Yes, you can get cash from your credit card, but it costs more than a regular purchase
A cash advance is when you withdraw money directly from your credit card's available credit, either at an ATM, a bank teller, or through a convenience check. The money goes into your bank account or your pocket, not toward a purchase. Unlike a regular purchase, a cash advance starts charging interest when ready — there is no grace period — and the interest rate is usually higher than your card's regular purchase rate.
Most people use cash advances when they need physical money urgently and have no other way to get it. The cost is steep enough that it should be a last resort, not a habit. Understanding how they work and what they cost will help you decide whether one makes sense for your situation.
Key Takeaways
- Cash advances charge interest from day one with no grace period, and the rate is typically 3 to 5 percentage points higher than your purchase rate.
- You pay an upfront fee — usually 3 to 5 percent of the amount withdrawn — on top of the interest.
- You can get a cash advance at an ATM using your PIN, at a bank teller with your card and ID, or by depositing a convenience check your card issuer sends you.
- The total cost of a small cash advance can easily exceed 20 percent of the amount borrowed if you carry the balance for several months.
Where to get a cash advance and how much it costs
You have three main ways to take a cash advance. The first is an ATM — you insert your card, enter your PIN, and withdraw cash up to your daily limit (which your card issuer sets, often $500 to $1,000). The second is a bank teller — you go to any bank branch, show your card and ID, and ask for a cash advance; they can usually process larger amounts than an ATM. The third is a convenience check — your card issuer mails you blank checks linked to your credit card account, and you write one to yourself or to someone else, then deposit it like a regular check.
Every cash advance comes with two costs. The cash advance fee is charged upfront and is usually 3 to 5 percent of the amount you withdraw — so a $500 advance costs $15 to $25 just to get the money. The interest rate starts accruing when ready at a rate that varies by card but is typically 3 to 5 percentage points higher than your purchase APR. If your card charges 18 percent on purchases, the cash advance rate might be 23 percent. That interest compounds daily until you pay the balance off.
How to find your cash advance limit and rate
Your card issuer sets a separate limit for cash advances, which is usually lower than your overall credit limit. You can find this limit and your cash advance APR in three places: your card's terms and conditions document (which came with your card or is on the issuer's website), your online account portal (log in and look for "cash advance limit" or "account details"), or by calling the customer service number on the back of your card.
Write down both numbers before you take an advance. Knowing your limit tells you the maximum you can withdraw, and knowing the rate tells you exactly how much interest you will owe. Many people are shocked to discover their cash advance rate is significantly higher than they expected, which is why checking first matters.
What happens after you take a cash advance
The cash advance fee appears on your next statement as a separate charge. The interest starts accruing when ready and is added to your balance each month. Unlike a regular purchase, there is no interest-free period — interest begins on day one. Your monthly minimum payment will include both the cash advance balance and any interest owed, but paying only the minimum means the balance shrinks slowly and you pay far more in interest overall.
Most card issuers explore your payments to the lowest-interest debt first — so if you have both a purchase balance and a cash advance balance, your payment goes toward the purchase first, leaving the cash advance to accrue interest longer. This is another reason cash advances are expensive: your payment does not reduce the cash advance as quickly as you might expect.
When a cash advance makes sense and when it does not
A cash advance makes sense only in narrow situations: you need cash urgently, you have no other source (no savings, no friends or family to borrow from, no personal loan available), and you can pay it back within a month or two. If you can pay it back in 30 days, the total cost is manageable — a $500 advance with a 5 percent fee and 23 percent APR costs about $31 in fees and interest if paid back in one month.
A cash advance does not make sense if you will carry the balance for months. That same $500 advance costs $92 in fees and interest if you pay it back over six months, and $175 if you pay it back over a year. At that point, you are paying 35 to 50 percent of the original amount just to borrow the money. A personal loan, a payday loan (despite its own high cost), or asking your employer for an advance on your paycheck are usually cheaper alternatives.
Alternatives to a cash advance
Before you take a cash advance, explore other options. If you need cash for an emergency, ask whether you can pay with your card instead — most places accept cards now, and you avoid the cash advance fee and higher interest rate. If you genuinely need physical cash, check whether your bank offers a debit card cash advance (a small loan against your checking account) or a line of credit at a lower rate than your card's cash advance rate.
If you have a 401(k) or similar retirement account, some plans allow you to borrow against your balance at a rate lower than a credit card cash advance. A personal loan from a bank or credit union typically charges 8 to 36 percent APR depending on your credit, which is often lower than a cash advance rate. Even a payday loan, despite its reputation, may cost less than a cash advance if you pay it back on your next paycheck. Compare the total cost of each option before deciding.
How cash advances affect your credit score
A cash advance itself does not directly hurt your credit score — it is not reported separately to the credit bureaus. However, it increases your credit utilization (the percentage of your available credit you are using), which can lower your score slightly. If you take a $500 cash advance on a $2,000 limit, your utilization jumps to 25 percent, and credit scoring models penalize high utilization.
The bigger risk is if you cannot pay the cash advance back on time. Missed or late payments are reported to the credit bureaus and will damage your score significantly. If you take a cash advance, make sure you have a concrete plan to pay it back within a few months — otherwise the interest and utilization will both work against you.
Frequently Asked Questions
Can I use a cash advance to pay off other debts?
Yes, you can use the cash to pay any bill or debt, but it is usually not a smart move. You are borrowing at a high rate (the cash advance rate) to pay off a debt that might be at a lower rate. The exception is if you are paying off a payday loan or other predatory debt at an even higher rate — in that case, a cash advance might be the lesser evil, but only if you can pay it back quickly.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another, while a cash advance gives you physical money. Balance transfers sometimes have lower introductory rates (0 percent for 6 to 12 months), making them cheaper if you are moving existing debt. Cash advances always charge interest from day one and are meant for getting cash, not moving balances.
Can I take a cash advance if my card is maxed out?
No. Your cash advance limit is part of your overall credit limit. If you have used your full limit, you cannot take a cash advance unless you pay down your balance first. Some issuers set a separate cash advance limit that is lower than your total limit, so you might hit that limit before your overall limit.
Do I have to pay back a cash advance faster than regular purchases?
No, there is no requirement to pay it back faster. However, because the interest rate is higher and interest accrues when ready, you should prioritize paying it off before you pay off regular purchases. Paying only the minimum means the cash advance balance shrinks slowly and costs you far more in interest.
Can I avoid the cash advance fee?
Not with most cards — the fee is charged automatically when you take the advance. Some cards marketed to people with poor credit offer no cash advance fee, but they typically charge a higher interest rate to compensate. Read your card's terms to see whether a fee applies before you take an advance.