A cash advance fee is a charge your credit card company takes when you use your card to withdraw cash instead of making a purchase
When you take cash out of an ATM using your credit card, or get cash back at a store checkout, the card issuer charges you a cash advance fee on top of interest. This fee is separate from the purchase APR you pay on regular transactions. Most cards charge either a flat dollar amount (typically $3 to $10) or a percentage of the amount withdrawn (typically 3% to 5%), whichever is higher.
The fee hits your account when ready. If you withdraw $200 and your card charges 5%, you owe $10 just for taking out the cash — before any interest accrues. That $10 is not waived if you pay the balance quickly. It is a one-time charge for the transaction itself.
Key Takeaways
- Cash advance fees are charged as either a flat amount or a percentage of the withdrawal, and you pay whichever is larger.
- Interest on cash advances usually starts accruing when ready, with no grace period like you get on purchases.
- The cash advance APR is often 5 to 10 percentage points higher than your regular purchase APR.
- Withdrawing $500 in cash can cost you $15 to $25 in fees alone, plus daily interest until you pay it back.
How the fee is calculated and what it costs in real dollars
Card issuers set their own fee structure, so the cost varies by card and by bank. A typical card might charge $5 flat or 3% of the amount withdrawn, whichever is more. On a $100 withdrawal, you pay $5. On a $500 withdrawal, you pay $15 (3% of $500). On a $200 withdrawal, you pay $5 (the flat fee is higher than 2%).
Some cards charge higher percentages — up to 5% — or higher flat fees. A few cards marketed to people with poor credit charge $10 flat or 5%, which means a $200 cash advance costs $10 and a $500 withdrawal costs $25. Check your card's terms document or call the customer service number on the back of your card to find your exact fee structure. The issuer is required to disclose it.
The fee appears on your statement as a separate line item. It is not part of the cash advance balance itself, though some issuers may roll it into what you owe.
Why cash advance interest is more expensive than purchase interest
Credit cards charge a higher APR on cash advances than on regular purchases. Your purchase APR might be 18%, but your cash advance APR could be 23% or 28%. The difference depends on your card and your creditworthiness, but cash advances almost always cost more.
More important: interest on a cash advance starts accruing the day you withdraw the money. With a purchase, you typically get a grace period — usually 21 to 25 days — before interest starts. With cash, there is no grace period. A $500 cash advance at 25% APR costs you about $3.42 per day in interest, starting when ready.
If you withdraw $500 on the first of the month and pay it back on the 15th, you owe the $15 fee (3%) plus roughly $51 in interest (15 days × $3.42). That is $66 total — a 13% cost for two weeks of borrowing.
When cash advances appear on your credit report
The cash advance itself does not show up as a separate line on your credit report. Your credit card balance does. If you withdraw $500 in cash and your card balance was $0, your balance is now $500 (plus the fee). That $500 counts toward your credit utilization — the percentage of your available credit you are using.
If your card has a $2,000 limit and you withdraw $500, your utilization jumps to 25%. High utilization can lower your credit score, even if you pay the balance in full the next month. The damage is temporary — your score rebounds once you pay down the balance — but it happens when ready.
Situations where a cash advance fee is unavoidable
Some people need cash and have no other option. If you have no debit card, no access to your bank account, or no ATM nearby, a credit card cash advance might be the only way to get money. In that case, the fee is a cost of the transaction, like any other.
The math is still worth doing. A $100 cash advance with a $5 fee and 25% APR costs you $5 upfront plus interest. If you pay it back in a week, you owe roughly $5.42 in interest, for a total of $10.42. If you can borrow $100 from a friend, get a paycheck advance from your employer, or use a different payment method, you save that $10.42. But if none of those options exist, the fee is the price of access.
How to avoid cash advance fees entirely
The simplest way to avoid the fee is to not take a cash advance. Use your debit card at an ATM instead. If you do not have a debit card, open a checking account at a bank or credit union — most offer them for free and include a debit card.
If you need cash and your bank account is empty, consider asking for a paycheck advance from your employer, borrowing from a friend or family member, or using a payment app like Venmo or PayPal to transfer money. All of these cost less than a credit card cash advance.
Some credit cards marketed to people with excellent credit offer no cash advance fee. These are rare and usually require a high credit score and income. If you have good credit and expect to need cash advances occasionally, you can search for cards that waive the fee — but most cards do not.
What to do if you have already paid a cash advance fee
If you took a cash advance and paid the fee, you cannot get it back. Fees are non-refundable. However, if you were charged a fee in error — for example, if you were charged twice for the same withdrawal — contact your card issuer's customer service and ask them to review the transaction. They can reverse a duplicate charge.
If you regularly need cash and your current card charges high fees, consider switching to a different card or bank. Some checking accounts offer fee-free ATM access nationwide, which is cheaper than a credit card cash advance if you need cash regularly.
Frequently Asked Questions
Does paying off a cash advance quickly make the fee go away?
No. The fee is charged the moment you withdraw the cash and cannot be waived or refunded. Paying the balance quickly does reduce the interest you owe, but the fee itself is permanent. A $200 cash advance with a $5 fee costs $5 whether you pay it back tomorrow or next month.
Can I use a balance transfer to move a cash advance to a lower APR?
No. Balance transfers explore only to purchases, not to cash advances. A cash advance balance stays at the cash advance APR. Some cards offer 0% balance transfer rates for a limited time, but these do not cover cash advances.
What is the difference between a cash advance and a purchase?
A purchase is when you use your card to buy something. A cash advance is when you withdraw cash. Purchases have a grace period before interest starts; cash advances do not. Purchases usually have a lower APR. Both count toward your credit utilization, but only cash advances charge a separate fee.
Will taking a cash advance hurt my credit score?
It can, temporarily. The cash advance increases your credit utilization, which can lower your score. The damage is usually small and goes away once you pay the balance down. However, if you miss a payment on the cash advance, that missed payment stays on your report for seven years.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Most cards set a cash advance limit that is lower than your credit limit — often 20% to 50% of your total limit. If your credit limit is $5,000, your cash advance limit might be $1,000. You can call your card issuer to ask what your limit is.