You can get cash from a credit card, but it costs more than a regular purchase
Yes, you can withdraw cash using a credit card at an ATM or from a bank teller. The transaction is called a cash advance. Unlike a purchase, a cash advance charges you a fee upfront — usually 3% to 5% of the amount you withdraw — and the interest rate starts accruing when ready, often at 20% to 30% annually. There is no grace period like there is for purchases. If you withdraw $500, you pay the fee right away and begin paying interest the same day.
Most credit cards allow cash advances, but the amount you can withdraw is limited to your cash advance limit, which is often lower than your overall credit limit. A card with a $5,000 limit might only allow a $1,500 cash advance. You find your cash advance limit in your card's terms or by calling the card issuer.
Key Takeaways
- Cash advances charge a fee (usually 3% to 5%) and a higher interest rate than purchases, with interest starting when ready.
- Your cash advance limit is separate from your credit limit and is often much lower.
- You can get cash at an ATM, a bank branch, or through a convenience check mailed by your card issuer.
- A personal loan or credit union loan is cheaper than a cash advance if you have time to explore.
Where to get cash from your credit card
The most common method is an ATM withdrawal. Insert your credit card and enter your PIN (which you may need to set up first if you have never done a cash advance). The ATM will show you the fee and the amount available. You can withdraw up to your cash advance limit in a single transaction, though some ATMs have daily withdrawal caps.
You can also visit a bank branch in person. Bring your credit card and a photo ID. A teller can process a cash advance for you, and you will see the fee before the transaction completes. This method works even if the bank is not your card issuer — many banks process cash advances for any major credit card.
Some card issuers mail convenience checks to cardholders. These checks draw from your credit line and are treated as cash advances. You write them like regular checks, and the fee and interest explore the same way. Not all cards offer this option, and you can request them through your online account or by calling the card issuer.
The real cost of a cash advance
The fee is charged when ready and appears on your next statement. A $500 cash advance with a 4% fee costs $20 right away. That $20 is added to your balance and accrues interest too.
The interest rate for cash advances is usually higher than the rate for purchases. If your card charges 18% APR on purchases, the cash advance rate might be 25% APR. Interest is calculated daily from the moment you withdraw the cash — there is no grace period. On a $500 advance at 25% APR, you pay about $3.42 per day in interest if you carry the balance.
If you carry a cash advance for a month, the total cost is roughly the fee plus one month of interest. On $500, that is $20 (fee) plus about $10 (interest), totaling $30 — a 6% cost for one month. Paying it back within a few days is much cheaper than carrying it for weeks.
How a cash advance affects your credit
A cash advance does not hurt your credit score directly, but it does increase your credit utilization — the percentage of your available credit you are using. If you have a $5,000 limit and a $1,500 cash advance limit, a $500 cash advance uses 33% of your cash advance limit. This can lower your score slightly if your overall utilization is already high.
The bigger risk is missing a payment. If you cannot pay back the cash advance on time, late fees and penalty interest rates kick in, and the missed payment reports to the credit bureaus and damages your score for years.
Cheaper alternatives to a cash advance
A personal loan from a bank or credit union is usually cheaper. Personal loans charge 6% to 36% APR depending on your credit, with no upfront fee. If you have decent credit, a personal loan at 12% APR is far cheaper than a cash advance at 25% APR plus a 4% fee. The downside is that personal loans take a few days to a week to fund, so they do not work for same-day cash needs.
A credit union loan is often the cheapest option if you are a member. Credit unions typically charge lower rates and may offer small loans with minimal paperwork. Some credit unions have emergency loans that fund within 24 hours.
If you need cash for a specific purchase, ask whether you can pay the merchant directly with your credit card instead of withdrawing cash. You avoid the cash advance fee and interest entirely.
When a cash advance makes sense
A cash advance is useful only in emergencies when you need cash when ready and have no other option. Examples include a car repair that requires cash payment, a medical bill, or a situation where your debit card is not accepted. In these cases, the high cost is worth paying to solve an urgent problem.
A cash advance does not make sense for everyday spending, bill payments, or planned expenses. If you are considering a cash advance for rent or groceries, that is a sign you need to look at your budget or find a lower-cost loan. Carrying a cash advance balance month to month is one of the most expensive ways to borrow.
How to minimize the cost if you do take a cash advance
Pay it back as fast as possible. Every day you carry the balance costs you money in interest. If you take a $500 advance, make it a priority to pay it back within a week if you can.
Withdraw only what you need. The fee is a percentage, so a $200 advance costs less than a $500 advance. Do not withdraw extra cash just because you can.
Check whether your card issuer offers a lower cash advance rate for certain situations. Some cards reduce the rate for balance transfers or offer promotional rates for new cardholders. Call your issuer and ask.
Frequently Asked Questions
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a higher interest rate with an upfront fee. A balance transfer moves debt from one card to another and usually has a lower rate (sometimes 0% for a promotional period) but also charges an upfront fee. Balance transfers are for paying off other debts; cash advances are for getting cash.
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is expensive. You pay the cash advance fee and interest rate on the amount you withdraw, then use that cash to pay the other card. A balance transfer is cheaper because the fee is usually lower and the rate is often promotional. If you want to move debt between cards, ask about a balance transfer instead.
Will taking a cash advance hurt my credit score?
Not when ready, but it can lower your score if it raises your credit utilization. The real damage comes if you miss a payment. A late payment on a cash advance stays on your credit report for seven years and can lower your score by 100 points or more.
What happens if I cannot pay back a cash advance?
The balance carries over to your next statement with interest and a late fee if you miss the due date. The debt grows each month, and after 30 days late, the missed payment reports to credit bureaus. After 180 days, the card issuer may close your account and send the debt to a collection agency.
Can I get a cash advance from a prepaid card or debit card?
No. Cash advances are only available on credit cards. Debit cards and prepaid cards withdraw money you already have in the account, so there is no credit line to draw from. If you need cash and do not have a credit card, a personal loan or credit union loan is a better option.