You can withdraw cash at an ATM using a credit card, but it costs more than a debit card and starts charging interest when ready
Most credit cards let you take cash out at an ATM, but the transaction is treated differently than a purchase. The moment you withdraw the cash, your card issuer charges a cash advance fee — usually 3% to 5% of the amount, with a minimum of $2 to $10. Unlike a purchase, which has a grace period before interest kicks in, a cash advance starts accruing interest the same day. That interest rate is often higher than your regular purchase rate, sometimes 5 to 10 percentage points above it.
The process itself is straightforward: insert your card, enter your PIN, select "cash withdrawal" or "cash advance," choose your amount, and take your cash. But the cost makes it worth understanding when this makes sense and when it does not.
Key Takeaways
- Cash advances charge a fee (typically 3% to 5%) plus a higher interest rate than purchases, with interest starting when ready rather than after a grace period.
- Your credit card's cash advance limit may be lower than your credit limit, and you can find this number in your cardholder agreement or by calling your issuer.
- ATM operators may charge their own fee on top of your card issuer's fee, so you could pay $5 to $15 just to withdraw $100.
- A debit card, personal loan, or payday loan alternative may cost less depending on your situation, though each has its own drawbacks.
What happens when you insert your credit card into an ATM
When you put your credit card into an ATM, the machine reads your card number and connects to your card issuer's system to check your available cash advance limit. This limit is separate from your regular credit limit — your issuer sets it based on your creditworthiness, and it is often 20% to 50% of your total credit limit. If you have a $5,000 credit limit, your cash advance limit might be $1,000 or $2,500.
After you enter your PIN and request an amount, the ATM checks whether you have enough available cash advance limit. If you do, it dispenses the cash and records the transaction. If you do not, the machine declines the request. You can find your cash advance limit by logging into your online account, checking your cardholder agreement, or calling the customer service number on the back of your card.
The fees and interest you will pay
A cash advance triggers two separate charges. First, your card issuer charges a cash advance fee — a percentage of the amount withdrawn, usually 3% to 5%, with a floor of $2 to $10. If you withdraw $200, a 4% fee costs $8. If you withdraw $50, a $2 minimum fee still applies, making the percentage much higher.
Second, the ATM operator may charge their own fee, typically $1.50 to $3 per transaction. Some ATMs in bars, casinos, or convenience stores charge $3 to $5. This fee appears on your receipt and is separate from your card issuer's fee. You could pay $12 to $15 total just to withdraw $100.
Interest begins accruing the day you withdraw the cash — there is no grace period. The interest rate for cash advances is usually 2 to 10 percentage points higher than your purchase rate. If your purchase APR is 18%, your cash advance APR might be 25% or 28%. On a $500 cash advance at 25% APR, you would owe about $10 in interest after one month if you made no payment.
When a credit card cash advance makes sense
A credit card cash advance is rarely the cheapest option, but it may be the fastest when you need cash urgently and have no other way to get it. If you have an emergency and your debit account is empty, a cash advance gets you money in minutes rather than hours or days. The cost is high, but sometimes speed matters more.
A cash advance also makes sense if you are in a situation where other options are worse. If you would otherwise take out a payday loan at 400% APR, a credit card cash advance at 25% APR is cheaper, even with the fees. If you have a credit card with a 0% introductory rate on cash advances (rare, but they exist), the fee is your only cost for the duration of the promo period.
Alternatives that may cost less
Before you use a credit card at an ATM, consider whether another option costs less. A debit card withdrawal has no fee if you use your own bank's ATM, and no interest charge at all. If you have access to your debit account, this is almost always cheaper. Some banks charge $1 to $3 if you use an out-of-network ATM, which is still less than a credit card cash advance.
A personal loan from a bank or credit union typically charges 6% to 36% APR with no cash advance fee. If you need $500 and can wait a few days for approval, a personal loan may cost less over time than a credit card cash advance, especially if you cannot pay it back quickly.
A balance transfer from another credit card may work if that card offers a 0% introductory rate. You would transfer a balance rather than withdraw cash, but the effect is the same: you get money without when ready interest. The balance transfer fee is usually 3% to 5%, matching a cash advance fee, but the 0% period gives you time to pay it back interest-free.
A payday loan or title loan is almost always more expensive than a credit card cash advance and should be a last resort. Payday loans charge 400% APR or more, and title loans put your car at risk. Use these only if a credit card is not an option.
How to minimize the cost if you do take a cash advance
If you decide a credit card cash advance is your best choice, take steps to pay it back as quickly as possible. Interest accrues daily, so every day you carry the balance costs you money. Pay more than the minimum payment if you can, because the minimum payment usually covers only interest and fees, leaving the principal untouched.
Use your bank's ATM rather than an out-of-network machine to avoid the operator fee. If your card issuer is a national bank like Chase or Bank of America, you can use their ATMs for free. If your issuer is a smaller bank or credit union, ask whether they have a network of partner ATMs you can use without a fee.
Do not take out more cash than you need. Each withdrawal triggers a separate fee, so one $200 withdrawal costs less than four $50 withdrawals. Plan your cash needs ahead of time so you can minimize the number of transactions.
What to do if you cannot pay back the cash advance
If you take out a cash advance and then cannot pay it back, the balance rolls into your regular credit card balance and continues to accrue interest at the cash advance rate. This can trap you in a cycle where interest charges grow faster than you can pay them down. If this happens, contact your card issuer and ask whether they offer a hardship program or lower interest rate. Some issuers will work with you if you explain your situation.
You can also explore a balance transfer to a card with a lower rate, or a debt consolidation loan that combines your credit card balance with other debts at a single, lower interest rate. These options take time to set up, but they can save you money if you are carrying a large cash advance balance.
Frequently Asked Questions
Can I use a credit card at any ATM?
Most ATMs accept credit cards, but some machines in banks or credit unions may only accept debit cards. Look for the Visa or Mastercard logo on the machine before you insert your card. If the machine declines your card, try a different ATM or ask a bank teller for help.
What is the difference between a cash advance and a regular purchase?
A purchase has a grace period (usually 21 to 25 days) before interest starts, and a lower interest rate. A cash advance charges a fee when ready, starts accruing interest the same day, and uses a higher interest rate. This makes cash advances much more expensive for the same amount of money.
Will a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but it does increase your credit utilization — the percentage of your available credit you are using. If your cash advance pushes your total balance high relative to your credit limit, your score may drop slightly. Paying it back quickly will recover the score.
Can I get a cash advance if my credit card is maxed out?
No. A cash advance uses your available credit, so if your credit limit is fully used, you cannot take out a cash advance. You would need to pay down your balance first or request a credit limit increase from your issuer.
Is there a limit to how much cash I can withdraw?
Yes. Your card issuer sets a cash advance limit, which is usually lower than your total credit limit. You also cannot withdraw more than your available credit. Some ATMs have daily withdrawal limits as well, typically $500 to $1,000 per day. Check your cardholder agreement or call your issuer to find out your specific limits.