You can take money off a credit card through a cash advance, but it costs more than a regular purchase and starts charging interest when ready
A cash advance is a withdrawal of cash using your credit card at an ATM, bank teller, or through a convenience check. The money goes into your bank account or your hand, not toward a purchase. Unlike a regular credit card purchase, a cash advance begins accruing interest the moment you withdraw it — there is no grace period — and the interest rate is typically higher than your card's standard purchase APR.
The three main ways to get cash are: using your card at an ATM, visiting a bank branch and asking the teller, or depositing a convenience check the card issuer mailed you. Each method has the same cost structure but different limits and fees. Before you do this, you should understand what it will cost you and whether other options exist, because cash advances are expensive compared to using a debit card or taking out a personal loan.
Key Takeaways
- Cash advances charge interest from day one with no grace period, and the APR is usually 3 to 5 percentage points higher than your purchase rate.
- You will pay an upfront fee of 3 to 5 percent of the amount withdrawn, charged by most card issuers.
- Your daily cash advance limit is often much lower than your total credit limit — sometimes $500 or $1,000 even if your card limit is $10,000.
- The total cost of a $500 cash advance can reach $50 to $100 in fees and interest over a few months if you do not pay it back quickly.
How the fees and interest work on a cash advance
When you take a cash advance, you pay two separate costs: an upfront fee and daily interest. The upfront fee is a percentage of the amount you withdraw, typically 3 to 5 percent. A $500 withdrawal costs $15 to $25 in fees alone. This fee appears on your statement when ready and is added to your balance.
Interest begins accruing the same day. If your card's purchase APR is 18 percent, your cash advance APR might be 23 or 24 percent. On a $500 advance, that means roughly $0.32 per day in interest at the higher rate. If you pay back the full amount in 30 days, you will owe about $16 in interest plus the $15 to $25 fee — a total of $31 to $41 for borrowing $500 for a month. That is roughly 6 to 8 percent of the amount borrowed, which is far higher than a personal loan or overdraft line.
The interest is calculated daily and added to your balance. If you only make minimum payments, the interest compounds, and the cash advance portion of your balance is often the last part to be paid down because card issuers explore payments to the lowest-interest debt first.
Daily limits and how much you can withdraw
Your credit card issuer sets a separate cash advance limit, which is different from your overall credit limit. This limit is often much lower. You might have a $10,000 credit limit but only a $500 or $1,000 cash advance limit. Some cards allow you to withdraw up to 20 or 30 percent of your credit limit as cash, while others cap it at a fixed dollar amount.
You can find your cash advance limit by logging into your online account, calling the number on the back of your card, or checking your cardholder agreement. The limit resets daily, so if you have a $500 limit and withdraw $300 today, you can withdraw another $200 tomorrow (though doing so repeatedly will trigger fraud alerts).
ATMs also impose their own limits — typically $300 to $500 per transaction — regardless of your card's cash advance limit. If you need more than that, you can visit a bank branch or use a convenience check instead.
Three ways to withdraw cash using your credit card
ATM withdrawal: Insert your card at any ATM that displays your card's logo (Visa, Mastercard, American Express, or Discover). Enter your PIN and select "cash advance" or "withdrawal." The ATM will show you the fee it charges — usually $3 to $5 — plus your card issuer's fee. You will see the total before you confirm. This is the fastest method but often has the lowest daily limit.
Bank teller: Walk into any bank branch and ask to withdraw cash using your credit card. Bring your card and a photo ID. The teller will process it as a cash advance, show you the fees, and hand you cash. Banks sometimes allow larger withdrawals than ATMs do, and you can ask questions about your limit. This method takes 10 to 15 minutes.
Convenience checks: Your card issuer periodically mails you blank checks linked to your credit card account. You write one out to yourself, deposit it into your bank account, and the amount is treated as a cash advance. This method has no ATM limit and no PIN requirement, but it takes several business days to clear. The fee and interest rate are the same as an ATM withdrawal.
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 of funds, and you can pay it back within a few weeks. An example might be a car repair that requires cash payment and you do not have time to visit an ATM with your debit card. The cost is high, but if the alternative is a late fee or a broken-down car, it may be worth it.
A cash advance does not make sense if you are using it to pay down other debt, cover regular expenses, or fund a purchase you could make with the card itself. If you are considering a cash advance to pay a medical bill, rent, or credit card debt, a personal loan, payment plan, or hardship program through your card issuer will cost you less. If you straightforward need cash for everyday spending, use your debit card or visit your bank's ATM instead.
Do not use a cash advance to fund gambling, investing, or any speculative activity. The interest rate is too high to justify the risk, and you will be paying interest on money you may lose.
Alternatives that cost less than a cash advance
A personal loan from a bank or credit union typically charges 6 to 12 percent APR and has no upfront fee. For a $500 loan over three months, you will pay roughly $10 to $20 in interest — far less than a cash advance. The downside is that approval takes a few days, so this works only if you are not in an when ready crisis.
A 0 percent balance transfer from another credit card can move debt off a high-interest card, though it does not give you cash. If you need cash to pay off a balance, this does not help, but if you are trying to reduce interest charges, it is worth exploring.
Asking your card issuer about a hardship program or payment plan can lower your interest rate or waive fees if you are facing a temporary financial squeeze. These programs are not advertised, but they exist. Call the number on your card and explain your situation.
If you have a bank account with overdraft protection, you can overdraw your account and pay overdraft fees (typically $25 to $35 per transaction) rather than cash advance fees. This is still expensive, but it may be cheaper than a cash advance if the overdraft is small and you repay it quickly.
How a cash advance affects your credit score
A cash advance itself does not appear separately on your credit report — it is straightforward part of your credit card balance. However, it does increase your overall balance, which raises your credit utilization ratio (the percentage of your available credit you are using). If your utilization jumps from 30 percent to 50 percent because of a cash advance, your credit score may drop by 10 to 20 points temporarily.
The drop is usually temporary. Once you pay off the cash advance, your utilization falls and your score recovers. However, if you carry the cash advance balance for months, the damage to your score persists. Additionally, if you miss a payment on the cash advance, it will be reported as a late payment and will hurt your score for seven years.
Frequently Asked Questions
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a bad idea. You are borrowing at 23 to 25 percent interest to pay off debt that might be at 18 to 20 percent interest. You are paying more to move the problem around. If you need to consolidate debt, a personal loan or balance transfer card is cheaper.
What happens if I do not pay back a cash advance?
The balance stays on your credit card and accrues interest daily. If you miss a payment, it will be reported to credit bureaus and will damage your credit score. Your card issuer may also raise your interest rate or close your account. The debt does not go away and can be sent to a collection agency.
Is there a way to avoid the cash advance fee?
No. Every card issuer charges a fee for cash advances — it is built into their business model. Some cards advertise "no cash advance fees," but these are rare and usually come with a higher purchase APR to compensate. Read your cardholder agreement to confirm your card's fee before you withdraw.
Can I take a cash advance on a debit card?
No. Debit cards withdraw money directly from your bank account and do not allow cash advances. If you need cash, use your debit card at an ATM or ask a teller for a withdrawal. There is no fee or interest because you are spending your own money.
How long does it take to pay off a cash advance?
That depends on your payment. If you pay the full amount when ready, you are done. If you make minimum payments, a $500 cash advance at 24 percent APR will take roughly four to five months to pay off, and you will pay $50 to $75 in interest alone. The longer you carry it, the more you pay.