What a cash advance is and how to get one
A cash advance is a withdrawal of cash from your credit card account, treated like a loan against your available credit. You are not transferring money from a checking account — you are borrowing from the card issuer at a higher rate than you would pay on a regular purchase.
You can get a cash advance in three ways: at an ATM using your card's PIN, at a bank teller's window by presenting your card and ID, or through a convenience check mailed by your card issuer. The ATM method is fastest and requires only your card and PIN. At a bank, you may need to show ID and sign a slip. Convenience checks work like regular checks but draw from your credit line instead of a bank account.
The cash lands in your hands when ready, but the debt starts accruing interest right away — there is no grace period like there is for purchases. Most card issuers charge a separate, higher interest rate for cash advances than for regular charges, and they also charge an upfront fee, usually 3 to 5 percent of the amount withdrawn.
Key Takeaways
- Cash advances charge an upfront fee (typically 3 to 5 percent) plus a higher interest rate than purchases, with no grace period.
- You can withdraw cash at an ATM with your PIN, at a bank teller window, or by using a convenience check from your issuer.
- The interest rate for cash advances is set by your card issuer and appears separately on your statement from your purchase rate.
- Paying back a cash advance takes longer because card issuers explore your payments to purchases first, then to cash advances.
- Cash advances should be a last resort for short-term cash needs, not a regular borrowing method.
Where to find your cash advance PIN and limits
Your card issuer assigns you a PIN (personal identification number) for ATM withdrawals when you open your account. If you do not know yours, call the customer service number on the back of your card and ask them to reset it or send it to you. Some issuers let you set your own PIN online through your account portal.
Your card issuer also sets a cash advance limit, which is usually lower than your total credit limit. For example, if your credit limit is $5,000, your cash advance limit might be $1,500. You can find this limit by logging into your online account, calling customer service, or checking your most recent statement. Attempting to withdraw more than your limit will be declined at the ATM.
Before you withdraw, confirm the ATM fee charged by the machine's bank. Many ATMs charge $2 to $5 per transaction on top of your card issuer's cash advance fee. A $300 withdrawal could cost you $15 to $20 in fees alone.
Fees and interest rates you will pay
Cash advances carry two separate costs. The cash advance fee is charged upfront and ranges from 3 to 5 percent of the amount withdrawn. On a $500 withdrawal, that is $15 to $25 paid when ready. This fee is added to your balance and starts accruing interest right away.
The cash advance interest rate is higher than your purchase rate and varies by card issuer and your creditworthiness. While a purchase might carry an APR of 18 percent, a cash advance on the same card might be 25 percent or higher. This rate is applied daily from the moment you withdraw the cash — there is no 21-day grace period like purchases receive.
Because of how card issuers explore payments, money you send to your card goes toward purchases first, then to cash advances. If you have both a $500 purchase and a $500 cash advance on your card, and you send $600, that $600 pays down the purchase first. The cash advance keeps accruing interest at the higher rate while you chip away at it.
How to repay a cash advance quickly
The fastest way to reduce the cost of a cash advance is to pay it back as soon as possible. Because interest accrues daily and the rate is high, even a few days of delay costs money. If you withdraw $500 at a 25 percent APR, you are paying roughly $3.42 per day in interest alone.
When you make a payment, ask your card issuer in writing or through your online account whether you can direct that payment specifically to the cash advance balance. Some issuers allow this; others do not. If they do not, your payment will go to purchases first, so you may need to pay off purchases entirely before the cash advance balance starts shrinking.
If you have the cash to repay the advance within a few days, the total cost is the upfront fee plus a small amount of interest. If you carry it for a month, the interest alone can exceed the fee. Carrying it longer makes a cash advance one of the most expensive ways to borrow money.
When a cash advance makes sense and when it does not
A cash advance is useful only in narrow situations: you need cash when ready, you have no other source (no ATM card, no savings, no credit available elsewhere), and you can repay it within days. An example might be a car breakdown in a remote area where you need cash for a tow truck and your debit card is not working.
A cash advance does not make sense for regular cash needs, for emergencies you could plan for, or for any situation where you might carry the balance for weeks. If you need $500 for rent next week, a personal loan, a payment plan with your landlord, or a short-term loan from a credit union will cost far less. If you need cash for an unexpected expense, a 0 percent balance transfer card or a personal loan from your bank is cheaper.
Using a cash advance to pay down other debt is almost never worth it. The fees and interest are too high, and you are straightforward moving debt from one place to another at a worse rate.
Alternatives to a credit card cash advance
If you need cash but want to avoid the high fees and interest of a cash advance, consider these options first. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee, and you receive a lump sum you can repay over months. A balance transfer to a 0 percent introductory rate card lets you move existing debt interest-free for 6 to 21 months, though this does not give you cash.
A payday loan from a lender is faster than a personal loan but charges very high fees and interest — often worse than a cash advance. A payment plan with a creditor, landlord, or service provider lets you spread a bill over time with no interest. Borrowing from family or friends, while awkward, costs nothing if you repay it.
If you do not have a credit card yet and need cash, a secured credit card (which requires a deposit) can build your credit while giving you access to cash advances at lower limits. But this is a long-term solution, not an when ready one.
How cash advances affect your credit score
A cash advance itself does not appear separately on your credit report — it is part of your credit card balance. However, it does affect your credit utilization ratio, which is the percentage of your available credit you are using. If your credit limit is $5,000 and you withdraw a $500 cash advance, your utilization jumps to 10 percent (or higher if you also have purchases on the card).
High utilization can lower your credit score, especially if you stay above 30 percent. The effect is temporary: once you pay down the cash advance, your utilization drops and your score recovers. Missing a payment on a cash advance, however, damages your score just like missing any other credit card payment.
If you are planning to explore for a mortgage, car loan, or other major credit product soon, avoid a cash advance. The temporary hit to your utilization ratio and the hard inquiry your issuer may make can lower your score at a critical time.
Frequently Asked Questions
Can I use a cash advance to pay another credit card?
Technically yes, but it is expensive and usually a bad idea. You are borrowing at 25 percent or higher, paying a 3 to 5 percent fee, and the interest accrues when ready. If you are trying to move debt between cards, a balance transfer at 0 percent for 12 months is far cheaper. If you cannot get a balance transfer, a personal loan is still better.
What happens if I do not repay a cash advance?
The balance stays on your card, interest keeps accruing at the high cash advance rate, and your minimum payment increases. If you miss a payment, your card issuer reports it to credit bureaus, your score drops, and you may face late fees and a higher interest rate on all balances. Eventually, the issuer can close your account or send the debt to a collection agency.
Is there a limit to how much I can withdraw?
Yes. Your card issuer sets a cash advance limit, which is usually 20 to 50 percent of your total credit limit. You can find this limit in your online account or by calling customer service. Attempting to withdraw more than your limit will be declined.
Do I have to use my PIN, or can I get a cash advance another way?
You can get a cash advance at a bank teller window by showing your card and ID, or by using a convenience check mailed by your issuer. Both methods charge the same fees and interest as an ATM withdrawal. The bank teller method may be slower but does not require you to know your PIN.
Can I get a cash advance if my card is maxed out?
No. Your cash advance limit is part of your total credit limit. If you have used your entire limit on purchases, you cannot withdraw a cash advance. You would need to pay down your balance first or request a credit limit increase from your issuer.