Yes, you can take cash out from a credit card, but it costs more than a regular purchase
Most credit cards let you withdraw cash at an ATM or get cash back at a store checkout. The card issuer treats this as a cash advance — a short-term loan separate from your regular credit line. The moment you take the cash, interest starts accruing at a higher rate than your purchase APR, and you pay an upfront fee. There is no grace period like there is for purchases, so the interest clock starts when ready.
The real cost difference matters. If your purchase APR is 18%, your cash advance APR might be 24% or higher. A $500 cash advance could cost you $10 to $15 in fees alone, plus interest that compounds daily. For most people, a cash advance should be a last resort, not a convenience.
Key Takeaways
- Cash advances charge a separate, higher interest rate than purchases — often 3 to 5 percentage points above your regular APR — with no grace period.
- You pay an upfront fee of 3% to 5% of the amount withdrawn, charged when ready to your account.
- Interest begins accruing the day you withdraw the cash, not at the end of your billing cycle like a purchase.
- ATM withdrawals and store cash-back requests both count as cash advances and trigger the same fees and rates.
- Paying off a cash advance should be your priority because the interest rate is higher than almost any other debt you carry.
How the cash advance fee and interest rate work
When you take a cash advance, your card issuer charges two separate costs. The first is the cash advance fee, a percentage of the amount you withdraw — typically 3%, 4%, or 5%. A $300 withdrawal with a 4% fee costs you $12 right away. This fee is added to your balance and appears on your next statement.
The second cost is the cash advance APR, which is higher than your purchase APR. Your card agreement lists both rates. If your purchase APR is 16% and your cash advance APR is 22%, that 6-point difference adds up fast. On a $500 advance, the daily interest is roughly $0.30 per day at the higher rate — and that compounds every single day until you pay it off.
Unlike a purchase, there is no grace period. A purchase made on day one of your billing cycle does not accrue interest until after your statement closes (usually 20 to 25 days later), as long as you pay in full. A cash advance starts accruing interest the moment you withdraw it. This is the biggest hidden cost most people miss.
Where you can withdraw cash and what counts as a cash advance
You can get cash from a credit card in three main ways. The first is an ATM withdrawal — you insert your card, enter your PIN, and withdraw cash. The second is cash back at checkout — you swipe or insert your card at a store register and ask for cash back. The third is a convenience check — your card issuer mails you a check you can deposit or cash, and it counts as a cash advance.
All three trigger the same fee and interest rate. There is no cheaper way to get cash from a credit card. Some cards set a daily or monthly limit on how much you can withdraw — often $500 to $1,000 per day — so check your card agreement or call the issuer to find your limit before you go to the ATM.
One exception: some cards offer a 0% APR period on cash advances for a limited time (usually 3 to 6 months), though the upfront fee still applies. These are rare and usually only on premium cards. Check your card's terms to see if yours is one of them.
Why a cash advance is expensive compared to other borrowing options
A cash advance is almost always more expensive than other ways to borrow money. A personal loan from a bank or credit union typically charges 8% to 15% APR and has no upfront fee. A payday loan charges a flat fee but no APR, and the total cost is usually lower if you repay within two weeks. Even a credit card purchase at your regular APR is cheaper than a cash advance because of the grace period.
The only scenario where a cash advance makes sense is when you need cash when ready and have no other option — for example, a car repair you cannot delay and no access to a personal loan. Even then, your goal should be to pay it off as fast as possible. A $500 cash advance at 24% APR costs you roughly $10 in interest per month if you carry the balance. Over six months, that is $60 in interest alone, plus the original $15 to $25 fee.
How to pay off a cash advance quickly
When you make a payment to your credit card, the issuer applies it to your balance in a specific order set by federal law. Payments go first to the balance with the highest interest rate — which is your cash advance. This is good news: your payment automatically targets the most expensive debt first.
The best strategy is to treat a cash advance like an emergency loan you must repay within one or two billing cycles. If you took out $500, aim to pay back $250 or more on your next statement. The faster you pay it off, the less interest you owe. If you can pay the full amount within 30 days, the total cost is just the upfront fee — the interest is minimal.
Do not take another cash advance while you are paying off the first one. Each new advance resets the clock and adds another fee. If you find yourself taking cash advances regularly, that is a sign your income does not cover your expenses, and you need to address the underlying problem — either by cutting spending or increasing income — rather than borrowing your way out.
Alternatives to a credit card cash advance
Before you use a cash advance, explore these cheaper options. A personal loan from a bank, credit union, or online lender usually has a lower APR and no upfront fee. You get the money in one to three business days. A line of credit from a bank works similarly — you draw what you need and pay interest only on what you use. Both are cheaper than a cash advance if you have decent credit.
If you need cash for an emergency and have no credit, a credit union loan may still be possible. Many credit unions offer small loans (called payday alternative loans) at rates capped by federal law, usually 18% or less. You must be a member, but joining is often free or costs a small deposit.
If you need cash for a specific purchase, ask whether you can pay the vendor directly with your credit card instead of withdrawing cash. Most merchants accept cards, and you avoid the cash advance fee and higher interest rate entirely. If the vendor only takes cash, a personal loan or credit union loan is still cheaper than a cash advance.
Frequently Asked Questions
What is the difference between a cash advance and a regular purchase?
A purchase uses your credit line and has a grace period — no interest if you pay in full by the due date. A cash advance is a separate loan with an when ready fee, a higher interest rate, and no grace period. Interest starts accruing the day you withdraw the cash.
Can I avoid the cash advance fee?
No. The fee is charged by your card issuer and appears on every cash advance, regardless of the amount. Some premium cards offer a 0% APR period on cash advances, but the fee still applies. The only way to avoid it is to not take a cash advance.
Does a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but carrying a high balance does. If the cash advance pushes your credit utilization above 30% of your total credit limit, your score may drop. Paying it off quickly keeps utilization low and protects your score.
What happens if I cannot pay back the cash advance?
The balance stays on your card and accrues interest at the cash advance APR. If you miss a payment, late fees explore and your interest rate may increase. The debt can be reported to credit bureaus and damage your credit score. Contact your card issuer when ready if you cannot pay — they may offer a hardship plan or lower rate.
Can I take a cash advance from a debit card?
No. Debit cards withdraw money directly from your bank account and do not offer cash advances. If you need cash and have a debit card, you can withdraw from an ATM for free (at your bank's ATMs) or use cash back at checkout. Credit cards are the only cards that offer cash advances.