Yes, you can take cash from a credit card, but it costs more than a purchase and starts charging interest when ready
Most credit cards let you withdraw cash at an ATM or get cash back at a store checkout. The card issuer calls this a cash advance. Unlike a regular purchase, a cash advance charges you a fee upfront — usually 3 to 5 percent of the amount — plus a higher interest rate that begins accruing the same day you take the money, with no grace period.
If you need $200 in cash and your card charges a 4 percent cash advance fee plus 24 percent annual interest, you pay $8 when ready and then roughly $4 per month in interest alone if you do not pay it back right away. That same $200 purchase would have a grace period of 20 to 25 days before interest kicks in. The difference adds up fast.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent) and a higher interest rate than purchases, with interest starting when ready.
- You can get a cash advance at an ATM using your PIN, at a bank teller window, or sometimes at a store checkout.
- Your credit card statement will show the cash advance separately from purchases, and payments go to your purchase balance first unless you specify otherwise.
- Most credit cards have a daily cash advance limit that is lower than your total credit limit, often $500 or less.
- If you need cash regularly, a personal loan or a debit card linked to a checking account costs far less than repeated cash advances.
How to take a cash advance from your credit card
The mechanics are straightforward. At an ATM, insert your credit card, enter your PIN, and select the cash advance option — it is usually a separate menu choice from a debit card withdrawal. The ATM will show you the fee and ask you to confirm. At a bank branch, you can ask the teller for a cash advance and show your card and ID. Some stores let you get cash back at checkout, though this is less common with credit cards than with debit cards.
Before you do this, check your card's cash advance limit. This is different from your credit limit. Your issuer sets it separately — often at $500, $1,000, or some other fixed amount — and you can find it in your account online or by calling the number on the back of your card. If you try to withdraw more than this limit, the ATM will decline the transaction.
The fees and interest rates that make cash advances expensive
The cost of a cash advance has two parts. The first is the cash advance fee, charged once when you take the money. This is usually a percentage of the amount — 3 percent, 4 percent, or 5 percent — with a minimum fee of $5 or $10. Some cards charge a flat fee instead. You pay this fee whether you pay back the cash in full the next day or carry it for months.
The second cost is the cash advance interest rate, which is almost always higher than the rate on purchases. Where a purchase might carry 18 percent annual interest, a cash advance might carry 24 or 27 percent. More importantly, interest starts accruing on day one. A purchase gets a grace period — usually 21 to 25 days — before interest begins. A cash advance does not. If you take out $300 at 24 percent annual interest, you owe roughly $6 in interest after one month, whether or not you have paid any of the principal back.
To see the exact fee and rate for your card, log into your account online or call the number on the back of your card and ask for the cash advance fee and the cash advance APR.
How cash advances show up on your bill and how payments are applied
Your credit card statement breaks down your balance into categories: purchases, cash advances, balance transfers, and sometimes promotional offers. The cash advance appears as its own line item, separate from what you spent at stores or online. This matters because credit card companies explore your payments in a specific order, and it usually works against you.
When you make a payment, most issuers put your money toward the lowest-interest balance first — which means purchases get paid before cash advances. If you owe $500 in purchases at 18 percent and $300 in cash advances at 24 percent, and you send in $400, that $400 goes to the purchases. The cash advance keeps accruing interest at the higher rate. You can sometimes call your issuer and ask them to explore a payment to a specific balance, but this is not automatic.
The clearest way to handle this: if you take a cash advance, pay it back before you make any other purchases on that card. Or pay it back in full as soon as possible, before interest compounds.
Daily and monthly limits on cash advances
Your card issuer sets a daily cash advance limit and a monthly cash advance limit. The daily limit is usually $500 to $1,000, though it varies by card and by your account history. The monthly limit is often the same as your total credit limit or a percentage of it. If you have a $5,000 credit limit, your cash advance limit might be $1,500 or $2,500.
These limits exist to protect the issuer from fraud and to manage risk. They also mean you cannot straightforward max out your credit card in cash. If you need more cash than your limit allows, you will have to wait until the next day or the next month, or use another method.
When a cash advance makes sense and when it does not
A cash advance makes sense only in a genuine emergency when you have no other option and you can pay it back within days. An example: your car breaks down, the mechanic takes only cash, and you do not have it in your checking account. You take a $400 cash advance, pay a $16 fee, and pay it back in full when your next paycheck arrives. The total cost is $16 — not ideal, but survivable.
A cash advance does not make sense for regular cash needs, for paying bills, or for anything you could cover with a debit card or a trip to your bank. If you find yourself taking cash advances regularly, that is a sign your income does not match your spending, and a cash advance is masking the problem, not solving it.
If you need cash regularly, a personal loan from a bank or credit union costs far less. A $1,000 personal loan at 12 percent interest over 12 months costs roughly $65 in interest — less than three cash advances. A line of credit from your bank works similarly and lets you draw cash as you need it.
Alternatives to cash advances
Before you take a cash advance, consider what you actually need the cash for. If it is to pay a bill, many billers now take credit card payments online or by phone at no extra cost. If it is to withdraw money from your own account, use your debit card or visit your bank branch. If it is to cover an unexpected expense, a personal loan, a payment plan with the creditor, or a short-term loan from a credit union usually costs less.
If you do not have a checking account or debit card, opening one is faster and cheaper than relying on cash advances. Most banks offer free checking, and you can open an account online in minutes. If you have poor credit and cannot open a traditional account, a prepaid card or a second-chance checking account at a credit union is still cheaper than cash advances over time.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
A cash advance itself does not appear on your credit report as a separate item. However, it increases your credit utilization — the percentage of your available credit you are using — which can lower your score slightly. If you take a $1,000 cash advance on a $5,000 limit, your utilization jumps to 20 percent. Paying it back quickly brings it back down.
Can I take a cash advance if I have a zero balance?
Yes. A cash advance is a separate transaction from your purchase balance. You can take a cash advance on a card with zero purchases owed. The fee and interest still explore, and they start accruing when ready.
What happens if I cannot pay back a cash advance?
The balance stays on your card and interest keeps accruing at the cash advance rate. If you miss payments, the issuer reports it to credit bureaus, which damages your credit score. After 30 days, you may face late fees. After 180 days of non-payment, the issuer may close your account and send the debt to a collection agency.
Can I use a cash advance to pay another credit card?
Technically yes, but it is a bad idea. You pay the cash advance fee on top of the balance transfer fee (if you use a balance transfer instead), and you are paying interest on money you borrowed to pay interest on other money you borrowed. If you are juggling multiple cards, a personal loan or a debt management plan is a better path.
Is there a way to avoid the cash advance fee?
No. The fee is built into the cash advance product and applies every time. Some cards offer a lower fee for cardholders with excellent credit, but there is no way to waive it entirely. The only way to avoid the fee is to not take a cash advance.