Getting cash from your credit card costs more than you think
You can withdraw cash from a credit card at an ATM using your PIN, but it is not the same as using the card to buy something. The bank charges you a cash advance fee — usually 3% to 5% of the amount you withdraw — right away. You also start paying interest when ready, with no grace period like you get on purchases. That interest rate is often higher than your regular purchase rate. A $500 cash advance can cost you $15 to $25 in fees alone, plus interest that starts accruing the same day.
Before you go to an ATM, understand what you are actually paying for and whether the money you need is worth that cost. Most people find other ways to get cash that do not carry these penalties.
Key Takeaways
- Cash advances charge a fee (usually 3% to 5%) plus a higher interest rate that starts when ready, with no grace period.
- You can withdraw cash at an ATM using your credit card PIN, but you need to know your PIN first — call the card issuer if you do not have one.
- Balance transfers to another card, personal loans, and borrowing from friends or family usually cost less than a cash advance.
- Some credit cards do not allow cash advances at all, and some ATMs charge their own fee on top of your card issuer's fee.
How to actually withdraw cash at an ATM
Insert your credit card into an ATM that accepts credit cards — not all do. Enter your PIN. Select "Withdraw Cash" or "Cash Advance." Choose your amount. The ATM will show you the fee before you confirm, so you can see the total cost before the transaction goes through.
If you do not have a PIN for your credit card, call the number on the back of your card and ask the issuer to send you one or set one up over the phone. Some issuers let you set a PIN online through your account. This can take a few days, so plan ahead if you need cash on a specific date.
Not every ATM accepts credit cards — many are set up for debit cards only. Gas station ATMs, bank ATMs, and ATMs in convenience stores are your best bet. Some ATMs will also charge you their own fee on top of your card issuer's fee, so you might pay $5 to $10 total just to withdraw $100.
What the fees and interest actually cost you
A $500 cash advance with a 4% fee costs $20 upfront. If your cash advance interest rate is 24% per year and you pay back the $500 in one month, you will owe about $10 in interest. That is $30 total for borrowing $500 for 30 days — roughly 7.2% of what you borrowed.
Compare that to a personal loan from a bank or credit union, which might charge 10% to 15% annual interest with no upfront fee. Or a payday loan, which is usually worse — often 400% annual interest or higher. A cash advance from your credit card is expensive, but it is not always the most expensive option available.
The real trap is carrying the balance. If you do not pay back that $500 the next month, the interest keeps compounding. After six months of minimum payments, you might owe $600 or more on that original $500 withdrawal.
Cheaper ways to get cash when you need it
If you have another credit card with a lower interest rate, a balance transfer might work. You transfer the cash advance to the other card, which may have a lower rate or even a promotional 0% rate for the first few months. You still pay a balance transfer fee (usually 3% to 5%), but you avoid the daily interest charges during the promotional period.
A personal loan from a bank, credit union, or online lender usually has a fixed interest rate and a set repayment schedule. Rates range from about 6% to 36% depending on your credit score and the lender. You know exactly what you will pay each month, and there is no surprise interest compounding.
Borrowing from family or friends costs nothing if they do not charge interest, but it can damage the relationship if you do not pay back on time. A written agreement about when you will repay helps both of you stay clear on expectations.
If you have a job, some employers offer paycheck advances or loans to employees. Ask your HR or payroll department whether this is an option. If you are a member of a credit union, ask about their short-term loan products — they often have lower rates than banks.
When your credit card will not let you take a cash advance
Some credit cards, especially rewards cards and cards for people rebuilding credit, do not allow cash advances at all. You will find this in the card's terms and conditions, or you can call the issuer and ask.
If your card does allow cash advances but you have reached your credit limit, you cannot withdraw cash beyond that limit. The cash advance counts against your total available credit, just like a purchase does.
If you have been reported to the card issuer for missed payments or fraud, they may temporarily block cash advances even if the card normally allows them. Call the issuer to ask whether your account has restrictions.
How a cash advance affects your credit score
Taking a cash advance does not hurt your credit score by itself. However, it does increase your credit utilization — the percentage of your available credit you are using. If you normally use 30% of your credit limit and you take a $500 cash advance on a $2,000 limit, your utilization jumps to 55%. High utilization can lower your score by a few points.
The real damage comes if you carry the balance and miss a payment. A missed payment stays on your credit report for seven years and can drop your score by 100 points or more. If you take a cash advance, plan to pay it back quickly so you do not end up in that situation.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another debt?
Technically yes, but it is usually a bad idea. You are borrowing at a high interest rate with an upfront fee to pay off another debt. You would be better off with a personal loan or a balance transfer to a card with a lower rate. The only exception is if the debt you are paying off has an even higher interest rate, like a payday loan.
What happens if I do not pay back a cash advance?
The interest keeps compounding, and the balance grows. If you miss a payment, the card issuer reports it to the credit bureaus, which damages your credit score. After 30 days late, they may charge you a late fee. After 180 days late, they may close the account and send it to a collection agency.
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 can call the issuer to ask what your cash advance limit is. Some ATMs also have daily withdrawal limits, so you might not be able to withdraw your full limit in one day.
Do I have to use an ATM, or can I get a cash advance another way?
You can also ask a bank teller for a cash advance over the counter, though fewer banks offer this now. Some credit card issuers let you transfer money to your bank account, though they may charge a fee for this too. Check your card's website or call the issuer to see what options are available.