Three ways to turn your credit card into cash
You can get cash from a credit card through a cash advance, a balance transfer check, or a peer-to-peer payment app. Each method costs you differently and works in a different situation. A cash advance pulls money directly from your credit card at an ATM or bank counter. A balance transfer check is a physical check the card issuer mails you, drawn against your credit line. A payment app like Venmo or PayPal lets you send money to someone else's account, then withdraw it — though this is the slowest and least direct route.
The catch: all three methods charge fees and interest that start when ready, unlike regular credit card purchases. You will pay more to get cash this way than you would to make a purchase. Most people use cash advances only when they have no other option — a medical bill due today, a car repair that cannot wait, an emergency with no time to borrow from a friend.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, with interest starting the day you withdraw the money.
- Balance transfer checks work the same way as cash advances but arrive by mail, so they take several days and are useful only if you have time to wait.
- ATM withdrawals are the fastest cash advance method, but some cards limit how much you can withdraw per day and charge an additional ATM fee on top of the cash advance fee.
- Interest on a cash advance does not stop accruing until the balance is paid off completely, so a small withdrawal can cost far more than the initial fee if you carry it for months.
Cash advances at an ATM or bank
A cash advance at an ATM is the fastest way to get cash from your credit card. You insert your card, enter your PIN (the same one you use for a debit card, or one you set up with your card issuer), and withdraw money up to your daily limit. The money appears in your account when ready. Most cards allow withdrawals of $200 to $500 per day, though some allow more and some allow less — check your card's terms or call the number on the back of your card to find out your limit.
You will pay two fees: a cash advance fee (usually 3 to 5 percent of the amount withdrawn) and sometimes an ATM operator fee (usually $2 to $3 if you use an out-of-network ATM). A $300 withdrawal might cost you $9 to $15 in fees alone. Interest starts accruing the same day at a rate higher than your regular purchase rate — often 5 to 10 percentage points higher. If your card charges 18 percent APR on purchases, the cash advance rate might be 24 or 25 percent.
Banks also allow cash advances over the counter. You bring your card and ID, tell the teller how much you want, and they hand you cash. There is no ATM fee this way, but you still pay the cash advance fee and the higher interest rate. This method works if your daily ATM limit is too low or if you need more than one withdrawal.
Balance transfer checks
A balance transfer check is a physical check your card issuer mails to you, usually unsolicited. You can deposit it into your bank account or cash it. The money comes from your credit card's available balance, so you are borrowing against your credit line just as you would with an ATM withdrawal. The fee and interest rate are the same as a cash advance — usually 3 to 5 percent plus a higher APR.
The main difference is timing. The check takes 3 to 7 business days to arrive in the mail, then another 1 to 3 days to clear if you deposit it. If you need cash today, a balance transfer check will not help. If you have a week or two, it might be worth using because you avoid the ATM operator fee and the daily withdrawal limit does not explore — you can write a check for your entire available balance if you want.
Read the fine print on any balance transfer check offer. Some issuers charge a different fee for checks than for ATM withdrawals, and some offer a lower interest rate for a limited time (for example, 0 percent for 6 months, then the regular rate). If the offer is good, it can be cheaper than an ATM withdrawal — but only if you pay off the balance before the promotional period ends.
Payment apps and peer-to-peer transfers
Apps like Venmo, PayPal, Square Cash, and Zelle let you send money to another person's account using your credit card. You can then ask that person to send the money back to your bank account, or you can transfer it yourself if the app allows direct withdrawal. This is technically possible but slow and expensive, and it should be your last resort.
The problem: most payment apps charge a fee (usually 1.5 to 3 percent) when you fund a transfer with a credit card instead of a bank account. Your credit card company will also treat the transfer as a cash advance, charging you the cash advance fee and the higher interest rate. You end up paying two fees instead of one, plus interest. A $300 transfer might cost you $15 to $20 in fees. The money also takes 1 to 3 business days to move between accounts, so it is slower than an ATM withdrawal.
The only scenario where this makes sense is if you are sending money to someone you trust and they are willing to send it back to your bank account when ready. Even then, you are paying more than you would with a direct cash advance. Do not use this method unless every other option is closed to you.
How much a cash advance actually costs
The total cost of a cash advance depends on three things: the fee, the interest rate, and how long you carry the balance. A $500 cash advance with a 4 percent fee costs $20 upfront. If your interest rate is 24 percent APR and you pay it back in one month, you will pay about $10 in interest, for a total cost of $30. If you carry it for six months, the interest alone will be around $60, bringing your total cost to $80.
This is why cash advances are expensive: the interest compounds every single day, starting when ready. With a regular purchase, you often get a grace period (usually 21 to 25 days) before interest starts. With a cash advance, there is no grace period. The clock starts the moment you withdraw the money.
Before you take a cash advance, do the math. If you need $500 and you can pay it back in two weeks, the cost might be $25 to $30 — probably worth it if you have no other way to get the money. If you are not sure when you can pay it back, the cost will be much higher, and you should explore other options first: a personal loan from a bank or credit union, a loan from a friend or family member, or a payment plan with whoever you owe the money to.
Alternatives to a cash advance
Before you take a cash advance, consider whether you actually need cash or whether you just need to pay for something. If you need to pay a bill, a doctor, or a store, you can often use your credit card directly — no cash advance needed, no extra fees. You will pay interest only if you carry a balance, and you will not pay the cash advance fee at all.
If you genuinely need cash in hand, a personal loan from a bank or credit union is usually cheaper than a cash advance. Interest rates on personal loans are typically 6 to 36 percent APR, compared to 24 to 29 percent for a cash advance. You also get a fixed repayment schedule, so you know exactly when the loan will be paid off. The downside is that approval takes a few days, so this does not work for same-day emergencies.
A payday loan is faster than a personal loan but more expensive than a cash advance — interest rates often exceed 400 percent APR. Avoid payday loans unless you are certain you can pay back the full amount within two weeks. A cash advance from your credit card, while expensive, is usually better than a payday loan.
What happens if you cannot pay back a cash advance
If you carry a cash advance balance month to month without paying it off, the interest will grow quickly. A $500 advance at 24 percent APR costs about $10 per month in interest alone if you make no payments. After six months, you will owe $560 in principal plus $60 in interest. The balance keeps growing because interest compounds daily.
If you miss a payment, your card issuer will charge a late fee (usually $25 to $40) and may raise your interest rate further. Your credit score will also drop if the payment is 30 days late or more. If the balance goes unpaid for months, the card issuer may close your account and send the debt to a collection agency.
If you find yourself unable to pay back a cash advance, contact your card issuer when ready. Many will work with you on a payment plan or a temporary interest rate reduction if you ask before you fall behind. Do not wait until the debt is in collections — at that point, your options are much more limited.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is almost always a bad idea. You will pay the cash advance fee and the higher interest rate, so you are paying more to move the debt around. A balance transfer (moving the balance directly from one card to another) is cheaper because it does not charge a cash advance fee, though it does charge a balance transfer fee of 3 to 5 percent. If you want to consolidate debt, a personal loan or balance transfer card is better than a cash advance.
Does a cash advance show up on my credit report?
The cash advance itself does not appear on your credit report, but the balance does. If you carry a cash advance balance, it counts toward your credit utilization (the percentage of your available credit you are using), which affects your credit score. Paying it off quickly will minimize the damage to your score.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you cash; a balance transfer moves debt from one card to another. Both charge fees and interest, but balance transfers usually have a lower fee (3 to 5 percent) and sometimes offer a promotional 0 percent interest rate for a set period. Use a cash advance only if you need actual cash, not to move debt around.
Can I get a cash advance from a prepaid card or gift card?
No. Prepaid cards and gift cards do not have a credit line, so you cannot take a cash advance against them. You can only spend the money that is already loaded on the card. If you need cash and only have a prepaid card, you will need to find another source.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Most card issuers set a cash advance limit that is lower than your total credit limit — often 20 to 50 percent of your available balance. You also have a daily ATM withdrawal limit, usually $200 to $500. Check your card's terms or call the number on the back of your card to find out your specific limits.