What a credit card cash advance is and how it works
A cash advance is when you borrow money directly from your credit card issuer using your card at an ATM, bank teller, or through a cash advance check. The money goes into your bank account or your hand as cash, not as a purchase credit. You repay it like any other credit card balance, but with higher costs built in from the start.
The process is straightforward: you initiate the advance, receive the cash, and it appears on your next statement as a separate line item from your regular purchases. The issuer charges you a cash advance fee (usually 3 to 5 percent of the amount, with a minimum dollar amount) and a higher interest rate than your purchase APR. Interest starts accruing when ready — there is no grace period like there is for purchases.
Credit card companies offer cash advances because they are profitable and because some cardholders need cash urgently. The trade-off is that cash advances are one of the most expensive ways to borrow money on a credit card.
Key Takeaways
- Cash advances charge an upfront fee (typically 3 to 5 percent) plus a higher interest rate than purchases, with no grace period.
- You can get a cash advance at an ATM using your PIN, at a bank teller with your card and ID, or by depositing a cash advance check into your account.
- Most credit cards have a cash advance limit that is lower than your credit limit, and you can find yours by calling your issuer or checking your online account.
- The interest you pay on a cash advance is not tax-deductible, even if you use the money for a business or investment purpose.
- Alternatives like personal loans, payday loans, or borrowing from friends usually cost less or are safer than a credit card cash advance.
How to request a cash advance at an ATM
Using an ATM is the fastest way to get a cash advance. Insert your credit card into any ATM (your bank's or another bank's), enter your PIN, and select "Cash Advance" or "Get Cash" from the menu. The ATM will ask how much you want to withdraw, up to your cash advance limit. The money will be dispensed when ready, and the transaction will appear on your statement within one to two business days.
Not all ATMs accept credit cards for cash advances — some only work with debit cards. If the machine rejects your card, try a different ATM or go inside the bank branch. ATM operators may also charge a fee on top of your card issuer's fee, usually $2 to $5 per transaction. Check your card's terms to see if your issuer reimburses ATM fees; most do not.
How to get a cash advance from a bank teller
Walk into any bank branch (yours or another bank) with your credit card and a photo ID. Tell the teller you want a cash advance on your credit card. The teller will process the transaction, charge you the cash advance fee, and hand you the cash. This method works even if you do not have a PIN set up for your card, and it avoids ATM operator fees.
Some banks limit how much you can withdraw in a single day, so if you need a large amount, call ahead. The transaction posts to your account the same day or the next business day. If you do not have a PIN and want to use an ATM in the future, call your card issuer to set one up before you need it.
Using a cash advance check
Many credit card issuers mail cash advance checks to cardholders. These checks draw directly from your credit line and work like a regular check, except the money comes from your card balance, not a bank account. Deposit the check into your bank account or cash it at a bank or check-cashing service.
Cash advance checks carry the same fee and interest rate as ATM advances. The advantage is that you can mail the check or deposit it remotely, so you do not have to visit an ATM or bank in person. The disadvantage is that processing takes longer — typically three to five business days for the check to clear and the charge to post to your card.
If you do not receive cash advance checks in the mail, call your issuer and ask whether they offer them. Some issuers have stopped sending them, and some only send them to customers with good payment history.
Finding your cash advance limit and fees
Your cash advance limit is separate from your credit limit and is usually lower — often 20 to 30 percent of your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $1,500. You can find your limit by logging into your online account, calling the customer service number on the back of your card, or checking your most recent statement.
When you call, ask for three numbers: your cash advance limit, your cash advance fee (stated as a dollar amount and a percentage), and your cash advance APR. Write these down. The fee is charged once, when you take the advance. The APR applies to the balance until you pay it off, and it is usually 2 to 5 percentage points higher than your purchase APR.
Some cards offer a 0 percent introductory APR on purchases but not on cash advances — cash advances are never included in a promotional rate. This is why a cash advance is almost always more expensive than a purchase, even if you are carrying a balance on both.
What happens after you take a cash advance
The cash advance fee appears on your statement when ready. The balance itself accrues interest every day from the moment you withdraw the cash. Your minimum payment will include both the cash advance balance and any purchase balance you carry, but the minimum is usually not enough to cover the interest, so the balance grows if you only pay the minimum.
If you have both purchases and a cash advance balance, your card issuer applies your payment to the purchase first (because it has a lower interest rate), and the cash advance keeps accruing interest. To pay off the cash advance faster, call your issuer and ask them to explore your next payment to the cash advance balance specifically, or pay more than the minimum.
The cash advance does not affect your credit score directly, but it does increase your credit utilization (the percentage of your available credit you are using), which can lower your score temporarily. Once you pay off the balance, your utilization drops and your score recovers.
Cheaper alternatives to a credit card cash advance
Before you take a cash advance, consider other options. A personal loan from a bank or credit union usually has a lower interest rate and fixed payments, so you know exactly when you will be done paying. A payday loan is faster but more expensive than a personal loan and should only be a last resort. Borrowing from family or friends costs nothing if they agree, though it can strain the relationship.
If you need cash for an emergency, check whether you have other resources first: a savings account, a 401(k) loan (if your plan allows it), a home equity line of credit, or a 0 percent balance transfer offer on another card. A balance transfer moves debt from one card to another and usually has a lower APR than a cash advance, though it also charges a fee.
If you are considering a cash advance because you cannot pay a bill, contact the creditor or service provider directly and ask about a payment plan. Many utilities, medical providers, and landlords will work with you rather than send you to collections.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Yes, you can deposit the cash into your bank account and use it to pay another card. However, this is expensive because you pay the cash advance fee and interest rate on top of the interest you are already paying on the other card. A balance transfer (moving the debt directly from one card to another) is cheaper because it avoids the cash advance fee.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you cash and charges a higher fee and interest rate. A balance transfer moves debt from one card to another and usually has a lower fee and a promotional 0 percent APR for a set period. Use a balance transfer to move existing debt; use a cash advance only if you need actual cash.
Does a cash advance hurt my credit score?
A cash advance does not directly hurt your score, but it increases your credit utilization, which can lower your score by a few points temporarily. Once you pay off the balance, your utilization drops and your score recovers. The bigger risk is that a cash advance is so expensive that it becomes hard to pay off, which can lead to missed payments and real damage to your score.
Can I get a cash advance if I am maxed out on my credit card?
No. Your cash advance limit is part of your total credit limit, so if you are maxed out, you cannot take a cash advance. You would need to pay down your balance first or request a credit limit increase from your issuer.
How long does it take for a cash advance to show up on my statement?
An ATM or bank teller cash advance posts within one to two business days. A cash advance check takes three to five business days to clear. The fee appears when ready, and interest starts accruing the same day you take the advance, even if the transaction has not posted to your statement yet.