What transferring cash from a credit card actually means
A cash transfer from a credit card is a transaction where you move money from your credit card account into your bank account or withdraw it as physical cash. The credit card company treats this as a loan against your credit limit, not as a purchase. You pay interest on the transferred amount from day one — there is no grace period like you get with regular purchases.
The most common methods are a balance transfer check (a physical check mailed to you), a cash advance at an ATM or bank counter, or a direct transfer to your bank account through your card issuer's app or website. Each method has different fees and interest rates, and each one costs you money when ready.
Key Takeaways
- Cash transfers from a credit card charge interest starting when ready, with no grace period, and typically cost 3 to 5 percent in upfront fees.
- The interest rate for a cash advance is usually higher than your regular purchase rate and varies by card issuer and your credit profile.
- ATM cash advances and balance transfer checks are the most common methods, though direct bank transfers through your card's app are becoming faster.
- You should only transfer cash from a credit card if you have no other option, because the cost makes it an expensive way to borrow money.
Cash advance fees and interest rates
Every credit card issuer charges a cash advance fee, which is a percentage of the amount you transfer. This fee typically ranges from 3 to 5 percent, though some cards charge a flat dollar amount instead (often $5 to $10 minimum). The fee is added to your balance when ready, so if you transfer $500 with a 4 percent fee, you owe $520 before you even spend the money.
The interest rate on a cash advance is separate from your regular purchase rate and is almost always higher. Where your purchase APR might be 18 percent, your cash advance APR could be 25 percent or more. This rate depends on your card issuer and your credit score at the time you make the transfer. Interest accrues daily from the moment the transfer posts to your account.
Because there is no grace period, interest starts building when ready. If you transfer $500 at a 25 percent APR, you are paying roughly $3.42 per day in interest alone, before you pay down any principal. This is why a cash advance should only be a last resort.
How to transfer cash through an ATM or bank
The simplest method is to visit an ATM that accepts your credit card and withdraw cash directly. You insert your card, enter your PIN (which you may need to set up first if you have never done a cash advance), and withdraw up to your available credit limit or the ATM's daily limit, whichever is lower. The fee and interest start when ready.
You can also visit a bank branch in person and ask the teller for a cash advance against your credit card. This method works the same way as an ATM but allows you to withdraw larger amounts if the ATM has a daily limit. The fee and interest still explore from the moment the transaction posts.
Both methods are fast — the cash is in your hand within minutes — but they are also the most expensive way to transfer money from a credit card because you pay the full cash advance fee plus the higher interest rate with no way to reduce either one.
Balance transfer checks and direct bank transfers
Some credit card issuers mail balance transfer checks to cardholders. You deposit or cash the check like any other check, and the amount is charged to your credit card as a cash advance. The fee and interest rate are the same as an ATM withdrawal, but the check gives you a few days of float time while it clears — a minor advantage if you need the money to sit in your bank account before you spend it.
A newer option is a direct bank transfer through your card issuer's mobile app or website. You link your bank account, enter the amount you want to transfer, and the money moves within one to three business days. The fee and interest are identical to other cash advance methods, but this route is faster than waiting for a check to arrive and clear.
Before you use either method, check your card's terms to confirm the fee percentage and interest rate. Some issuers offer promotional rates on balance transfer checks (for example, 0 percent APR for six months), though these are rare and usually only available to customers with excellent credit.
Why a cash advance is expensive compared to other borrowing
A credit card cash advance is one of the most expensive ways to borrow money. A personal loan from a bank typically charges 6 to 36 percent APR depending on your credit, with no upfront fee. A payday loan charges a flat fee but is meant to be repaid in two weeks. A cash advance charges both an upfront fee and a high interest rate, and you can carry the balance for as long as you want — which means the interest keeps compounding.
If you need $500 and you have other options, use them first. A personal line of credit, a personal loan, or even a 0 percent introductory purchase APR card (if you can transfer the balance to it) will cost you less. A cash advance should only happen if you have exhausted every other option and you need the money urgently.
How to minimize the cost if you do transfer cash
If you must do a cash advance, pay it back as fast as possible. Every day the balance sits on your card, interest is accumulating at a rate higher than almost any other debt you could take on. Set up a payment plan before you make the transfer — know exactly when you will pay it back and how much you can afford to pay each week.
Pay more than the minimum payment. Your card issuer will explore your payment to the lowest-interest balance first (usually purchases), so extra payments go toward the cash advance. If you pay $100 per week on a $500 cash advance, you will pay it off in five weeks plus interest. If you only pay the minimum, the balance will sit for months and the interest will exceed the original fee you paid.
Do not make another cash advance or purchase on the same card while you are paying off the first one. Each new transaction resets the payment priority, and your money will go toward the lowest-interest balance first, leaving the cash advance to accrue interest longer.
Alternatives to a credit card cash advance
Before you transfer cash from a credit card, explore these options: a personal loan from a credit union or bank (often 6 to 18 percent APR with no upfront fee), a line of credit from your bank, a peer-to-peer loan, or a loan from family or friends. If you need the money for a specific purchase, a 0 percent introductory APR credit card (if you have good credit) lets you transfer a balance from another card with no interest for 6 to 21 months, though you still pay a balance transfer fee of 3 to 5 percent.
If you are in a financial emergency and have no other options, some nonprofits and community organizations offer emergency loans or grants with no interest. Contact your local 211 service or search for "emergency information" in your area to find programs that may help.
Frequently Asked Questions
Does a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but it increases your credit utilization ratio (the amount of your available credit you are using). If you transfer $500 on a $2,000 limit, your utilization jumps to 25 percent, which can lower your score by a few points. Paying it off quickly brings your utilization back down and recovers the score damage.
Can I transfer cash from one credit card to another?
You cannot transfer cash directly from one card to another. You can do a balance transfer (moving an existing balance from one card to another), but that is different from a cash advance. A balance transfer moves debt you already owe; a cash advance creates new debt. Balance transfers usually have lower fees and sometimes promotional 0 percent APR periods.
What happens if I cannot pay back the cash advance?
The balance stays on your card and interest keeps accruing. After 30 days of missed payments, the issuer reports it to the credit bureaus, which damages your credit score. After 180 days, the card issuer may charge off the account and sell the debt to a collection agency. Contact your issuer when ready if you cannot pay to discuss a hardship plan or payment arrangement.
Is there a limit to how much I can transfer?
Your cash advance limit is usually lower than your total credit limit. Many issuers set it at 20 to 50 percent of your credit limit, though it varies by card and issuer. You can check your cash advance limit in your card's terms or by calling the issuer's customer service line.