You can transfer cash from a credit card, but it costs money and counts as a loan you repay with interest
A cash advance is a withdrawal of cash from your credit card account, treated the same way as a purchase — you owe the balance back to the card issuer. The card company charges a fee (usually 3 to 5 percent of the amount) and starts charging interest when ready, with no grace period like you get on regular purchases. Most people use cash advances only when they have no other option, because the cost is high and the interest rate is often higher than the rate on regular card purchases.
You can get a cash advance at an ATM using your credit card and PIN, at a bank teller window, or through a balance transfer — moving the balance to another card or account. Each method has different costs and timelines. The key difference from a debit card withdrawal is that you are borrowing money, not spending money you already have.
Key Takeaways
- A cash advance charges a fee of 3 to 5 percent upfront and interest that starts accruing when ready, with no grace period.
- You can withdraw cash at an ATM, a bank branch, or through a balance transfer to another card or bank account.
- Interest rates on cash advances are typically higher than rates on regular purchases, sometimes 2 to 3 percentage points above your standard APR.
- A balance transfer to a bank account (sometimes called a convenience check) may have a lower fee than an ATM withdrawal but takes 3 to 7 business days to arrive.
The three ways to move credit card money to cash or a bank account
ATM withdrawal: Insert your credit card and enter your PIN at any ATM that accepts your card brand. You receive cash when ready. The fee is usually 3 to 5 percent of the amount withdrawn, charged to your card balance. This is the fastest method but often the most expensive.
Bank teller cash advance: Walk into a bank branch (yours or any bank) and ask for a cash advance on your credit card. You show your card and ID, and the teller gives you cash. The fee and timing are the same as an ATM withdrawal — when ready cash, 3 to 5 percent fee. Some banks charge a flat fee instead of a percentage, so ask before you proceed.
Balance transfer or convenience check: Your card issuer may send you checks that draw against your credit line, or offer an online transfer to a bank account. You write the check or authorize the transfer, and the money lands in your bank account in 3 to 7 business days. The fee is often lower (1 to 3 percent) but the wait is longer. Interest starts accruing on the day the transfer posts, not the day you request it.
How interest and fees add up on a cash advance
Suppose you withdraw $500 at an ATM using a credit card with a 4 percent cash advance fee and a 24 percent APR. You pay $20 upfront (4 percent of $500). The remaining $520 balance starts accruing interest when ready at 24 percent annually, which is about 2 percent per month. After one month, you owe roughly $530.40 in interest alone. If you pay the full amount back within 30 days, your total cost is about $30.40. If you carry the balance for six months, the interest compounds and you pay significantly more.
Compare this to a regular purchase on the same card: a $500 purchase has no upfront fee and no interest if you pay it off within the grace period (usually 21 to 25 days). A cash advance skips the grace period entirely, so interest starts on day one.
When your card issuer may limit how much you can withdraw
Most card issuers set a cash advance limit separate from your credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. The issuer sets this limit based on your credit history and account activity, and you can request an increase by calling the customer service number on the back of your card.
Some cards offer a higher cash advance limit to customers with good payment history, while others keep it low as a default. Check your cardholder agreement or log into your online account to see your current limit. If you need more cash than your limit allows, you will have to wait until you pay down the balance or request a limit increase.
Alternatives that cost less than a cash advance
A personal loan from a bank or credit union usually charges less interest than a credit card cash advance, especially if you have decent credit. The interest rate is fixed upfront, there is no daily accrual surprise, and you know exactly what you owe. The downside is that approval takes a few days, so this works only if you are not in an when ready crisis.
A payday loan or title loan is faster but far more expensive — interest rates can exceed 400 percent annually. Avoid these unless you have no other option and can repay within two weeks. A cash advance from your employer (if your workplace offers one) is often free or low-cost and should be your first choice if available.
If you need money for a planned expense, a 0 percent balance transfer card (if you have good credit) lets you move debt from a high-interest card to a new card with no interest for 6 to 21 months. This does not give you cash, but it reduces what you owe on existing balances.
What happens if you do not pay back a cash advance
A cash advance is a debt on your credit card, so it works the same way as any other card balance. If you do not pay it back, interest and late fees accumulate, your credit score drops, and the card issuer can report you to a collection agency. The card issuer can also raise your interest rate on all balances (if your card allows it) or close the account.
Unlike a personal loan, there is no collateral to repossess, but the damage to your credit report lasts seven years. If you are struggling to pay back a cash advance, contact your card issuer and ask about a hardship plan — some issuers will lower your interest rate or waive fees if you are facing temporary financial difficulty.
Frequently Asked Questions
Does a cash advance show up differently on my credit report?
No, a cash advance appears as a regular balance on your credit card statement and credit report. The credit bureaus do not distinguish between a cash advance and a purchase. However, the high interest rate means the balance grows faster, which can hurt your credit score if it raises your overall card utilization.
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You pay the cash advance fee (3 to 5 percent), then pay interest on the balance when ready. A balance transfer to the second card directly (if you have one) costs less and gives you a grace period. If you need to consolidate debt, a personal loan is usually cheaper than either option.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a fee plus interest starting when ready. A balance transfer moves an existing balance from one card to another (or to a bank account via check) and may offer a promotional 0 percent interest period. Balance transfers are for moving existing debt; cash advances are for getting new cash.
Will a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but the balance it creates does. If the balance raises your overall credit utilization above 30 percent, your score drops. The higher interest rate also means the balance grows faster, keeping your utilization high longer. Paying it off quickly minimizes the damage.
Can I get a cash advance if I have a low credit limit?
Yes, but your cash advance limit is usually lower than your credit limit. If your credit limit is $500, your cash advance limit might be $200. You can request a higher limit by calling your card issuer, but approval is not may provide and depends on your credit history and account activity.