You can withdraw cash from a credit card, but it costs more than a regular purchase and works differently than a debit card
A cash advance is a withdrawal of money from your credit card's available credit. Unlike a debit card, which pulls from your bank account, a cash advance treats the money as a loan you owe when ready at a higher interest rate. Most credit cards allow cash advances at ATMs, banks, or through a teller, but the fees and rates make this an expensive way to get cash.
The main methods are ATM withdrawals using your PIN, cash advances at a bank teller, or balance transfers to your bank account (offered by some card issuers). Each method charges a fee upfront and starts charging interest right away — there is no grace period like there is for regular purchases.
Key Takeaways
- Cash advances charge an upfront fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, often 20 to 30 percent annually.
- Interest on a cash advance begins accruing when ready, with no grace period, so the cost grows daily from the moment you withdraw.
- You can withdraw cash at ATMs using your PIN, at bank tellers, or sometimes through a balance transfer to your checking account.
- A cash advance counts against your credit limit and appears on your credit report as a separate transaction type, which can affect your credit score.
How cash advances work and what they cost
When you take a cash advance, your credit card issuer charges you two things: a cash advance fee and a higher interest rate. The fee is typically 3 to 5 percent of the amount you withdraw, charged when ready. So a $500 cash advance might cost $15 to $25 just to get the money out.
The interest rate on a cash advance is separate from your regular purchase APR and is usually much higher — often 20 to 30 percent annually, depending on your card and creditworthiness. Unlike a purchase, which may have a grace period of 21 to 25 days before interest kicks in, a cash advance starts charging interest the same day you withdraw it. This means a $500 advance costs you money every single day until you pay it back.
If you carry the balance for a month, the interest alone could add $8 to $12 to what you owe. Over three months, interest could exceed $25 to $35. The combination of the upfront fee and daily interest makes a cash advance one of the most expensive ways to borrow money on a credit card.
Where and how to withdraw cash from your card
The most common method is using an ATM. You need your credit card and your PIN (which you set up when you opened the account, or can request from your issuer). Insert the card, enter your PIN, select "cash advance" or "withdrawal," and choose your amount. The ATM will dispense the cash and charge your fee when ready.
You can also visit a bank branch and ask a teller for a cash advance. Bring your credit card and a form of ID. The teller will process the transaction, charge the fee, and give you cash. This method works even if the bank is not your card issuer — most banks will advance cash on any major credit card for a fee.
Some card issuers offer a balance transfer check or direct deposit to your bank account, which functions like a cash advance but skips the ATM step. You write a check or authorize a transfer, and the money goes to your bank account instead of your wallet. The fees and interest rates are the same as a traditional cash advance.
Cash advances and your credit score
A cash advance affects your credit in two ways. First, it uses up part of your available credit, which increases your credit utilization ratio — the percentage of your total credit limit you are using. A higher utilization ratio can lower your credit score, even if you pay the balance on time.
Second, credit reporting agencies can see that you took a cash advance, and some scoring models treat cash advances as riskier than regular purchases. This is because cash advances are associated with financial strain — people typically take them when they need when ready cash, which suggests they may be struggling.
The impact is usually temporary. Once you pay off the cash advance, your utilization drops and the negative effect fades. But if you carry the balance for months, the damage to your score can persist as long as the debt is outstanding.
When a cash advance makes sense (and when it does not)
A cash advance rarely makes financial sense unless you are in a genuine emergency and have no other option. The fees and interest are straightforward too high compared to alternatives. However, there are narrow situations where it might be the least bad choice.
If you need cash urgently and have no access to a bank account, no savings, and no other credit available, a small cash advance for a day or two might cost less than a payday loan or overdraft fee. A $100 cash advance with a $5 fee and one day of interest might cost $5.50 total — less than a typical overdraft fee or payday loan fee.
In almost every other situation, you have better options: borrowing from a friend or family member, using a personal loan from a bank or credit union (which has a lower interest rate), asking your employer for an advance on your paycheck, or using a line of credit if you have one. Even a payday loan, which is expensive, may be cheaper than a cash advance if you pay it back within two weeks.
Limits on how much you can withdraw
Your credit card issuer sets a cash advance limit, which is usually lower than your total credit limit. For example, you might have a $5,000 credit limit but only a $1,500 cash advance limit. This limit is set by the issuer based on your credit history and account activity, and you can request an increase by calling customer service.
The cash advance limit is separate from your regular purchase limit, so withdrawing $1,500 in cash does not prevent you from making $5,000 in purchases — but it does reduce your total available credit. If your credit limit is $5,000 and you take a $1,500 cash advance, you have $3,500 left to spend on purchases and other cash advances combined.
Some issuers also set daily withdrawal limits at ATMs, typically $500 to $1,000 per day. If you need more than that, you can make multiple withdrawals over several days or visit a bank teller, who may be able to process a larger amount in a single transaction.
How to pay back a cash advance quickly
The fastest way to minimize the cost is to pay the cash advance back as soon as possible. Make a payment to your credit card account, and specify that it should go toward the cash advance balance if your issuer allows it. Some cards explore payments to the lowest-interest balance first, which means your payment might go to regular purchases instead of the cash advance.
Call your card issuer and ask how payments are applied, or request that your payment go to the cash advance. If you can pay it back within a few days, the interest cost will be minimal. If you have to carry it for weeks or months, the interest will compound and the total cost will climb quickly.
Avoid taking another cash advance to pay off the first one — this just extends the debt and adds more fees. Instead, focus on finding the money to pay it back from your income or by selling something you own.
Frequently Asked Questions
Is there a difference between a cash advance and a regular credit card purchase?
Yes. A purchase uses your credit limit and usually has a grace period before interest charges begin. A cash advance charges a fee upfront, has a higher interest rate, and starts charging interest when ready with no grace period. The interest rate on a cash advance is typically 5 to 10 percentage points higher than your purchase APR.
Can I use a credit card at an ATM without a PIN?
No. You need your PIN to withdraw cash at an ATM. If you do not have a PIN, contact your card issuer to set one up. Some issuers allow you to set a PIN online or through their app; others require a phone call. Without a PIN, your only option is to visit a bank teller and ask for a cash advance in person.
What happens if I cannot pay back the cash advance?
The balance stays on your credit card and continues to accrue interest at the cash advance rate. If you miss payments, late fees are added and your credit score drops. The debt can be reported to collection agencies if it goes unpaid for several months. Contact your issuer when ready if you are struggling to pay back a cash advance — they may offer a hardship program or payment plan.
Does taking a cash advance hurt my credit score?
Yes, temporarily. It increases your credit utilization ratio and signals financial strain, both of which can lower your score. The impact is usually worst in the first month and improves as you pay down the balance. Once the cash advance is fully paid, the negative effect fades, though it may take a few months for your score to fully recover.
Are there any credit cards that do not charge cash advance fees?
Very few. Most credit cards charge a cash advance fee of 3 to 5 percent. Some cards marketed to people with poor credit may charge higher fees, up to 10 percent. A small number of cards, usually premium travel cards, waive the fee for cardholders, but they charge a higher interest rate instead. Read your card's terms and conditions to see what fees and rates explore to cash advances.