You can take money off a credit card, but it costs more than a regular purchase
Yes, you can withdraw cash using a credit card. The most common way is to use an ATM with your card's PIN, or to ask a bank teller for a cash advance. But this is not the same as using your card to buy something. Credit card companies charge a separate fee for cash withdrawals — usually 3 to 5 percent of the amount you take out — and the interest rate on that cash starts when ready, with no grace period like you get on purchases.
If you need cash and have a credit card, it works. But the cost adds up fast, and there are usually cheaper ways to get money. Understanding what happens when you take a cash advance helps you decide whether it makes sense for your situation.
Key Takeaways
- A cash advance on a credit card charges a fee (usually 3 to 5 percent) plus a higher interest rate than regular purchases, with interest starting when ready.
- You can get a cash advance at an ATM using your PIN, at a bank teller window, or sometimes through a convenience check your card issuer sends you.
- The interest rate on cash advances is typically higher than your regular purchase APR and has no grace period, so the cost grows every single day.
- Alternatives like a personal loan, borrowing from family, or using a debit card may cost less or nothing, depending on your situation.
- Your credit limit covers both purchases and cash advances combined, so a large withdrawal can reduce what you have left to spend.
How a cash advance works and what it costs
When you take cash off a credit card at an ATM or bank, the card issuer charges you two things right away: a cash advance fee and cash advance interest. The fee is a flat percentage of the amount you withdraw — most cards charge between 3 and 5 percent, though some charge a flat dollar amount instead (like $5 or $10 minimum). That fee appears on your next statement.
The interest is separate and usually higher than what you pay on regular purchases. If your purchase APR is 18 percent, your cash advance APR might be 22 or 25 percent. Unlike a purchase, which has a grace period (usually 21 to 25 days before interest starts), cash advance interest begins the day you withdraw the money. This means even if you pay the full amount back within a week, you still owe interest for those seven days.
Example: You withdraw $500 from an ATM using your credit card. The card charges a 4 percent cash advance fee ($20) plus 24 percent APR on the cash advance. After one week, you owe the $500 plus $20 fee plus about $2.30 in interest. If you wait a month to pay it back, the interest alone reaches roughly $10.
Where you can get cash from a credit card
You have three main ways to get cash using a credit card. The most common is an ATM withdrawal — you insert your card, enter your PIN, and take out cash just like you would with a debit card. Most ATMs accept credit cards, though some charge an additional ATM operator fee on top of your card issuer's cash advance fee.
The second way is to visit a bank teller at a bank branch and ask for a cash advance. You hand over your card, and they give you cash. This method has no extra ATM fee, but you need to go during business hours and may need to show ID.
The third way is through a convenience check — some card issuers mail these to cardholders. You write a check against your credit card account, deposit it in your bank, and the amount is treated as a cash advance. This method is less common now, but if you receive these checks, the same fees and interest rates explore.
How cash advances affect your credit limit and credit score
Your credit limit is shared between purchases and cash advances. If your limit is $5,000 and you take a $1,500 cash advance, you have only $3,500 left to spend on purchases. This matters because credit card companies look at how much of your available credit you are using — called your credit utilization ratio. Using a large portion of your limit can lower your credit score, even if you pay the balance on time.
A cash advance itself does not show up differently on your credit report than a regular purchase. The issuer reports the total balance you owe. However, if the cash advance pushes your utilization higher, or if you carry the balance and miss a payment, your score can drop. The key is that cash advances make it easier to overspend and harder to pay off quickly because of the high interest rate.
Cheaper alternatives to a credit card cash advance
Before you take a cash advance, consider whether another option costs less. A personal loan from a bank or credit union typically has a lower interest rate than a credit card cash advance — often 8 to 15 percent depending on your credit score and the lender. You pay interest, but not a separate cash advance fee, and you know exactly how many months you have to pay it back.
If you need cash for an emergency, borrowing from family or friends costs nothing if they agree to it. A written agreement about when you will pay them back protects both of you and keeps the relationship clear.
A payday loan is another option, though it is usually more expensive than a credit card cash advance. Payday lenders charge fees that work out to very high interest rates — sometimes 400 percent APR or higher — so this should be a last resort.
If you have a debit card linked to a bank account with cash in it, use that instead. There is no fee and no interest. If you do not have cash in the account, some banks offer overdraft protection that lets you withdraw more than you have, though that also charges a fee.
When a cash advance might make sense
A cash advance is rarely the best choice, but there are situations where it is the fastest option available. If you need cash when ready and have no other way to get it — no savings, no access to a personal loan, no one to borrow from — and you can pay it back within a few days, the total cost might be low enough to be worth it.
For example, if you take out $200, pay a $8 fee, and pay it back within three days, the interest cost is less than $1. That is cheaper than some alternatives. But if you take out $500 and carry it for a month, you are paying $20 in fees plus $10 in interest — $30 total — which is significant.
The math only works if you can pay the cash advance back quickly. If you are thinking about carrying the balance for weeks or months, a personal loan or another source of cash is almost always cheaper.
How to avoid cash advances and build a cash cushion instead
The best way to avoid needing a cash advance is to keep some money in a savings account for emergencies. Even $500 to $1,000 set aside means you have cash available without paying credit card fees and interest. If you do not have savings yet, start small — even $25 per paycheck adds up.
If you find yourself needing cash advances regularly, that is a sign that your income and expenses are not aligned. A budget can help you see where your money is going and find places to cut back or earn more. Once you have a month or two of expenses saved, you will not need to rely on credit card cash advances for emergencies.
Frequently Asked Questions
What is the difference between a cash advance and a regular credit card purchase?
A regular purchase has a grace period (usually 21 to 25 days) before interest starts, and a standard APR. A cash advance charges a separate fee upfront, has a higher APR, and interest starts when ready with no grace period. This makes cash advances much more expensive.
Can I use my credit card at any ATM to get cash?
Most ATMs accept credit cards, but not all. Some ATMs only accept debit cards. Check the ATM screen before you insert your card. Also, using an ATM outside your card issuer's network may add an extra fee on top of the cash advance fee.
Does taking a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but it can if it raises your credit utilization ratio or if you miss a payment. Carrying a high balance on a cash advance for a long time also signals risk to lenders and can lower your score over time.
What happens if I cannot pay back a cash advance?
If you do not pay, the balance stays on your credit card and interest keeps growing. Missing payments will damage your credit score and may result in late fees. The card issuer can also raise your interest rate or close your account.
Is there a limit to how much cash I can withdraw?
Yes. Most card issuers set a cash advance limit that is lower than your total credit limit — sometimes 20 to 50 percent of your credit limit. You can contact your card issuer to find out your specific cash advance limit.