some cards let you direct a payment specifically to the cash advance, which speeds up repayment.
Cash advances and your credit score
Taking a cash advance does not directly hurt your credit score, but it can indirectly. The withdrawal increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 limit and take a $1,000 cash advance, your utilization jumps to 20%. High utilization can lower your score slightly, though the effect is temporary once you pay it back.
A cash advance also does not count as a separate account or inquiry, so it does not trigger a hard pull on your credit report. However, if the cash advance causes you to miss a payment or carry a high balance for months, that will damage your score.
Frequently Asked Questions
Can I take a cash advance if I have not used my credit card yet?
Yes. A cash advance is a feature of your credit line, not something you have to earn by making purchases first. You can take a cash advance the day you open the card, though some issuers may limit the amount to a percentage of your credit limit (for example, 50%).
What happens if I cannot pay back the cash advance?
The balance stays on your card and accrues interest daily. If you miss a payment, you will be charged a late fee and your interest rate may increase. The debt will appear on your credit report and damage your score. Contact your card issuer to discuss a payment plan if you are struggling.
Is there a limit to how much cash I can withdraw?
Yes. Most card issuers set a cash advance limit, which is usually 20% to 50% of your total credit limit. You can find your limit in your card agreement or by calling the issuer. ATMs may also have daily withdrawal limits ($500 to $1,000 is common), separate from your card's limit.
Do cash advances show up on my credit report?
The cash advance itself does not appear as a separate line item, but the balance counts toward your total credit card debt, which shows on your report. If you carry the balance for months, it signals to lenders that you are using credit to cover cash shortfalls, which can lower your score.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You would pay the cash advance fee and high interest rate to move debt from one card to another, which costs more than just paying down the original card. A balance transfer (moving debt to a 0% APR card) is cheaper if you may have access to.