Yes, you can withdraw cash from a credit card, but it is not the same as using a debit card
You can withdraw cash from a credit card at an ATM, through a bank teller, or sometimes at a store checkout. The transaction is called a cash advance. Unlike a debit card withdrawal, which pulls from money you already have, a cash advance borrows against your credit limit and starts charging interest when ready — often at a higher rate than your regular purchase APR.
The cost of a cash advance includes three separate charges: an upfront fee (usually 3 to 5 percent of the amount withdrawn), a higher interest rate (often 5 to 10 percentage points above your purchase rate), and interest that accrues from the day you withdraw the money, not from your statement closing date. A $500 cash advance can cost $15 to $25 in fees alone, plus interest that begins accumulating the next day.
Most people use cash advances only when they have no other option — to cover an unexpected expense when their bank account is empty and they cannot use a debit card. If you are considering a cash advance, understanding the mechanics and the alternatives will help you decide whether it makes sense for your situation.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent, a higher interest rate than purchases, and interest that starts accruing when ready with no grace period.
- You can withdraw cash at an ATM using your credit card PIN, at a bank teller with your card and ID, or sometimes at a store checkout.
- The interest rate on a cash advance is typically 5 to 10 percentage points higher than your purchase APR and varies by card issuer and your creditworthiness.
- Cash advances count against your available credit and can lower your credit score if they increase your credit utilization ratio significantly.
- Paying back a cash advance should be your priority because the interest charges compound quickly and the debt does not benefit from any promotional rates.
How to withdraw cash using your credit card
The most common method is to use an ATM. Insert your credit card into any ATM that displays your card's logo (Visa, Mastercard, American Express, or Discover), enter your PIN, select "cash withdrawal" or "cash advance," and choose your amount. The ATM will dispense the cash and charge your credit card account when ready.
If you do not have a PIN set up, you can visit a bank branch in person. Bring your credit card and a government-issued ID. Tell the teller you want a cash advance. They will process the transaction at the counter, verify your identity, and hand you the cash. This method works even if you have never used an ATM with that card before.
Some retailers allow cash advances at the checkout, though this is less common than it once was. Ask the cashier whether they offer this service. If they do, you will typically need to swipe your card and enter your PIN, similar to an ATM transaction.
The fees and interest rates that explore to cash advances
Every cash advance carries an upfront fee, charged at the time you withdraw the money. This fee is a percentage of the amount withdrawn — typically 3 to 5 percent, though some cards charge a flat minimum (such as $5 or $10) if the percentage would be smaller. A $300 cash advance at 4 percent costs $12 in fees. A $1,000 advance at 3 percent costs $30.
The interest rate on a cash advance is separate from your purchase APR and is almost always higher. If your card charges 18 percent APR on purchases, the cash advance rate might be 24 or 28 percent. This rate varies by card issuer and by your credit profile — someone with excellent credit may see a smaller gap between purchase and cash advance rates than someone with fair credit.
Interest on a cash advance begins accruing the day you withdraw the money. Unlike purchases, which have a grace period (usually 21 to 25 days before interest starts), cash advances have no grace period. If you withdraw $500 on January 1 at a 25 percent APR, you will owe interest for every single day until the balance is paid off, even if you pay it back on January 15.
How a cash advance affects your credit and available credit
A cash advance counts as a balance on your credit card, reducing your available credit when ready. If your card has a $5,000 limit and you withdraw $500 in cash, your available credit drops to $4,500. This affects your credit utilization ratio — the percentage of your total credit limit that you are using across all cards. A higher utilization ratio can lower your credit score, even if you pay the cash advance back quickly.
The impact on your score depends on how much you are already using. If you were using 30 percent of your total credit across all cards and the cash advance pushes you to 40 percent, the effect is usually small. If you were already at 80 percent utilization and the advance pushes you over 90 percent, the score drop can be more noticeable.
The cash advance itself does not appear separately on your credit report — it shows as a balance on that credit card account. However, if you carry the balance for several months, the interest charges will increase the total amount you owe, making the utilization ratio worse and the debt harder to pay off.
Comparing cash advances to other ways to get emergency cash
A personal loan from a bank or credit union is usually cheaper than a cash advance. Personal loans typically charge 6 to 36 percent APR depending on your credit score and the lender, with no upfront fee. A $500 personal loan at 15 percent APR costs less in interest over six months than a $500 cash advance at 25 percent APR plus a $15 fee, even though the personal loan rate sounds higher.
A payday loan is faster but often more expensive. Payday lenders charge a flat fee (typically $15 to $20 per $100 borrowed) and expect repayment in two weeks. A $500 payday loan might cost $75 to $100 in fees alone. This is worse than a cash advance fee, but the short repayment window means you pay less total interest if you can repay quickly.
Borrowing from family or friends, if possible, costs nothing. A line of credit from your bank (if you have one) usually charges a lower rate than a cash advance. Even a high-interest savings account withdrawal, if you have savings available, is better than a cash advance because you are not borrowing at all.
What happens if you cannot pay back a cash advance
If you carry a cash advance balance, the interest charges compound. A $500 cash advance at 25 percent APR costs about $10.42 per month in interest alone. If you only make minimum payments, most of that payment goes toward interest, not the principal, and the balance shrinks slowly. After six months of minimum payments, you might still owe $450 or more.
A cash advance that goes unpaid for months will damage your credit score. Once a balance is 30 days late, the card issuer reports it to the credit bureaus. A late payment stays on your credit report for seven years and can lower your score by 100 points or more, depending on your current score and payment history.
If the balance remains unpaid for six months or longer, the card issuer may charge off the account — meaning they write it off as a loss and may sell the debt to a collection agency. A collection account on your credit report is even more damaging than a late payment and can affect your ability to borrow for years.
When a cash advance makes sense and when it does not
A cash advance makes sense only in specific situations: you need cash when ready, you have no other source of funds, and you can pay it back within a few weeks. An example might be a car repair that requires cash payment and your bank account is empty. You withdraw $800, pay for the repair, and pay back the $800 plus fees within 10 days. The total cost is the upfront fee plus 10 days of interest — perhaps $30 to $40 total.
A cash advance does not make sense if you are carrying a balance on your credit card already, if you cannot pay it back within a month, or if you have other options available. Do not use a cash advance to fund everyday spending, to pay bills that could wait, or to cover a shortfall you expect to repeat. Each of these situations will cost you more in interest and fees than you can afford.
If you are considering a cash advance because you are short on cash regularly, that is a sign to look at your budget. A cash advance is a short-term solution to a cash flow problem, not a way to manage money long-term. If you find yourself needing cash advances repeatedly, the real issue is that your spending exceeds your income, and borrowing will only delay the problem.
Frequently Asked Questions
Can I use a credit card to withdraw cash at any ATM?
You can use any ATM that displays your card's logo. Most ATMs accept Visa, Mastercard, American Express, and Discover. Some ATMs charge an additional fee (usually $2 to $3) on top of the cash advance fee your card issuer charges. Check the ATM screen before you complete the transaction — it will show you the total cost.
What is the difference between a cash advance and a balance transfer?
A cash advance is withdrawing physical cash from your credit card. A balance transfer is moving debt from one credit card to another, usually to take advantage of a lower interest rate. Balance transfers also charge a fee (typically 3 to 5 percent) but do not have the same high interest rate as a cash advance. Neither is ideal, but a balance transfer is usually cheaper if you are moving existing debt.
Will a cash advance hurt my credit score?
A single cash advance will not directly hurt your score, but it can indirectly lower it by increasing your credit utilization ratio. If you pay it back within a few weeks, the impact is usually small. If you carry the balance for months, the utilization stays high and the interest charges make the debt worse, which can lower your score more significantly.
Can I get a cash advance if I have a low credit limit?
Yes. Your cash advance limit is usually the same as your credit limit, though some card issuers set a separate, lower limit for cash advances. Check your card's terms or call the issuer to find out your cash advance limit. Even with a low limit, you can still withdraw up to that amount, but the fees and interest will explore the same way.
Is there a way to avoid the cash advance fee?
No. Every credit card charges a cash advance fee, and it is non-negotiable. The fee is set by the card issuer and applies to every cash advance you make. The only way to avoid the fee is to not take a cash advance. If you need cash, explore other options like a personal loan, a line of credit, or borrowing from family first.