Three ways to turn your credit card into cash
You can get cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer to your checking account, or a convenience check that comes in the mail. Cash advances are the most common but also the most expensive — they charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, often 25 percent or more. Balance transfers and convenience checks work differently and may cost less, depending on your card and bank.
The catch with all three is that you start paying interest when ready — there is no grace period like there is for regular credit card purchases. That means even if you pay the balance in full the next month, you will still owe interest for those 30 days. For this reason, getting cash from a credit card should be a last resort, not a regular habit.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent upfront plus interest rates that start when ready, making them expensive compared to regular purchases.
- You can get a cash advance at any ATM using your credit card PIN, at a bank teller window, or through a convenience check mailed by your card issuer.
- Balance transfers move money from your credit card to your bank account and may have lower fees than cash advances, though interest still starts right away.
- Your credit card issuer sets a cash advance limit that may be lower than your overall credit limit, so you cannot always withdraw your full available balance.
- If you need cash regularly, a personal loan or line of credit from a bank will cost far less than repeated credit card cash advances.
Cash advances at ATMs and bank tellers
A cash advance is the fastest way to get money. You use your credit card at any ATM that accepts it, enter your PIN, and withdraw cash just like you would from a debit card. You can also walk into a bank branch and ask a teller for a cash advance — they will swipe your card, verify your identity, and hand you cash on the spot.
The cost is when ready. Your card issuer charges a cash advance fee, usually 3 to 5 percent of the amount you withdraw. On a $500 advance, that is $15 to $25 right there. Then interest starts accruing the same day at a rate that is typically much higher than your purchase APR — often 25 to 30 percent or more. If you carry the balance for a month, you will owe roughly 2 to 2.5 percent in interest on top of the fee.
Your card issuer also sets a cash advance limit, which is separate from your overall credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your card's terms or call the number on the back to find out what yours is before you go to an ATM.
Balance transfers to your bank account
Some card issuers offer balance transfers that move money directly from your credit card to your checking account. This is different from a cash advance because the money goes to your bank, not an ATM. You typically request this through your card's online portal or by calling customer service.
Balance transfers sometimes charge a lower fee than cash advances — occasionally 1 to 3 percent instead of 3 to 5 percent — but not always. Check your card's terms before you request one. Interest still starts when ready at your cash advance rate, so the savings are modest. The main advantage is that you avoid ATM fees and the hassle of going to a bank branch.
Not all cards offer balance transfers, and some issuers limit how often you can do them. Ask your card issuer whether this option is available to you and what the fee would be.
Convenience checks from your card issuer
Your credit card company may mail you convenience checks that you can write like regular checks. You write one to yourself, deposit it in your bank account, and the amount is charged to your credit card. The fee and interest rate are usually the same as a cash advance, but some issuers offer promotional rates on convenience checks — occasionally 0 percent interest for a set period, like 6 months.
Read the fine print carefully. A 0 percent offer usually comes with a higher upfront fee (5 to 8 percent) and a important date — if you do not pay the balance off before the promotional period ends, the interest rate jumps to 25 percent or higher on any remaining balance. Also, if you miss a payment during the promotional period, the offer is usually cancelled and the full rate kicks in when ready.
Convenience checks are useful only if you have a promotional offer and a clear plan to pay off the balance before the rate increases. Otherwise, they cost the same as a cash advance.
How much a cash advance actually costs
Here is a concrete example. You withdraw $500 from your credit card at an ATM.
- Cash advance fee: $500 × 4 percent = $20
- Interest for one month at 27 percent APR: $500 × 0.27 ÷ 12 = $11.25
- Total cost for one month: $31.25
If you carry the balance for three months without paying anything down, the interest compounds and the total cost climbs to roughly $45 to $50. That is why a cash advance should only be for money you can pay back within a week or two.
Compare that to a personal loan from a bank or credit union, which might charge 10 to 15 percent interest with no upfront fee. On the same $500, a personal loan would cost roughly $4 to $6 per month in interest — a fraction of what a credit card charges. If you need cash regularly, a personal loan is almost always cheaper.
When a cash advance makes sense
A cash advance is reasonable only in a genuine emergency — your car breaks down and you need $300 to get it fixed, or you have an unexpected medical bill. You should only do it if you can pay the money back within a few weeks and if you have no other option, like a personal loan, a line of credit, or borrowing from family.
Do not use a cash advance to fund regular spending, to pay other debts, or to cover a shortfall in your budget. Each time you do, you are paying 3 to 5 percent plus 25 to 30 percent interest — that is a trap that gets harder to escape the longer you stay in it. If you find yourself needing cash advances regularly, that is a sign your budget does not match your income, and a cash advance will only delay the problem.
Alternatives that cost less
Before you use a credit card cash advance, explore these options:
- Personal loan from a bank or credit union: Usually 10 to 20 percent interest with no upfront fee. Takes a few days to a week to fund.
- Line of credit: Works like a credit card but often charges lower interest. You only pay interest on what you actually use.
- Paycheck advance: Some employers offer advances on your next paycheck with no fee. Ask your HR department.
- Borrowing from family or friends: Free if you can arrange it, but put the terms in writing to avoid misunderstandings.
- Payment plan with the creditor: If you owe a medical bill, utility bill, or other debt, call and ask whether they offer a payment plan. Many do.
Each of these costs less than a cash advance and gives you more time to repay. A personal loan from a credit union is often the cheapest option if you have a membership or can join one — credit unions typically charge lower rates than banks and are more willing to work with people who have imperfect credit.
Frequently Asked Questions
Does getting a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but carrying a high balance does. If you use a cash advance and pay it back quickly, the impact is minimal. If you carry the balance for months, your credit utilization goes up and your score drops. The damage is temporary — your score recovers as you pay the balance down.
Can I get a cash advance if I have bad credit?
Yes. Your cash advance limit is set by your card issuer when you open the account, and it does not change based on your credit score later. As long as your account is open and in good standing, you can use your cash advance limit regardless of what has happened to your credit since then.
What is the difference between a cash advance and a regular purchase?
A regular purchase has a grace period — you do not pay interest if you pay the full balance by the due date. A cash advance charges interest from day one, has a higher interest rate, and costs a fee upfront. That is why the same $500 costs you $31 in a month on a cash advance but $0 on a regular purchase if you pay it off on time.
Can I transfer a cash advance balance to another credit card?
Usually no. Most balance transfer offers exclude cash advances — they only explore to regular purchases. Check your new card's terms before you assume you can transfer a cash advance balance at a promotional rate.
What happens if I cannot pay back a cash advance?
The balance stays on your credit card and interest keeps accruing at the cash advance rate. If you miss payments, late fees are added and your credit score drops. After 180 days of missed payments, the debt may be sent to a collection agency. If you are struggling to pay, contact your card issuer and ask about hardship programs — some offer lower interest rates or payment plans for people in financial difficulty.