You can withdraw cash from a credit card, but it is not the same as using the card to buy something
A cash advance is a withdrawal of money from your credit card account, taken at an ATM, bank teller, or through a convenience check. The money goes into your pocket or bank account as actual cash, not a credit toward purchases. Your card issuer treats it as a loan against your credit limit, and you pay interest on it when ready — usually at a higher rate than your regular purchase APR.
Most credit cards allow cash advances, but the terms are deliberately less favorable than regular purchases. You will pay an upfront fee (often 3 to 5 percent of the amount withdrawn), a higher interest rate, and no grace period. Interest starts accruing the day you withdraw the money, even if you pay the full balance when your statement arrives.
Cash advances are a tool to have in an emergency, but they are expensive. Understanding how they work and what they cost helps you decide whether a cash advance makes sense for your situation, or whether another option is better.
Key Takeaways
- Cash advances charge an upfront fee (typically 3 to 5 percent) plus a higher interest rate than purchases, with interest starting when ready.
- You can withdraw cash at an ATM using your credit card PIN, at a bank teller with your card and ID, or by depositing a convenience check.
- The interest rate on a cash advance is usually 2 to 5 percentage points higher than your purchase APR and has no grace period.
- Payments toward your credit card balance go to purchases first, then to cash advances, so the advance stays on your account longer and costs more.
- Personal loans, payday loans, or borrowing from family are often cheaper than a cash advance if you need emergency cash.
Where and how to withdraw cash from your credit card
The most common method is an ATM withdrawal. Insert your credit card into an ATM, enter your PIN (which you may need to set up first if you have never done a cash advance), and select the withdrawal amount. The ATM will show you the fee before you confirm. Most ATMs allow withdrawals up to your available credit limit, though your card issuer may set a lower daily or monthly limit.
You can also visit a bank teller in person. Bring your credit card and a photo ID. Tell the teller you want a cash advance. They will process it like a withdrawal and give you cash on the spot. This method works even if you do not have a PIN set up, and it may allow you to withdraw larger amounts than an ATM.
A third option is a convenience check. Your card issuer may send these checks to you in the mail, or you can request them. You write a check against your credit line, deposit it into your bank account, and the amount is treated as a cash advance. This is useful if you need to transfer money to another account or pay a bill by check, but it still carries the same fees and interest rate as an ATM withdrawal.
Fees and interest rates for cash advances
Every cash advance charges an upfront transaction fee, usually between 3 and 5 percent of the amount withdrawn. On a $500 advance, that is $15 to $25 paid when ready. Some cards charge a flat fee instead (for example, $10 per advance), which is better if you are withdrawing a large amount but worse if you are withdrawing a small one. Check your card's terms to see which applies to you.
The interest rate on a cash advance is separate from your purchase APR and is almost always higher. If your purchase rate is 18 percent, your cash advance rate might be 23 or 25 percent. This rate is set by your card issuer and is listed in your card agreement. Unlike purchases, there is no grace period — interest starts accruing on day one, even if you pay the balance in full when your statement arrives.
Because of how credit card payments are applied, the cash advance stays on your account longer than you might expect. When you make a payment, the card issuer applies it to your lowest-interest debt first (usually purchases), then to higher-interest debt (the cash advance). If you have both purchases and a cash advance on your card, your payment will pay down the purchase balance while the cash advance sits there accruing interest at the higher rate.
How to set up your PIN for ATM withdrawals
If you have never done a cash advance, you may not have a PIN set up yet. You will need one to withdraw cash at an ATM. Contact your card issuer by phone (the number is on the back of your card) or log into your online account portal and look for a "Set PIN" or "Create PIN" option.
Some issuers let you create a PIN online when ready. Others require a phone call. The process usually takes a few minutes, and your PIN is active right away or within 24 hours. Write down your PIN and keep it somewhere safe — do not write it on your card or anywhere someone else might find it.
If you forget your PIN, call your card issuer again and request a reset. They will verify your identity and send you a new PIN by mail or set one up over the phone.
What your credit limit means for cash advances
Your credit limit is shared between purchases and cash advances. If your limit is $5,000 and you have $2,000 in purchases on your card, you can withdraw up to $3,000 in cash. However, your card issuer may set a separate cash advance limit that is lower than your total credit limit — for example, 30 percent of your credit limit. If your limit is $5,000 and your cash advance limit is 30 percent, you can only withdraw up to $1,500 in cash, even if you have more available credit.
Check your card agreement or call your issuer to find out your cash advance limit. Some issuers also set a daily withdrawal limit (for example, $500 per day at an ATM) to prevent fraud. If you need to withdraw more than the daily limit, you can make multiple withdrawals over several days, or visit a bank teller who may allow a larger single withdrawal.
Cheaper alternatives to a cash advance
Because cash advances are expensive, it is worth exploring other options before you use one. A personal loan from a bank or credit union usually has a lower interest rate than a cash advance, even if your credit is not perfect. You borrow a fixed amount, pay it back in monthly installments, and the interest rate is set upfront. The downside is that approval takes a few days, so this works for planned expenses but not true emergencies.
Borrowing from family or friends is free if they agree, though it can strain relationships. If you need money for a specific bill or expense, ask whether the creditor will accept a payment plan or extension instead of requiring full payment now.
A payday loan is faster than a personal loan but often more expensive than a cash advance, so it is usually not the better choice. A line of credit from your bank may offer better terms than a cash advance if you already have an account there. Some employers offer paycheck advances or emergency loans to employees — check with your HR department.
How a cash advance affects your credit score
A cash advance does not directly hurt your credit score the way a late payment does, but it can affect your score indirectly. The withdrawal increases your credit utilization ratio — the amount of your credit limit you are using. If you normally use 20 percent of your $5,000 limit and you withdraw $1,000 in cash, your utilization jumps to 40 percent. High utilization can lower your score slightly, even if you pay the balance on time.
The bigger risk is that the high interest rate makes it straightforward to carry a balance. If you cannot pay off the cash advance quickly, the interest compounds and you end up paying much more than you borrowed. A large balance that you carry month to month will hurt your score more than the initial withdrawal.
Frequently Asked Questions
Can I withdraw my entire credit limit as cash?
No. Most card issuers set a cash advance limit that is lower than your total credit limit, often 30 to 50 percent. You also cannot withdraw more than your available credit (limit minus current balance). Check your card agreement or call your issuer to find your specific cash advance limit.
What happens if I cannot pay back a cash advance?
The balance stays on your card and interest keeps accruing at the higher cash advance rate. If you miss payments, your credit score drops and your issuer may increase your interest rate further or close your account. Contact your issuer as soon as you know you cannot pay — they may offer a hardship plan or lower interest rate.
Is there a grace period for cash advances like there is for purchases?
No. Interest on a cash advance starts accruing when ready, even if you pay the full amount when your statement arrives. This is one of the main reasons cash advances are more expensive than regular purchases.
Can I use a credit card to withdraw cash at a grocery store or pharmacy?
No. Cashback at a store is a purchase, not a cash advance. You can only get a cash advance at an ATM, a bank teller, or by depositing a convenience check. Cashback does not charge the same fees or interest rate as a cash advance.
Do all credit cards allow cash advances?
Most do, but not all. Some cards designed for people rebuilding credit may not offer cash advances. Check your card agreement or call your issuer to confirm whether your card allows them.