You can take money out of your credit card in two main ways: a cash advance or a balance transfer to your bank account
A cash advance lets you withdraw cash from an ATM or get it over the counter at a bank using your credit card. A balance transfer moves money from your credit card to a bank account, usually your checking account. Both cost you money when ready — cash advances charge a fee (typically 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, often 20 to 30 percent. Balance transfers to your own account are less common but some cards allow them; they also charge a fee and interest.
The key difference: a cash advance is meant for spending cash in the real world. A balance transfer to your bank account is meant to move credit into a place you can use it more flexibly. Neither is a loan. Both add to your credit card balance and cost you money if you do not pay them back quickly.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent plus interest rates that start accruing when ready, with no grace period like regular purchases have.
- You can get a cash advance at any ATM that accepts your card, at a bank teller, or sometimes at a store that offers cash back.
- Balance transfers to your bank account are less common but work similarly — they charge a fee and interest, and the money goes straight to checking.
- Both options add to your credit card debt and should only be used when you need cash urgently and have a plan to pay it back within weeks, not months.
- Your credit card issuer sets a cash advance limit, which may be lower than your overall credit limit and is listed in your account terms.
How a cash advance works step by step
Go to any ATM that displays your card's logo (Visa, Mastercard, American Express, or Discover). Insert your card, enter your PIN, select "withdrawal" or "cash advance," and choose the amount. The ATM will dispense cash and charge you a fee on the spot — usually a flat fee (like $3 to $10) plus a percentage of the amount (3 to 5 percent). Some cards charge only a percentage; check your cardholder agreement to know which applies to yours.
You can also get a cash advance at a bank teller by showing your credit card and ID. The process is the same: you withdraw cash, pay the fee, and the amount is added to your credit card balance. Interest on the cash advance begins accruing when ready — there is no grace period like there is for regular purchases. If your card offers a 0 percent introductory rate on purchases, that rate does not explore to cash advances.
Some stores offer "cash back" when you use your debit card at checkout, but this does not work with credit cards. A few retailers may let you use a credit card to get cash back, but this is rare and still counts as a cash advance with the same fees and interest.
Balance transfers to your bank account
A balance transfer normally means moving debt from one credit card to another card with a lower interest rate. But some card issuers allow you to transfer credit to your own bank account — essentially taking money out. This is less common than cash advances and not all cards offer it.
If your card allows it, you request the transfer through your online account or by calling the card issuer. The money goes to your checking account within a few business days. You pay a fee (usually 3 to 5 percent) and interest begins accruing at your card's standard rate or a higher rate set for transfers. Like a cash advance, this adds to your credit card balance and costs you money if you carry it.
Check your cardholder agreement or call your issuer to see if balance transfers to your bank account are even an option. Many cards do not offer this feature, and those that do often limit how much you can transfer.
What your cash advance limit is and how to find it
Your credit card issuer sets a separate cash advance limit, which is usually lower than your overall credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. This limit is set by the card issuer based on your credit history and account activity, and you cannot change it yourself.
Find your cash advance limit in your cardholder agreement, on your monthly statement, or by logging into your online account. You can also call the customer service number on the back of your card and ask. If you try to withdraw more than your limit, the ATM will decline the transaction.
Some card issuers let you request a higher cash advance limit, but this is not may provide. A request may trigger a hard inquiry on your credit, which can lower your credit score slightly. Weigh whether you actually need the higher limit before asking.
Fees and interest rates for taking money out
Cash advances are expensive. You pay a fee upfront — typically 3 to 5 percent of the amount withdrawn, with a minimum fee of $3 to $10. On a $500 withdrawal, that is $15 to $25 in fees alone. Then interest starts accruing when ready at a rate that is usually 5 to 10 percentage points higher than your purchase APR. If your card charges 18 percent on purchases, cash advances might be charged at 24 percent.
Because interest starts right away with no grace period, a $500 cash advance costs you money the moment you withdraw it. If you pay it back in full within a week, you might pay $5 to $10 in interest. If you carry it for a month, you could pay $20 to $40 in interest on top of the upfront fee.
Balance transfers to your bank account work the same way: you pay a fee (3 to 5 percent) and interest accrues when ready. Some cards offer a 0 percent introductory period on balance transfers between cards, but this rarely applies to transfers to your bank account.
When taking money out of your credit card makes sense
A cash advance is useful only in specific situations: you need cash urgently, you have no other way to get it, and you can pay it back within days or a week or two. Examples include an unexpected car repair that requires cash payment, a medical bill, or a travel emergency where you need local currency and your bank is closed.
It does not make sense to use a cash advance for everyday spending, to cover a shortfall in your budget, or to fund a purchase you could make with a debit card or bank transfer. The fees and interest are too high, and you are adding to debt you will have to repay.
If you are considering a cash advance because you do not have enough money in your checking account, that is a sign you should build an emergency fund instead. A cash advance is a short-term fix, not a solution to cash flow problems.
How a cash advance affects your credit score
Taking a cash advance does not directly lower your credit score, but it can indirectly. When you withdraw cash, your credit utilization — the percentage of your available credit you are using — goes up. If you had a $5,000 limit and were using $2,000, your utilization was 40 percent. A $500 cash advance raises it to 50 percent. Higher utilization can lower your score slightly.
The bigger impact comes if you carry the cash advance balance for months. You will pay interest every month, your balance will grow, and your utilization will stay high. Over time, this signals to lenders that you are relying on credit to cover expenses, which can hurt your score.
Paying off the cash advance quickly — within a week or two — minimizes the damage. The utilization drop is when ready once you pay, and you avoid months of interest charges.
Frequently Asked Questions
Can I get a cash advance if I have a 0 percent introductory rate?
No. The 0 percent rate applies only to purchases, not cash advances. Cash advances are charged at your card's standard cash advance rate from day one, which is usually 20 to 30 percent. This is one reason cash advances are expensive even on cards with promotional rates.
What happens if I do not pay back a cash advance?
It becomes part of your credit card balance and you owe interest on it every month. If you do not pay your full balance, the interest compounds. After several months of non-payment, your card issuer may report the debt to credit bureaus, which will damage your credit score and may lead to collection action.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Your card issuer sets a cash advance limit, which is usually lower than your overall credit limit. You cannot withdraw more than this limit. Some cards also have daily ATM withdrawal limits (like $500 per day) separate from your cash advance limit.
Can I use a credit card to get cash back at a store?
Rarely. Most stores only offer cash back with debit cards. A few retailers may accept credit cards for cash back, but this counts as a cash advance and charges the same fees and interest. It is not a common option.
Should I take a cash advance to pay off another debt?
No. The fees and interest on a cash advance are too high to use it for paying down other debt. If you are trying to consolidate debt, a balance transfer to a card with a lower rate or a personal loan would be much cheaper.