You can withdraw cash from a credit card at an ATM, but it costs more than a regular debit card withdrawal and counts as a loan you repay with interest
A cash advance is when you use your credit card to pull money out of an ATM or get cash back at a store. The money comes from your credit limit, not a bank account. You owe it back to your credit card company, and they charge you a fee upfront plus interest that starts accruing when ready — often at a higher rate than your regular purchase APR.
Most people should avoid cash advances unless they have no other option. The fees and interest make them expensive fast. But if you need to understand how they work or when you might use one, here is what actually happens.
Key Takeaways
- Cash advances charge an upfront fee (usually 3 to 5 percent of the amount) plus a higher interest rate than purchases, with interest starting the day you withdraw.
- You can get a cash advance at an ATM using your PIN, at a bank teller window, or at some retailers offering cash back.
- The amount you can withdraw is limited by your credit card's cash advance limit, which is often lower than your total credit limit.
- Repaying a cash advance should be your priority because the interest rate is typically 5 to 10 percentage points higher than your purchase rate.
Where you can actually withdraw cash using a credit card
The most common method is an ATM. You insert your credit card, enter your PIN, and select the cash amount. The ATM dispenses the money and your credit card company records it as a cash advance on your account.
You can also walk into a bank branch — even one that is not your own bank — and ask a teller for a cash advance. You hand over your credit card and they process it like a withdrawal, though they may charge an additional fee on top of the card issuer's fee.
Some retailers let you get cash back when you make a purchase, though this is less common with credit cards than with debit cards. You buy something small, ask for cash back, and the total (purchase plus cash) is charged to your card. The cash portion may or may not be treated as a cash advance depending on your card's terms — check with your issuer first.
The fees and interest you will pay
A cash advance fee is charged the moment you withdraw the money. This is usually a flat dollar amount or a percentage of the cash (typically 3 to 5 percent), whichever is higher. If you withdraw $300 and the fee is 4 percent with a $10 minimum, you pay $12 upfront. That $12 is added to your balance when ready.
Interest starts accruing the same day you withdraw the cash — there is no grace period like there often is for purchases. The interest rate on cash advances is usually 5 to 10 percentage points higher than your regular purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 28 percent. This compounds daily, so the longer you carry the balance, the more you owe.
Use a calculator to see the real cost. A $500 cash advance at a 4 percent fee ($20) plus 25 percent APR costs you roughly $104 in fees and interest if you pay it back in six months. That is a 20 percent cost on top of the money you borrowed.
Your cash advance limit is separate from your credit limit
Your credit card company sets a cash advance limit that is often much lower than your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $1,500. This limit is set by the issuer based on your creditworthiness and account history.
You can usually find your cash advance limit in your online account, on your statement, or by calling the customer service number on the back of your card. If you try to withdraw more than this limit, the ATM will decline the transaction.
Some issuers let you request a higher cash advance limit, but there is no reason to do so unless you have a genuine emergency. The higher limit just makes it easier to rack up expensive debt.
How to repay a cash advance quickly
Treat a cash advance as an emergency debt. Make it your first priority to pay it off because the interest rate is so high. Do not make only the minimum payment — that will take years and cost you hundreds in interest.
When you make a payment to your credit card, the issuer applies it first to your lowest-interest debt (usually purchases), then to higher-interest debt (usually cash advances). This means if you have both a purchase balance and a cash advance balance, your payment goes toward the purchase first, leaving the expensive cash advance to accrue interest. To pay off the cash advance faster, contact your issuer and ask if you can designate a payment specifically to the cash advance portion.
If you cannot pay the full amount when ready, pay as much as you can afford each month until it is gone. Even paying $100 extra per month instead of the minimum will cut your total interest cost significantly.
Alternatives to a credit card cash advance
Before you use a cash advance, consider other options. A personal loan from a bank or credit union usually has a lower interest rate and no upfront fee. A payday loan is faster but often more expensive, so compare the rates first. Borrowing from family or friends costs nothing if they agree. Selling something you own or picking up a side gig gets you cash without debt.
If you need cash because you are in a financial crisis — behind on bills, facing an emergency expense — look into whether you may have access to for a hardship program through your card issuer. Some offer temporary interest rate reductions or payment plans that are cheaper than a cash advance.
A debit card withdrawal from your own bank account is always the cheapest option if you have one available. If you do not have a bank account, a prepaid card or a credit union account might be worth opening before you resort to a cash advance.
What happens if you do not repay the cash advance
If you do not pay back the cash advance, it stays on your credit card balance and accrues interest every month. This damages your credit score because your credit utilization (the percentage of your credit limit you are using) goes up, and missed or late payments get reported to credit bureaus.
After 30 days of non-payment, the issuer reports it as late. After 60 days, your interest rate may increase further. After 180 days, the account may be charged off and sent to a collection agency. At that point, a collector can sue you for the debt, and a judgment against you can lead to wage garnishment or bank account levies depending on your state.
The best protection is to never borrow more on a cash advance than you can repay within a month or two. Treat it as a true emergency tool, not a regular source of cash.
Frequently Asked Questions
Can I get a cash advance if my credit card is maxed out?
No. A cash advance draws from your available credit, so you need unused credit limit to withdraw cash. If your card is maxed out, the ATM will decline the transaction. You would need to pay down your balance first or request a credit limit increase.
Do I have to use my PIN to get a cash advance?
At an ATM, yes — you need your PIN. At a bank teller window, you typically do not need a PIN; you just show your ID and the card. The method depends on where you are withdrawing from.
Is a cash advance the same as a balance transfer?
No. A balance transfer moves debt from one card to another (usually to get a lower rate). A cash advance gives you physical cash. They have different fees and interest rates, and balance transfers sometimes offer promotional rates while cash advances never do.
What if my credit card company denies my cash advance?
The most common reason is you have reached your cash advance limit. Less common reasons include fraud detection or account restrictions. Call your issuer to ask why it was declined and whether you can try again or request a higher limit.
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a bad idea. You are borrowing at a high rate to pay off debt at a lower rate, which costs you more money overall. Pay the other card directly from your bank account or income instead.