Yes, you can withdraw cash on a credit card, but it costs more than a regular purchase
A cash advance is a withdrawal of cash from your credit card account, either at an ATM or over the counter at a bank. The money comes from your credit card's available balance, not from a checking account. Unlike a debit card withdrawal, a cash advance charges you fees and interest from the moment you take the money out — there is no grace period like there is for regular purchases.
The process itself is straightforward: insert your card into an ATM, enter your PIN, and withdraw cash up to your daily limit. But the cost structure is what matters. Most credit cards charge a cash advance fee (usually 3% to 5% of the amount withdrawn, with a minimum of $2 to $10), plus a higher interest rate than regular purchases. That interest starts accruing when ready, not at the end of a billing cycle.
Key Takeaways
- Cash advances charge a fee (typically 3% to 5% of the amount) plus a higher interest rate that starts when ready, making them expensive compared to regular credit card purchases.
- Your credit card's cash advance limit is often lower than your overall credit limit, and you can find it in your cardholder agreement or by calling your card issuer.
- Interest on a cash advance accrues daily from the withdrawal date with no grace period, so the longer you carry the balance, the more you pay.
- ATM withdrawals, bank teller withdrawals, and convenience checks all count as cash advances and carry the same fees and interest rates.
How much does a cash advance actually cost
The total cost depends on three things: the fee, the interest rate, and how long you carry the balance. Let's say you withdraw $500 on a card that charges a 4% cash advance fee and a 24% annual interest rate. The fee alone is $20. If you pay back the $520 in one month, you'll owe roughly $10 in interest. If you take three months to repay, you'll owe about $30 in interest. The longer the balance sits, the more expensive it becomes.
Your card's cash advance interest rate is usually printed in your cardholder agreement or available online through your account. It's almost always higher than the rate for regular purchases — sometimes 5 to 10 percentage points higher. Some cards charge the same rate for both, but this is rare. Check your specific card's terms before you withdraw, because the cost difference between cards can be substantial.
What limits explore to cash advances
Your credit card issuer sets a separate cash advance limit, which is often much lower than your overall credit limit. You might have a $5,000 credit limit but only a $500 cash advance limit. This limit is set by the card issuer based on your creditworthiness and account history, and you can't change it yourself. To find your limit, check your cardholder agreement, log into your online account, or call the customer service number on the back of your card.
There's also a daily ATM withdrawal limit, which is typically $500 to $1,000 per day depending on your card. If you need more than that, you can make multiple withdrawals over several days, but each one triggers a separate fee. Some cards allow you to withdraw cash over the counter at a bank branch without hitting the ATM limit, though you'll still pay the cash advance fee and interest.
When a cash advance makes sense (and when it doesn't)
A cash advance is rarely the cheapest way to get cash, but there are situations where it's the only option. If you need cash urgently and have no access to a checking account, no debit card, and no other borrowing options, a cash advance is faster than a personal loan. It's also faster than a payday loan in most cases, since you can withdraw the money when ready at an ATM.
What doesn't make sense is using a cash advance to pay for something you could pay for with the card itself. If you're at a store that accepts credit cards, use the card — you'll pay no cash advance fee and you'll get a grace period on the interest. A cash advance should only be your choice when the merchant won't take a card or when you genuinely need physical cash and have no other way to get it.
How cash advances affect your credit score
A cash advance itself doesn't show up on your credit report as a separate item — it's just part of your credit card balance. But it does affect your credit score in two ways. First, it increases your credit utilization ratio (the percentage of your available credit you're using), which can lower your score if it pushes you above 30% of your total limit. Second, if you carry the balance and miss a payment, that missed payment will damage your score just like any other late payment.
The cash advance doesn't hurt your score straightforward because you took it. It hurts your score if it causes you to carry a high balance or if you can't pay it back on time. This is another reason to repay a cash advance as quickly as possible — the longer you carry it, the more it costs in interest and the more it damages your credit profile.
Alternatives to a credit card cash advance
If you need cash, consider these options first. A debit card withdrawal from your checking account costs nothing and has no interest. A personal loan from a bank or credit union usually has a lower interest rate than a credit card cash advance, though it takes longer to process. A payday loan is faster but often more expensive than a cash advance, so compare the total cost before you choose.
If you're in a bind and need cash for an emergency, ask whether you actually need cash or whether you could use the card itself. Many emergencies (medical bills, car repairs, groceries) can be paid with a credit card, which avoids the cash advance fee entirely. If you truly need physical cash, a cash advance is faster than most alternatives, but it should be a last resort, not a first choice.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Yes, you can withdraw cash and use it to pay another card, but it's expensive. You'll pay the cash advance fee and interest rate on the withdrawal, then pay interest on the other card's balance. This strategy only makes sense if the other card has a much higher interest rate and you can pay off the cash advance quickly.
What's the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash at an ATM or bank. A balance transfer moves debt from one card to another. Both charge fees and interest, but a balance transfer sometimes offers a lower introductory rate for a set period. Use a balance transfer to move existing debt; use a cash advance only when you need actual cash.
Will my credit card company notify me about cash advance fees?
The fee will appear on your next billing statement, but you won't get a separate warning before you withdraw. The fee amount depends on your card's terms, which are in your cardholder agreement. Check your agreement before you withdraw so you know exactly what you'll pay.
Can I get a cash advance on a secured credit card?
Most secured cards allow cash advances, though the limit is often lower than on unsecured cards. Check your cardholder agreement or contact your card issuer to confirm whether cash advances are available on your specific card and what the fee and interest rate are.