Yes, you can take cash out of your credit card, but it costs more than a regular purchase
You can withdraw cash from your credit card at an ATM, bank teller, or through a cash advance at a store. The transaction is called a cash advance. Unlike a purchase, a cash advance starts charging interest when ready — there is no grace period — and the interest rate is usually higher than your purchase rate. You will also pay an upfront fee, typically 3 to 5 percent of the amount you withdraw.
The money comes from your available credit, not from a separate account. If your credit limit is $5,000 and you withdraw $500 in cash, your remaining credit drops to $4,500. The $500 counts toward your credit utilization ratio, which affects your credit score.
Key Takeaways
- Cash advances charge interest from day one with no grace period, and the interest rate is usually 2 to 5 percentage points higher than your purchase rate.
- You pay an upfront fee of 3 to 5 percent of the cash amount, charged to your account when ready.
- You can withdraw cash at an ATM using your credit card PIN, at a bank teller with your card and ID, or through a store cash advance.
- The cash advance reduces your available credit and counts toward your credit utilization, which can lower your credit score.
- Paying back a cash advance takes longer because payments go to purchases first, then to the higher-interest cash advance balance.
Where and how to withdraw cash from your credit card
The easiest method is an ATM. Insert your credit card, enter your PIN (which you may need to set up if you have never done a cash advance before), and withdraw the amount you need. Most ATMs accept credit cards, though some are limited to debit cards only. Check the ATM screen before you start — it will tell you whether credit card withdrawals are available.
You can also go to a bank teller at any bank, not just your card issuer's bank. Bring your credit card and a photo ID. Tell the teller you want a cash advance, and they will process it on the spot. This method works even if you do not have a PIN set up yet.
Some retail stores offer cash advances at the register. You hand over your credit card, and the cashier processes it like a purchase but gives you cash instead of a receipt for goods. Not all stores offer this, so ask before you get in line.
Fees and interest rates for cash advances
Your card issuer charges two costs for a cash advance: a fee and interest. The cash advance fee is a percentage of the amount you withdraw, usually 3 to 5 percent. If you withdraw $500, you might pay $15 to $25 in fees alone. Some cards cap the fee at a flat dollar amount — for example, $10 maximum — but most do not.
The cash advance interest rate is separate from your purchase rate and is almost always higher. If your purchase APR is 18 percent, your cash advance APR might be 23 or 25 percent. Interest starts accruing the day you withdraw the cash. There is no 21-day grace period like there is for purchases.
Interest compounds daily, so the longer you carry the balance, the more you owe. A $500 cash advance at 25 percent APR costs about $10.42 per month in interest alone, before you make any payment.
How cash advances affect your credit score
A cash advance reduces your available credit when ready. If your limit is $5,000 and you withdraw $500, your available credit drops to $4,500. This increases your credit utilization ratio — the percentage of your total credit limit that you are using. Credit scoring models penalize high utilization, so a large cash advance can lower your score by 10 to 50 points depending on your current utilization and credit history.
The impact is temporary. As you pay down the cash advance, your utilization drops and your score recovers. But while the balance is outstanding, the damage is real and measurable.
How payments are applied to cash advances
When you make a payment on a credit card with both purchases and a cash advance, the card issuer applies your payment to the purchase first, then to the cash advance. This means your high-interest cash advance balance stays on the card longer, accruing more interest.
If you owe $300 in purchases at 18 percent APR and $500 in a cash advance at 25 percent APR, and you make a $200 payment, that $200 goes entirely to the purchase. The $500 cash advance keeps accruing interest at 25 percent until the purchase is paid off.
To pay off a cash advance faster, you can request that your payment be applied to the cash advance specifically. Call your card issuer and ask them to note your account that you want payments directed to the cash advance balance. Some issuers will do this; others will not. Check your card's terms or call customer service to find out.
Alternatives to a credit card cash advance
If you need cash urgently, a cash advance is one option, but it is expensive. A personal loan from a bank or credit union usually has a lower interest rate and no upfront fee. If you have a bank account, you can withdraw cash for free. If you need a small amount, a payday loan or a line of credit from your bank may be cheaper than a cash advance, though payday loans carry their own risks.
If you are considering a cash advance because you are short on money, look first at whether you can delay the expense, borrow from a friend or family member, or find a lower-cost loan. A cash advance should be a last resort, not a regular way to access cash.
Setting up and managing your cash advance PIN
To withdraw cash from an ATM, you need a PIN. If you have never done a cash advance before, you may not have one set up. Call the customer service number on the back of your card and ask to set up a PIN. You can usually do this over the phone in a few minutes. Some card issuers let you set a PIN online through your account portal.
Write down your PIN and keep it somewhere safe — not in your wallet with your card. If you forget it, call customer service again and they will reset it or send you a new one by mail. Do not share your PIN with anyone, even a family member.
Frequently Asked Questions
What is the difference between a cash advance and a regular purchase?
A purchase has a grace period (usually 21 days) before interest starts. A cash advance charges interest from day one. A purchase also has a lower interest rate. A cash advance has an upfront fee; a purchase does not.
Can I withdraw cash from my credit card without a PIN?
Yes. You can go to a bank teller with your card and ID and request a cash advance without a PIN. You can also use some store cash advance services without a PIN. But an ATM requires a PIN.
Does a cash advance show up on my credit report?
A cash advance itself does not appear separately on your credit report. But the balance counts toward your total credit card balance and your utilization ratio, both of which appear on your report and affect your score.
What happens if I do not pay back a cash advance?
The balance stays on your card, interest keeps accruing, and your credit score continues to drop. After 30 days of missed payments, the late payment appears on your credit report. After 180 days, the card issuer may charge off the account and sell 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 a cash advance fee (3 to 5 percent) plus a high interest rate, so you are paying to move debt from one card to another. A balance transfer card or a personal loan is much cheaper.