You can withdraw cash from a credit card, but it costs more than a regular purchase and works differently than a debit card
A cash advance is a withdrawal of cash from your credit card account. Unlike a debit card, which pulls money from your bank account, a cash advance borrows against your credit limit. The moment you take the cash, you owe it back to the credit card company — and you start paying interest when ready, even if you normally get a grace period on purchases.
Most people use cash advances at ATMs, but you can also get cash over the counter at a bank or through a cash advance service. The process is straightforward, but the cost is not: cash advances typically charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases.
Key Takeaways
- Cash advances charge a fee (typically 3 to 5 percent) and a higher interest rate than purchases, with interest starting when ready.
- You can withdraw cash at an ATM using your credit card PIN, at a bank teller window, or through a cash advance service.
- Your credit card company sets a separate cash advance limit, which may be lower than your total credit limit.
- Interest on a cash advance accrues daily and is not covered by any purchase grace period your card offers.
- If you need cash regularly, a debit card or bank withdrawal is almost always cheaper than repeated cash advances.
Where and how to withdraw cash from your credit card
The most common method is an ATM withdrawal. Insert your credit card, enter your PIN (which you may need to set up first if you have never used it), and select the cash amount. The ATM will dispense the cash and charge it to your credit card account when ready.
You can also visit a bank branch and ask a teller for a cash advance. Bring your credit card and a form of ID. The teller will process the transaction and hand you cash. This method works even if the bank is not your own bank, though some banks charge an additional fee for this service.
A third option is a cash advance service or check-cashing store. These businesses advertise cash advances and will process the transaction for you, though they often charge their own fee on top of your credit card company's fee — making this the most expensive route.
Fees and interest rates for cash advances
Every cash advance comes with at least two costs. The first is an upfront fee, charged when you take the cash. This is usually a flat dollar amount or a percentage of the withdrawal (typically 3 to 5 percent), whichever is higher. A $300 cash advance with a 5 percent fee costs $15 when ready.
The second cost is interest. Cash advances carry a higher interest rate than regular purchases — often 2 to 5 percentage points higher. If your purchase APR is 18 percent, your cash advance APR might be 23 percent. Interest begins accruing the day you withdraw the cash, with no grace period. This means you pay interest even if you pay off the balance in full at the end of the month.
Interest compounds daily, so the longer you carry the balance, the more you owe. A $500 cash advance at 23 percent APR costs about $9.58 in interest after one month if you make no payments.
Your cash advance limit versus your credit limit
Your credit card company sets a separate cash advance limit, which is often lower than your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,500 or $2,000. This limit is set by the card issuer and is not something you can change on your own.
You can contact your credit card company to ask what your cash advance limit is. Some companies allow you to request an increase, though this is not may provide. Your limit may also increase over time as your account history with the card issuer improves.
If you try to withdraw more than your cash advance limit, the ATM or teller will decline the transaction. You cannot exceed this limit, even if you have available credit remaining on your card.
How cash advances affect your credit score
A cash advance itself does not directly damage your credit score, but it can indirectly harm it. The withdrawal increases your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 limit and take a $1,500 cash advance, your utilization jumps to 30 percent. High utilization can lower your credit score.
If you carry the cash advance balance and miss a payment, that missed payment will be reported to credit bureaus and will hurt your score. The high interest rate also makes it straightforward to fall behind, since the balance grows quickly if you only make minimum payments.
Paying off the cash advance quickly — ideally within one or two billing cycles — minimizes the damage to your score and keeps interest costs low.
When a cash advance makes sense (and when it does not)
A cash advance is rarely the cheapest way to get cash, but there are situations where it may be your only option. If you need cash for an emergency and have no other way to get it, a cash advance is faster than a personal loan. If you have a 0 percent APR promotional period on your card, a cash advance during that period costs only the upfront fee, which may be acceptable.
In most other situations, alternatives are cheaper. A bank withdrawal from your checking account costs nothing. A personal loan from a bank or credit union typically charges lower interest than a cash advance. A payday loan, while also expensive, may cost less than a cash advance if you repay it within two weeks. Even a cash advance from a different credit card with a lower rate or lower fee may be better than your primary card.
If you find yourself taking cash advances regularly, that is a sign your budget does not match your income. In that case, the real solution is to address the underlying spending or income problem, not to keep borrowing at high rates.
How to repay a cash advance
A cash advance appears on your credit card statement as a separate line item from your regular purchases. When you make a payment to your credit card, the payment is typically applied to your lowest-interest debt first — usually your regular purchases — and your cash advance last. This means your cash advance balance may sit and accrue interest even while you are making payments.
To pay off a cash advance faster, contact your credit card company and ask if you can make a payment directed specifically to the cash advance balance. Some companies allow this; others do not. If your company does not, the fastest way to eliminate the cash advance is to pay more than your minimum payment so that money flows to the higher-interest balance.
Once the cash advance is paid off, the fee is gone and interest stops accruing. There is no penalty for paying it off early.
Frequently Asked Questions
Can I use a credit card to withdraw cash at any ATM?
Most ATMs accept credit cards for cash advances, but not all. ATMs in banks, convenience stores, and casinos typically accept them. Some ATMs may decline your card if it is not set up for cash advances or if you have not set a PIN. Call your credit card company to confirm your card is enabled for ATM withdrawals.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a fee plus high interest. A balance transfer moves debt from one card to another and typically has a lower fee but still charges interest. Neither is free, but a balance transfer is usually cheaper if you are moving existing debt.
Do I have to set a PIN to use my credit card at an ATM?
Yes. If you have never used your credit card for a cash advance, you will need to set a PIN first. You can usually do this online through your card issuer's website, by calling their customer service number, or at an ATM by selecting the option to set a PIN.
Will a cash advance show up on my credit report?
The cash advance itself does not appear on your credit report, but the balance does. If you carry it for multiple months, it increases your credit utilization and may lower your score. Missed payments on a cash advance will be reported and will damage your score.
Can I take a cash advance if I am already near my credit limit?
Only if your cash advance limit allows it. Your cash advance limit is separate from your overall credit limit. If you have $500 in available credit but your cash advance limit is $1,000, you can still take a $500 cash advance — it will max out your available credit but not exceed your cash advance limit.