A cash advance fee is a charge your credit card issuer adds when you withdraw cash using your card
When you use your credit card at an ATM or ask a bank teller for cash, the issuer treats it differently from a regular purchase. Instead of just charging interest on what you owe, they add an upfront fee — usually a percentage of the amount you withdraw, a flat dollar amount, or whichever is higher. This fee appears on your statement as a separate line item.
The fee is separate from interest. You start paying interest on the cash advance when ready, often at a higher rate than your regular purchase APR, and there is usually no grace period. This means the cost of borrowing cash this way is significantly higher than swiping your card for a purchase.
Key Takeaways
- Cash advance fees typically range from 3% to 5% of the amount withdrawn, with a minimum flat fee of $2 to $10.
- Interest on cash advances starts accruing right away, with no grace period like you get on purchases.
- The interest rate for cash advances is usually 2% to 5% higher than your regular purchase APR.
- You can find your card's cash advance fee and APR in your cardholder agreement or by calling the number on the back of your card.
- Alternatives like debit card withdrawals, personal loans, or payday loans may cost less depending on your situation.
How the fee is calculated and what it costs you
Most issuers charge either a percentage of the withdrawal or a flat fee, whichever is larger. A typical card might charge 3% with a $5 minimum. If you withdraw $100, you pay $5 (the minimum). If you withdraw $500, you pay $15 (3% of $500). If you withdraw $1,000, you pay $30 (3% of $1,000).
Some cards charge a flat fee only — say $10 per withdrawal — regardless of amount. Others use a higher percentage, up to 5%. Check your cardholder agreement or call the number on your card to find out which structure yours uses.
The fee hits your account when ready, but the real cost compounds when you add the interest. Because there is no grace period, interest starts accruing the day you withdraw the cash. If your cash advance APR is 24% and you withdraw $500 with a $15 fee, you owe $515 right away, plus interest that begins accumulating at once.
Why cash advance APR is higher than purchase APR
Credit card issuers charge a higher interest rate for cash advances because they see it as riskier lending. When you buy something with your card, the merchant guarantees the transaction and you have some consumer protections. When you withdraw cash, the issuer has no such may provide — you could spend it on anything, and they have no way to recover it if you default.
Your purchase APR might be 18%, but your cash advance APR could be 24% or higher. Some cards don't disclose the cash advance APR separately in marketing materials, so you have to read the fine print or call to find out. The difference matters: on a $500 cash advance, that extra 6% in APR costs you roughly $30 more per year if you carry the balance.
Where you can take a cash advance
You can withdraw cash at any ATM that displays your card's network logo (Visa, Mastercard, American Express, Discover). You can also visit a bank branch — yours or any other bank — and ask a teller for a cash advance. Some convenience stores and grocery stores offer cash back when you make a purchase, but that is a debit card feature, not a credit card cash advance.
ATMs outside your issuer's network often charge an additional ATM fee on top of the cash advance fee. Your bank might charge $2 to $3, and the ATM owner might charge another $2 to $3. So a $200 withdrawal could cost you $10 to $15 in fees before interest even starts.
When a cash advance might make sense
A cash advance is rarely the cheapest way to get cash, but there are narrow situations where it might be your only option. If you need cash urgently and have no other way to get it, a cash advance is faster than a personal loan or payday loan, which take days to process.
If you have a 0% introductory APR on your card and that rate applies to cash advances (most do not), a cash advance during that period costs only the upfront fee, with no interest. Read your offer carefully — most 0% promos exclude cash advances.
If you have a rewards card that earns cash back on all purchases, you might think a cash advance is "free" because you earned points on the withdrawal. It is not. The fee and interest are real costs that far outweigh any points you earned.
Alternatives that may cost less
A debit card withdrawal from your own bank account costs nothing and is when ready. If you have a debit card linked to a checking account, this is always cheaper than a credit card cash advance.
A personal loan from a bank, credit union, or online lender typically has a lower APR than a credit card cash advance APR, though it takes 1 to 5 business days to fund. If you need cash but not when ready, a personal loan is usually cheaper over time.
A payday loan or title loan is expensive and should be a last resort, but if you are comparing it to a credit card cash advance, calculate both costs first. Some payday loans are cheaper for very short-term borrowing (a few weeks), while others are far worse.
Asking friends or family for a loan, negotiating a payment plan with a creditor, or selling something you own are all free or low-cost alternatives if the situation allows.
How to find your card's cash advance terms
Your cardholder agreement lists the cash advance fee, the cash advance APR, and any daily or monthly limits on how much you can withdraw. You can find this document online in your card issuer's website under "Account" or "Documents," or request a copy by calling the number on the back of your card.
The agreement usually shows the fee as a percentage and a minimum flat amount — for example, "3% of the amount withdrawn, minimum $5." It will also state the cash advance APR separately from your purchase APR. If the agreement is unclear, ask the customer service representative to read it to you over the phone.
Some issuers also set a daily limit on cash advances — say, $500 per day — or a monthly limit. These limits are separate from your credit limit. Knowing your limit matters if you need a large amount of cash.
Frequently Asked Questions
Does a cash advance count toward my credit limit?
Yes. A $500 cash advance reduces your available credit by $500, just like a $500 purchase does. The cash advance fee also counts toward your limit. If your limit is $2,000 and you withdraw $500, you have $1,500 left to use.
Can I pay off a cash advance faster to reduce interest?
Yes. Interest accrues daily on a cash advance, so paying it off sooner costs less. However, credit card issuers typically explore your payments to the lowest-interest debt first (usually purchases), so a cash advance balance may sit and accrue interest while you pay down purchases. Ask your issuer how to direct a payment specifically to the cash advance.
What if I don't have enough money to pay back the cash advance?
The balance rolls over to the next month and interest continues to accrue. The longer you carry it, the more you owe. If you miss a payment, it may be reported to credit bureaus and damage your credit score. Contact your issuer to discuss a payment plan if you are struggling.
Is there a difference between a cash advance and a balance transfer?
Yes. A balance transfer moves debt from one card to another and usually has a lower fee (1% to 3%) and may have a promotional 0% APR period. A cash advance withdraws cash and has a higher fee (3% to 5%) and higher APR with no grace period. Balance transfers are for moving existing debt; cash advances are for getting cash.
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is expensive. You pay the cash advance fee, the higher APR, and no grace period. You are essentially borrowing at a high rate to pay off debt at a lower rate, which costs you money. It is better to make a regular payment from your bank account or set up a payment plan with your issuer.