The main ways to withdraw cash from a credit card
You can take money out of a credit card in three ways: a cash advance at an ATM, a balance transfer to your bank account, or a cash-like transaction such as buying a money order or casino chips. Each method charges different fees and interest rates, and each affects your credit differently. A cash advance is the most direct but also the most expensive — you pay an upfront fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, often 20 to 30 percent, and interest starts accruing when ready with no grace period.
A balance transfer moves money from your credit card to your bank account through a third-party service or directly through some card issuers. This typically costs 3 to 5 percent as well, but the interest rate may be lower than a cash advance, and some cards offer a promotional period with no interest. A cash-like transaction — such as purchasing a money order, wire transfer, or casino chips — is treated as a cash advance by your card issuer, so it carries the same fees and interest rates as an ATM withdrawal.
Key Takeaways
- A cash advance at an ATM charges an upfront fee of 3 to 5 percent plus a higher interest rate than purchases, with interest starting when ready.
- Balance transfers move credit card money to your bank account and may offer lower interest rates or promotional periods, but still charge an upfront fee.
- Cash-like transactions such as money orders and wire transfers are treated as cash advances and carry the same fees and interest rates.
- Interest on cash advances and cash-like transactions begins the day you withdraw the money, with no grace period like you have on purchases.
- Withdrawing cash from a credit card increases your credit utilization ratio and can lower your credit score if the balance is not paid down quickly.
How a cash advance works at an ATM
To withdraw cash at an ATM, insert your credit card and enter your PIN. If you do not have a PIN, contact your card issuer to set one up before you visit the ATM. The machine will show your available cash advance limit, which is usually lower than your overall credit limit — often 20 to 50 percent of your total limit. You can withdraw up to that amount, but the ATM will charge a fee (typically $3 to $5 per transaction) in addition to your card issuer's fee.
Your card issuer charges a separate cash advance fee, usually 3 to 5 percent of the amount withdrawn. So if you withdraw $500, you might pay $15 to $25 in fees alone before interest kicks in. The interest rate on cash advances is higher than on purchases — often 20 to 30 percent APR — and it begins accruing the moment you withdraw the money. Unlike purchases, there is no grace period, so interest starts building when ready even if you pay your bill on time.
Balance transfers as an alternative to cash advances
A balance transfer moves money from your credit card to your bank account, usually through a third-party service or directly through your card issuer if they offer the feature. You initiate the transfer through your card issuer's website or app, provide your bank account details, and the money typically arrives within 1 to 3 business days. The card issuer charges a balance transfer fee, usually 3 to 5 percent, which is added to your credit card balance.
The advantage of a balance transfer is that some card issuers offer a promotional interest rate — sometimes 0 percent for 6 to 12 months — whereas a cash advance has no such option. After the promotional period ends, the interest rate reverts to the card's standard rate. Balance transfers still count as a cash-like transaction, so they do not have a grace period, but the lower promotional rate can save you money if you pay down the balance before the offer expires.
Cash-like transactions and why they cost more
Certain purchases are treated as cash advances by your card issuer, even though you are not withdrawing physical cash. These include money orders, wire transfers, casino chips, lottery tickets, and some cryptocurrency purchases. When you use your credit card for any of these transactions, your issuer charges a cash advance fee (3 to 5 percent) and applies the cash advance interest rate (20 to 30 percent APR) instead of the purchase rate.
These transactions are flagged as cash-like because they are considered a way to convert credit into cash or cash equivalents. Your card issuer treats them the same as an ATM withdrawal for fee and interest purposes. If you need cash, an ATM withdrawal or balance transfer is usually more transparent about the cost, whereas a cash-like transaction can surprise you with fees if you do not check your card's terms first.
How cash advances affect your credit score
Taking a cash advance increases your credit utilization ratio — the percentage of your available credit that you are using. If your credit limit is $5,000 and you withdraw $1,000 in cash, your utilization jumps to 20 percent. Credit scoring models weight utilization heavily, so a sudden increase can lower your score by 10 to 50 points depending on your overall credit profile. The impact is temporary if you pay down the balance quickly, but it lingers as long as the balance remains high.
A cash advance also appears on your credit report as a separate transaction type, which some lenders view differently than a regular purchase. If you are planning to explore for a mortgage, auto loan, or other credit in the near future, a recent cash advance can signal financial stress and may affect your approval odds or interest rate. Paying down the cash advance balance as quickly as possible minimizes this damage.
Fees and interest rates compared
| Method | Upfront Fee | Interest Rate | Grace Period | Time to Receive Funds |
|---|---|---|---|---|
| ATM cash advance | 3–5% + ATM fee ($3–$5) | 20–30% APR | None | when ready |
| Balance transfer | 3–5% | 0% (promotional) or 20–30% (standard) | None | 1–3 business days |
| Money order or wire | 3–5% | 20–30% APR | None | Varies by service |
| Personal loan (alternative) | 0–10% | 6–36% APR | Varies | 1–5 business days |
When a personal loan or other option makes more sense
If you need cash regularly or in large amounts, a personal loan from a bank or credit union is often cheaper than a credit card cash advance. Personal loans have fixed interest rates (usually 6 to 36 percent depending on your credit) and no upfront cash advance fee. The interest rate is lower than a cash advance rate, and you have a set repayment schedule, which makes budgeting easier. A personal loan also does not spike your credit utilization the way a cash advance does, because it is a separate account.
A credit card with a 0 percent promotional balance transfer offer is worth considering if you need cash for a short-term expense and can pay it back within the promotional window. A line of credit from your bank, if you have one, may also offer lower rates than a cash advance. Before you withdraw cash from your credit card, compare the total cost — upfront fees plus interest over the time you expect to carry the balance — against a personal loan or other borrowing option.
Frequently Asked Questions
Can I use my credit card to withdraw cash from any ATM?
Most ATMs accept credit cards for cash advances, but not all. Your card issuer may restrict which ATMs you can use or charge higher fees at out-of-network machines. Check your card's terms or call your issuer to find out which ATMs are fee-free. Some card issuers reimburse out-of-network ATM fees if you use their preferred ATMs, so it is worth asking.
What happens if I do not pay back a cash advance?
Interest accrues daily at the cash advance rate (20 to 30 percent APR) until you pay it off. If you miss payments, late fees explore and your credit score drops. The debt can be reported to credit bureaus and may lead to collection action if it remains unpaid for 180 days or more. Paying at least the minimum payment each month stops late fees, but does not stop interest from building.
Is a balance transfer better than a cash advance?
A balance transfer is usually better if your card issuer offers a promotional interest rate, because you can avoid interest for several months. Both charge an upfront fee, but the balance transfer rate is often lower after the promotional period. A cash advance has no promotional option, so the interest rate is high from day one. If you need cash when ready and your card does not offer balance transfers, a cash advance is your only credit card option.
Does a cash advance hurt my credit score when ready?
Yes, a cash advance can lower your score within days because it increases your credit utilization ratio. The impact is usually 10 to 50 points depending on how much you withdraw and your overall credit profile. The score recovers as you pay down the balance, but it takes time. If you are planning to explore for credit soon, avoid a cash advance if possible.
Can I get a cash advance on a debit card?
No, debit cards do not offer cash advances. You can withdraw money from a debit card at an ATM up to your account balance, but that is a withdrawal from your own funds, not a loan. If you need to borrow money, you need a credit card or a personal loan.