Yes, you can take cash out of a credit card, but it costs more than a regular purchase
You can withdraw cash from a credit card at an ATM using your PIN, or ask a bank teller for a cash advance at the counter. The money comes from your available credit, not from a separate account. But unlike swiping your card at a store, a cash advance charges you a fee right away and starts charging interest when ready — there is no grace period like there is for regular purchases.
Most people use cash advances only when they have no other option, because the cost adds up fast. A $200 cash advance might cost $6 to $10 in fees alone, plus interest that starts accruing the same day.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) and start accruing interest right away, with no grace period.
- You can get a cash advance at an ATM with your PIN or at a bank teller window, but ATMs often charge an additional fee on top of your card's fee.
- Interest rates on cash advances are typically higher than the rate on regular purchases, sometimes 2 to 3 percentage points above your purchase APR.
- Paying back a cash advance takes priority over regular purchases when you make a payment, but the interest keeps accruing until the balance is zero.
How the fees and interest work
A cash advance fee is a one-time charge your card issuer takes when you withdraw the money. This fee is usually a percentage of the amount you take out — typically 3 to 5 percent — with a minimum fee (often $2 to $5) if the percentage is smaller. So a $100 cash advance might cost $5, and a $500 advance might cost $25.
On top of that, your card issuer charges interest on the cash advance balance starting the day you withdraw it. There is no grace period. If your regular purchase APR is 18 percent, your cash advance APR might be 22 or 24 percent. The interest compounds daily, so the longer you carry the balance, the more you owe.
If you use an ATM that is not owned by your card issuer, you may also pay an ATM operator fee — usually $2 to $3 — in addition to your card's cash advance fee. This stacks on top of everything else.
Where you can get a cash advance
The easiest place is an ATM. Insert your credit card, enter your PIN, and select "cash advance" or "withdrawal" from the menu. The ATM will show you the fee before you confirm. You can withdraw up to your available credit, but most cards set a daily limit — often $500 to $1,000 — and a separate limit on how much of your credit line can be used for cash advances (sometimes 20 to 30 percent of your total limit).
You can also walk into a bank branch and ask a teller for a cash advance. Bring your credit card and ID. The teller will process it the same way an ATM does, but you avoid the ATM operator fee. Some banks charge their own fee for teller-processed advances, so ask before you hand over your card.
A few credit card issuers let you transfer your cash advance to a checking account instead of taking physical cash. This still counts as a cash advance and charges the same fees and interest, but it may be faster if you need to pay a bill online.
How much you can withdraw
Your credit card agreement sets two limits on cash advances. The first is your cash advance limit, which is usually 20 to 30 percent of your total credit line. If your card has a $5,000 limit, your cash advance limit might be $1,000 or $1,500. You cannot withdraw more than this amount, even if you have more available credit.
The second limit is your daily withdrawal limit, which is separate from your cash advance limit. Most cards allow $500 to $1,000 per day at an ATM. If you need more, you may have to make multiple withdrawals on different days, or go to a bank teller who may have higher limits.
You can find both limits in your card's terms and conditions, or call the customer service number on the back of your card and ask. Some issuers let you increase your cash advance limit if you request it, though this is not common.
How paying back a cash advance works
When you make a payment on your credit card, the money goes toward your balances in a specific order set by federal law. Payments first cover fees, then the highest-interest balance (usually the cash advance), then lower-interest balances like regular purchases. This means your cash advance gets paid down before your regular purchases, which is good — but the interest on the cash advance keeps accruing until it is completely paid off.
If you carry a balance on your card, the interest on the cash advance will be higher than the interest on purchases, so paying it off as fast as possible saves you money. Making a large payment right after you take the advance is the best strategy if you have the cash to do it.
When a cash advance makes sense
A cash advance is expensive, so it only makes sense in specific situations. If you need cash for an emergency and have no other way to get it — no savings, no friends or family to borrow from, no personal loan available — then a cash advance might be your only option. The cost is high, but it is better than missing a rent payment or letting a utility bill go unpaid.
A cash advance does not make sense if you have other options. A personal loan from a bank or credit union usually has a lower interest rate and no upfront fee. A payday loan, despite its bad reputation, often costs less than a cash advance if you pay it back within two weeks. Even a cash advance from a different card with a lower APR might save you money if you have access to one.
Do not take a cash advance to pay off other debt unless you are certain the new interest rate is lower. Moving a $1,000 balance from a 15 percent purchase APR to a 24 percent cash advance APR costs you more, not less.
How a cash advance affects your credit score
Taking a cash advance does not hurt your credit score directly. Your issuer reports the cash advance as part of your credit card balance, not as a separate type of debt. What matters to your score is your credit utilization — the percentage of your available credit that you are using. If you take a $500 cash advance on a $5,000 card, your utilization goes from 0 percent to 10 percent, which may lower your score slightly.
The bigger risk is if you cannot pay back the cash advance quickly. Carrying a high balance for months will lower your score. Missing a payment will lower it much more. If you take a cash advance, make a plan to pay it back within a few weeks if you can, so the interest does not spiral.
Frequently Asked Questions
Can I take a cash advance if I am near my credit limit?
No. Your cash advance limit is separate from your total credit limit, and you can only withdraw up to your available credit within that cash advance limit. If you have a $5,000 card with a $1,000 cash advance limit and you have already used $4,500, you can only take a $500 cash advance because that is all the available credit you have left.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash or deposits money into your bank account. A balance transfer moves debt from one card to another. Cash advances charge a fee and interest when ready. Balance transfers sometimes offer a 0 percent introductory rate for 6 to 12 months, making them cheaper if you are moving existing debt — but they still charge a fee, usually 3 to 5 percent.
Will taking a cash advance hurt my credit score?
Taking a cash advance itself does not hurt your score, but it increases your credit utilization, which may lower your score slightly. Carrying the balance for a long time or missing a payment will hurt your score more. Paying it back quickly keeps the damage minimal.
Can I take a cash advance from a credit card I just opened?
Usually yes, but some issuers restrict cash advances for new cardholders or set a lower cash advance limit for the first few months. Check your card's terms or call customer service to find out what your limit is.
Is there a way to avoid the cash advance fee?
No. Every credit card charges a cash advance fee, and it is required by your card's terms. The only way to avoid it is to not take a cash advance. If you need cash, look for a personal loan, credit union loan, or borrowing from friends or family instead.