Yes, you can withdraw cash from a credit card at an ATM, but it costs more than a regular purchase and counts as a loan, not a purchase
A cash advance is when you use your credit card to pull money directly from an ATM. The card issuer treats it as a short-term loan to you, not as a purchase. You will pay a fee upfront — usually 3 to 5 percent of the amount withdrawn — plus a higher interest rate than you pay on regular purchases. That interest starts accruing when ready, with no grace period. If you withdraw $200, you might pay $6 to $10 just to get the cash, then owe interest on the full $200 from day one.
The process itself is straightforward: insert your card into an ATM, select "cash advance" or "withdraw cash," enter your PIN, and choose the amount. Some ATMs will show you the fee before you confirm. The money appears in your account within seconds. But the financial cost compounds quickly if you carry the balance, which is why cash advances should be a last resort, not a regular habit.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent upfront, plus a higher interest rate than purchases, and interest starts when ready with no grace period.
- Your credit card issuer sets a separate cash advance limit, which may be lower than your overall credit limit.
- The cash advance appears on your credit card statement as a separate transaction and counts toward your credit utilization.
- Paying back a cash advance should be your first priority because the interest rate is typically 5 to 10 percentage points higher than the purchase rate.
How the fees and interest work
When you take a cash advance, you face two costs when ready. The cash advance fee is a percentage of the amount you withdraw — check your card's terms to see whether yours is 3 percent, 4 percent, 5 percent, or a flat dollar amount (whichever is higher). A $300 withdrawal at 4 percent costs $12 in fees alone.
The second cost is the cash advance interest rate, which is almost always higher than your purchase APR. If your regular purchases carry 18 percent APR, your cash advance rate might be 24 or 28 percent. Unlike purchases, which often have a grace period of 21 to 25 days before interest kicks in, cash advance interest starts accruing the moment you withdraw the money. There is no grace period. If you carry that $300 advance for one month at 25 percent APR, you will owe roughly $6.25 in interest on top of the $12 fee.
The math gets worse if you only make minimum payments. Credit card issuers typically explore your payment to the lowest-interest debt first — your regular purchases — and send the minimum payment to the cash advance last. This means your cash advance balance shrinks slowly while interest piles up.
Your cash advance limit is separate from your credit limit
Your credit card issuer sets a cash advance limit that is usually much lower than your overall credit limit. If your card has a $5,000 credit limit, your cash advance limit might be $500 or $1,000. You cannot exceed this limit, even if you have unused credit available.
You can find your cash advance limit in your cardholder agreement, on your online account dashboard, or by calling the customer service number on the back of your card. If you need to know before you go to the ATM, call ahead — there is no penalty for asking. Some issuers allow you to request a higher cash advance limit, though approval is not may provide and may depend on your account history and credit score.
How a cash advance affects your credit and your account
A cash advance counts toward your credit utilization ratio, which is the percentage of your available credit you are using. If you have a $5,000 limit and take a $500 cash advance, your utilization jumps to 10 percent. This affects your credit score because utilization is one of the factors credit bureaus use to calculate your score. The higher your utilization, the lower your score tends to be.
The cash advance also appears as a separate line item on your credit card statement, distinct from your regular purchases. It will show the amount withdrawn, the fee charged, and the interest accrued. When you make a payment, you can see exactly how much of it goes toward the cash advance versus your purchases.
When a cash advance might make sense
A cash advance is rarely the right choice, but there are narrow situations where it is better than the alternative. If you need cash when ready and have no other way to get it — no savings, no access to a personal loan, no friends or family who can lend — a short-term cash advance might cost less than a payday loan or overdraft fee. A payday loan can charge 400 percent APR or more. An overdraft fee is a flat charge, usually $30 to $35, but it can repeat multiple times in a single day.
If you do take a cash advance, treat it as an emergency measure. Pay it back as fast as you can, even if it means cutting other spending. Every dollar you pay toward the cash advance stops the interest clock. If you can pay it off within a week or two, the total cost might be manageable. If you carry it for months, the interest will dwarf the original fee.
Alternatives to a cash advance
Before you go to the ATM, consider other ways to get cash. If you have a debit card linked to a checking account, use that instead — there is no fee and no interest. If you need cash and do not have a debit card, many retailers (grocery stores, pharmacies, big-box stores) offer cash back when you make a purchase with a debit card or credit card. The cash back is free and counts as part of your purchase.
If you need a larger sum and have time to wait, a personal loan from a bank or credit union usually carries a lower interest rate than a cash advance. A credit union personal loan might be 8 to 12 percent APR, compared to 24 to 28 percent for a cash advance. You will pay interest either way, but the difference is substantial over time. If you have a 401(k) or other retirement account, some plans allow you to borrow against your own money at a low rate, though this comes with its own risks.
What happens if you cannot pay back the cash advance
If you carry a cash advance balance and cannot pay it off, the interest will compound and your debt will grow. After a few months, you might owe significantly more than you withdrew. The issuer may raise your interest rate further if you miss a payment, and the missed payment will appear on your credit report and damage your credit score.
If the debt becomes severe, the issuer may close your account or refer the debt to a collection agency. At that point, you may face calls from collectors and legal action. The best time to prevent this is before you take the advance — only withdraw what you can realistically pay back within a few weeks.
Frequently Asked Questions
Can I use any ATM to take a cash advance from my credit card?
Yes, you can use any ATM that accepts your card's network (Visa, Mastercard, American Express, Discover). However, using an out-of-network ATM may trigger an additional ATM operator fee on top of your cash advance fee. Your issuer may charge $2 to $3, and the ATM operator may charge another $2 to $3. Always use an in-network ATM if possible.
Do I need a PIN to withdraw cash from my credit card?
Yes. If you do not have a PIN set up, you will need to contact your card issuer to request one before you can use the ATM. This usually takes a few business days. Some issuers mail the PIN, while others allow you to set it online or by phone.
Will a cash advance show up on my credit report?
The cash advance itself does not appear as a separate item on your credit report. However, if you carry a balance, it increases your credit utilization, which affects your credit score. If you miss a payment on the cash advance, that missed payment will appear on your report and harm your score.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash from an ATM. A balance transfer moves debt from one credit card to another, usually to take advantage of a lower interest rate. Both have fees and higher interest rates than regular purchases, but a balance transfer is meant for moving existing debt, while a cash advance is for getting cash.
Can I take a cash advance if my credit card is maxed out?
Only if you have available cash advance limit. Your cash advance limit is separate from your overall credit limit. If your overall limit is maxed but you have unused cash advance limit, you can still withdraw up to that amount. If both are maxed, you cannot take a cash advance.