Yes, you can get a cash advance on most credit cards, but it costs significantly more than a regular purchase
A cash advance is money you borrow against your credit card's available balance. You walk into an ATM or bank, hand over your card, and withdraw cash. The card issuer treats this as a loan, not a purchase, which means different fees and interest rates apply immediately.
The catch: cash advances start charging interest the moment you withdraw the money — there is no grace period like there is for purchases. You also pay an upfront fee, usually 3% to 5% of the amount withdrawn. If you need $500, you might pay $15 to $25 just to get it, plus interest starting that day.
Most major card issuers allow cash advances through ATMs, bank tellers, or convenience checks. Your card's terms document lists the cash advance limit, which is often lower than your overall credit limit. Some cards set it at 20% to 50% of your total limit.
Key Takeaways
- Cash advances charge an upfront fee (typically 3% to 5%) and start accruing interest immediately, with no grace period.
- The interest rate on a cash advance is usually higher than the rate on purchases — sometimes 2% to 5% higher — and varies by card and issuer.
- Your cash advance limit is separate from your purchase limit and is often much smaller.
- Payments toward a cash advance are applied after purchase balances are paid down, so interest compounds longer.
- Alternatives like personal loans, payday loans, or borrowing from friends cost less or have clearer terms in most situations.
The fees and interest rates that make cash advances expensive
When you take a cash advance, you pay two costs upfront: the cash advance fee and the interest that starts accruing immediately. The fee is a percentage of the amount withdrawn — check your card's terms or call the issuer to find the exact percentage. This fee appears on your next statement as a separate charge.
The interest rate on a cash advance is almost always higher than your purchase APR. If your card charges 18% APR on purchases, the cash advance rate might be 23% or 25%. This rate is set by the issuer and does not change based on how long you keep the cash. Interest is calculated daily and compounds, meaning you pay interest on the interest.
Because there is no grace period, interest starts the day you withdraw the money. If you take out $500 at a 24% APR with a 4% fee, you pay $20 upfront and roughly $10 in interest in the first month alone — before you have even spent the cash.
How payments are applied when you have both purchases and cash advances
If you carry a balance on both purchases and a cash advance, your payment goes toward the purchase balance first. This is called the payment hierarchy, and it is set by federal law. Your cash advance sits unpaid while interest compounds on it.
This matters because it means your cash advance interest keeps growing even while you are making payments. If you owe $1,000 in purchases and $500 in a cash advance, and you pay $300, that $300 reduces the purchase balance to $700. The cash advance stays at $500, still accruing interest at the higher rate.
To pay down a cash advance faster, you need to pay more than the minimum or make a payment that exceeds your purchase balance. Some cardholders do not realize this and end up carrying the cash advance for months.
Where you can get a cash advance and what you need
You can withdraw a cash advance at any ATM that displays your card network's logo (Visa, Mastercard, American Express, Discover). You can also visit a bank branch and ask a teller for a cash advance, or use a convenience check that came with your card.
All you need is your card and your PIN. If you do not have a PIN, you can set one up by calling the number on the back of your card or using the issuer's app. Some banks charge an additional ATM fee on top of the cash advance fee — this varies by bank and ATM location.
Your available cash advance limit is shown in your online account or on your statement. If you try to withdraw more than this limit, the ATM will decline the transaction. The limit resets as you pay down the balance, just like a purchase balance does.
Why a cash advance is usually more expensive than other borrowing options
A personal loan from a bank or credit union typically charges 6% to 36% APR with no upfront fee, depending on your credit score and the lender. You know the exact payment and payoff date from the start. A cash advance gives you neither — you pay more upfront and the interest rate is higher.
A payday loan is predatory and should be avoided, but it is worth noting that some payday lenders charge less total interest than a credit card cash advance if you repay within two weeks. Beyond that window, payday loans become far more expensive.
Borrowing from a friend or family member costs nothing if they do not charge interest, and you can negotiate a repayment plan that fits your situation. If that is not an option, a personal loan is almost always cheaper than a cash advance.
When a cash advance might make sense
A cash advance makes sense only in narrow situations: you need cash immediately, you have no other borrowing options, and you can pay it back within a few weeks. An example: your car breaks down and the mechanic only takes cash, you do not have savings, and you can pay back the advance from your next paycheck.
Even then, calculate the total cost. A $500 advance at 4% fee plus 24% APR costs $20 upfront plus roughly $10 in interest over one month. If you can borrow $500 from a friend or family member instead, or wait a few days for a personal loan, you save that $30.
Do not use a cash advance to pay off other debts, cover regular expenses, or fund a purchase you cannot afford. The interest and fees make it one of the most expensive ways to borrow money available to consumers.
How to avoid needing a cash advance
Build an emergency fund of $500 to $1,000 in a savings account. This covers most unexpected expenses without forcing you to borrow. Even $50 per paycheck adds up quickly.
If you do not have a credit card yet, look for one with a low APR and no annual fee. Use it for planned purchases you can pay off in full each month. This builds your credit score and gives you a borrowing option that does not rely on cash advances.
If you already carry a balance, focus on paying it down before you need to borrow more. The less you owe, the lower your interest charges, and the more breathing room you have for actual emergencies.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
Taking a cash advance itself does not hurt your score, but it increases your credit utilization — the percentage of your available credit you are using. High utilization can lower your score by a few points. Paying it back quickly brings your score back up.
Can I take a cash advance if I am maxed out on my credit card?
No. Your cash advance limit is separate from your purchase limit, but you cannot exceed your total credit limit. If you have used your entire limit on purchases, you cannot take a cash advance. You would need to pay down the purchase balance first.
What happens if I do not pay back a cash advance?
The balance stays on your card and interest keeps accruing at the higher cash advance rate. After 30 days of non-payment, the issuer reports it to the credit bureaus, which damages your credit score. After 180 days, the issuer may charge off the debt and sell it to a collection agency.
Is there a way to avoid the cash advance fee?
No. The fee is mandatory and appears on every cash advance, regardless of amount or how quickly you repay it. Some cards offer slightly lower fees than others, but all charge something. The only way to avoid the fee is to not take a cash advance.
Can I use a balance transfer instead of a cash advance?
A balance transfer moves debt from one card to another, usually at a lower rate for a promotional period. It does not give you cash. If you need actual money in hand, a balance transfer will not help. A personal loan or borrowing from someone you know are better alternatives.