Getting cash from a credit card costs more than you think
You can withdraw cash using your credit card at an ATM, but the cost is when ready and steep. Most credit card issuers charge a cash advance fee — usually 3% to 5% of the amount you withdraw, with a minimum of $5 to $10. On top of that, the interest rate on a cash advance is typically 2% to 3% higher than your regular purchase APR, and interest starts accruing the same day you withdraw the money, with no grace period. A $500 cash advance might cost you $15 to $25 in fees alone, plus interest that begins compounding when ready.
Before you use this method, understand that it is one of the most expensive ways to borrow money available to you. Credit card cash advances are designed for genuine emergencies when no other option exists — not for everyday cash needs or to move money between accounts.
Key Takeaways
- Cash advances charge a fee of 3% to 5% plus a higher interest rate than purchases, with interest starting when ready and no grace period.
- You can withdraw cash at any ATM using your credit card's PIN, which you may need to set up with your card issuer first.
- The total cost of a cash advance grows daily, so the longer you carry the balance, the more you pay in interest.
- Alternatives like personal loans, payday loans, or borrowing from friends cost less or have better terms in most situations.
How to withdraw cash at an ATM
To get cash from an ATM using your credit card, you need a PIN (personal identification number). If you do not have one, contact your card issuer — you can usually set it up by phone, through their mobile app, or online. Once you have a PIN, go to any ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover).
Insert your card, enter your PIN, select "Withdraw Cash" or "Cash Advance," and choose the amount. The ATM will dispense the cash and charge your credit card account when ready. The transaction appears on your statement as a cash advance, not a purchase, which triggers the higher interest rate and fees.
What fees and interest rates explore
The cost of a cash advance has three parts. First is the cash advance fee, charged upfront as a percentage of the amount withdrawn — typically 3% to 5%. Second is the higher APR, which applies only to the cash advance balance and is usually 2% to 3% points above your purchase APR. Third is the fact that interest accrues from day one with no grace period, unlike purchases where you might have 21 to 25 days before interest kicks in.
Example: A $500 cash advance at a 4% fee costs $20 upfront. If your cash advance APR is 24% and you pay it back over three months, you will pay roughly $30 in interest. Total cost: $50, or 10% of the amount borrowed. A personal loan for the same amount and term would cost far less.
Alternatives that cost less
A personal loan from a bank or credit union typically charges 6% to 36% APR depending on your credit, with no upfront fee and a fixed repayment schedule. For a $500 loan over 12 months at 18% APR, you would pay roughly $50 in interest — the same as a three-month cash advance, but spread over a full year with predictable monthly payments.
A balance transfer to a 0% APR card (if you have good credit) lets you move money interest-free for 6 to 21 months, though you pay a 3% to 5% transfer fee upfront. This works if you need time to repay and have access to another card.
Borrowing from family or friends costs nothing if they agree, though it risks the relationship. A payday loan is expensive — typically $15 to $20 per $100 borrowed — but costs less than a cash advance if you repay within two weeks. However, payday loans often trap borrowers in a cycle of rolling debt.
If you have a 401(k) or similar retirement account, some plans allow loans against your balance at a low interest rate, though you risk penalties if you leave your job before repaying.
How cash advances affect your credit score
A cash advance does not hurt your credit score directly, but it increases your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 limit and withdraw $500 in cash, your utilization jumps to 10%. High utilization (above 30%) can lower your score by 10 to 50 points, depending on your current profile.
The bigger risk is that carrying a high cash advance balance for months will cost you in interest, making it harder to pay down and keeping your utilization high. This compounds the damage to your score over time.
When a cash advance might make sense
A cash advance is worth considering only in narrow situations: you need cash when ready, no ATM or debit card is available, and you can repay the full amount within days. Examples include an unexpected travel expense in a country where your debit card does not work, or a same-day emergency where cash is the only payment method accepted.
In almost every other situation — paying a bill, covering a shortfall, or funding a planned expense — a personal loan, balance transfer, or line of credit costs less and carries fewer risks. If you find yourself regularly needing cash advances, that is a sign your budget has a structural problem that borrowing will not fix.
Frequently Asked Questions
Can I get a cash advance if I have a low credit limit?
Yes. Your cash advance limit is usually the same as your credit limit, though some issuers set it lower. You can withdraw up to that limit at any ATM. The fee and interest rate explore regardless of your limit size.
What happens if I do not pay back a cash advance?
The balance stays on your credit card and accrues interest daily at the higher cash advance APR. If you miss payments, your credit score drops, late fees explore, and the issuer may increase your APR further or close your account. The debt can be reported to collection agencies.
Is there a difference between a cash advance and a balance transfer?
Yes. A cash advance withdraws money from your credit line as cash. A balance transfer moves debt from one card to another. Cash advances charge higher interest and accrue it when ready; balance transfers often offer 0% APR for a period but charge an upfront fee.
Can I use a credit card to withdraw cash from a bank teller?
Some banks allow this, but it is treated as a cash advance with the same fees and interest rate. You will need your PIN and the card itself. Call your bank first to confirm they offer this service.
How long does it take to set up a PIN for cash advances?
Most issuers set up a PIN when ready through their app or website, or by phone within minutes. Some may mail a PIN to you, which takes 5 to 10 business days. Check your card issuer's website or call the number on the back of your card to find out their process.