Yes, you can pull cash off a credit card, but it costs more than a purchase and starts charging interest when ready
You can withdraw cash from a credit card at an ATM or bank teller window using your card's PIN. This is called a cash advance. Unlike a purchase, which may have a grace period before interest kicks in, a cash advance begins charging interest the moment you take the money out — there is no interest-free window. You will also pay an upfront fee, usually 3 to 5 percent of the amount you withdraw, on top of a higher interest rate than your regular purchase APR.
The mechanics are straightforward: insert your card at an ATM, enter your PIN, and withdraw cash up to your cash advance limit (which is often lower than your credit limit). The money hits your account when ready. The cost, however, is steep enough that most people should explore other options first.
Key Takeaways
- Cash advances charge interest from day one with no grace period, unlike regular credit card purchases.
- You will pay an upfront fee (typically 3 to 5 percent) plus a higher interest rate than your purchase APR.
- Your cash advance limit is often lower than your overall credit limit and is set by your card issuer.
- A personal loan, payday loan alternative, or even a balance transfer card may cost less if you need cash urgently.
How much a cash advance actually costs
The total cost of a cash advance has two parts: the upfront fee and the interest. If you withdraw $500, your card issuer charges you a fee right away — usually 3 to 5 percent, though some cards charge a flat minimum (like $5 or $10). That means you owe $515 to $525 before a single day of interest passes.
Then interest starts accruing when ready at your cash advance APR, which is almost always higher than your purchase APR. While a purchase might carry 18 percent APR, a cash advance on the same card could be 22 or 25 percent. If you carry that $500 for a month, you are paying roughly $9 to $10 in interest on top of the fee. Over three months, interest alone could exceed $35.
The math gets worse if you only make minimum payments. A $500 cash advance with a 5 percent fee ($25) and 24 percent APR, paid at minimum, can take six months or longer to clear and cost you $80 to $100 in fees and interest combined.
Where you can withdraw cash and what limits explore
You can withdraw a cash advance at any ATM that accepts your card's network (Visa, Mastercard, American Express, Discover). You can also walk into a bank branch and ask a teller for a cash advance, though this is less common. Some card issuers allow you to transfer a cash advance to your bank account, which counts the same way — as a cash advance with all the associated fees and interest.
Your card issuer sets a cash advance limit separate from your overall credit limit. If your credit limit is $5,000, your cash advance limit might be $1,500 or $2,000. You can usually find this limit in your card's terms or by calling the issuer. Once you hit that limit, you cannot withdraw more until you pay down what you owe.
Some ATMs charge an additional fee on top of your card issuer's fee — typically $2 to $3 for using an out-of-network machine. Using an ATM from your card issuer's bank (if it is a bank-branded card) or a network partner usually avoids this extra charge.
Why cash advances are expensive compared to other borrowing
A cash advance is one of the most expensive ways to borrow money. The combination of an when ready fee, a high interest rate, and no grace period makes it costlier than most alternatives. A personal loan from a bank or credit union typically charges 8 to 18 percent APR with no upfront fee. A payday loan alternative through a credit union (called a CPAUL, or Credit Union Payday Alternative Loan) caps the fee at $20 and charges interest at a much lower rate than a cash advance.
Even a balance transfer card, which lets you move debt from one card to another at a lower rate for a set period, is cheaper than a cash advance if you need to borrow. A balance transfer fee is usually 3 to 5 percent (the same as a cash advance fee), but the interest rate during the promotional period is often 0 percent for 6 to 21 months, depending on the card.
The only scenario where a cash advance makes sense is when you need cash when ready and have no other option — and even then, you should pay it back as fast as possible to minimize interest.
How a cash advance affects your credit score
A cash advance itself does not show up as a separate item on your credit report. However, it increases your credit utilization ratio — the amount of available credit you are using. If you have a $5,000 credit limit and take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization can lower your credit score by 10 to 50 points, depending on how high it goes and your overall credit profile.
The impact is temporary. Once you pay down the cash advance, your utilization drops and your score recovers. But if you carry the balance for months, the damage compounds because your score stays depressed the entire time.
Alternatives to a cash advance
Before you use a cash advance, consider these options:
- Personal loan: Banks and credit unions offer unsecured personal loans at rates between 8 and 18 percent, with no upfront fee. Approval can take one to three business days.
- Credit union payday alternative loan (CPAUL): If you are a credit union member, this capped-fee loan is designed to replace payday loans. The fee is capped at $20, and the APR is typically 18 percent or lower.
- Borrow from family or friends: If possible, this costs nothing and avoids the credit system entirely.
- Negotiate with the creditor or service provider: If you owe money and cannot pay, many companies will work out a payment plan rather than force you to borrow.
- Balance transfer card: If you have existing credit card debt and need time to pay it off, a 0 percent balance transfer offer can save you thousands in interest — though you will pay a 3 to 5 percent transfer fee upfront.
How to minimize the damage if you do take a cash advance
If you have no other choice, take these steps to keep the cost as low as possible. First, withdraw only what you absolutely need. Every dollar you do not take is a dollar that does not get hit with a fee or interest. Second, pay it back as fast as you can — ideally within one or two billing cycles. The longer you carry it, the more interest compounds.
Third, make sure you understand your card's terms before you withdraw. Some cards charge different fees for different types of cash advances (ATM versus bank teller, for example). Call your issuer and ask: What is the cash advance fee? What is the cash advance APR? What is my cash advance limit? Write down the answers so you know exactly what you are paying.
Fourth, do not use a cash advance to pay off other debt unless that debt has an even higher interest rate. Paying a 24 percent credit card balance with a 25 percent cash advance does not help — it just spreads the problem across two cards.
Frequently Asked Questions
Can I use a cash advance to pay bills?
Technically yes, but it is expensive. You are paying a 3 to 5 percent fee plus high interest to borrow money that will cost you more than other options. If the bill is urgent, a personal loan or asking the biller for a payment plan is cheaper. If it is not urgent, wait and save the cash instead.
Does a cash advance show up separately on my credit report?
No, it does not appear as a separate line item. However, it increases your credit utilization ratio, which can lower your score. Once you pay it off, your utilization drops and your score recovers.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges interest when ready. A balance transfer moves debt from one card to another and often includes a 0 percent interest period. Balance transfers are for existing debt; cash advances are for getting cash. Both charge an upfront fee.
Can I get a cash advance if my credit is bad?
Yes. Your cash advance limit is based on your credit limit, not your credit score. If you have a card with a $2,000 limit, you can take a cash advance up to your cash advance limit regardless of recent missed payments. However, your interest rate may be higher if your credit score is low.
What happens if I cannot pay back a cash advance?
It works like any other credit card debt. If you miss payments, interest and fees pile up, your credit score drops, and the card issuer may pursue collection. The debt does not disappear. Contact your card issuer as soon as you know you will struggle to pay — many offer hardship programs or payment plans.