You can withdraw cash from a credit card, but it is not the same as using the card to buy something
A cash advance is a withdrawal of actual money from your credit card account. You get the cash in your hand (or in your bank account), and the amount you withdrew becomes a balance you owe on the card, just like a purchase does. The difference is that cash advances charge higher interest rates, start accruing interest immediately with no grace period, and often include an upfront fee.
You can get a cash advance at an ATM using your card's PIN, at a bank teller window, or through a cash advance check that comes with some credit card accounts. The process is straightforward, but the cost is not. Most people use cash advances only when they have no other option, because the fees and interest make them expensive compared to regular purchases or other ways to borrow money.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, with no grace period.
- Interest on a cash advance starts the day you withdraw it, not at the end of a billing cycle like a purchase does.
- You can withdraw cash at an ATM with your PIN, at a bank teller, or by depositing a cash advance check, depending on what your card issuer offers.
- The total cost of a cash advance depends on how much you withdraw, how long you carry the balance, and your card's cash advance APR and fee structure.
How to get cash from your credit card
The most common method is using an ATM. Insert your credit card and enter your PIN (the same one you use for a debit card, or one you set up with your card issuer). The ATM will show you a daily withdrawal limit, which is usually lower than your credit limit. You can withdraw up to that limit, and the cash appears in your hand immediately.
If you do not have a PIN or prefer not to use an ATM, you can visit a bank branch — either your card issuer's bank or another bank — and ask a teller for a cash advance. Bring your card and a photo ID. The teller will process the withdrawal and give you cash or a check.
Some credit card issuers send cash advance checks with your card or statements. These are checks you can write to yourself and deposit into your bank account. The amount you deposit becomes a cash advance on your credit card. This method takes longer because you have to wait for the check to clear, but it avoids the ATM fee in some cases (though the cash advance fee still applies).
Fees and interest rates for cash advances
A cash advance fee is charged the moment you withdraw the money. It is usually a percentage of the amount withdrawn — typically 3 to 5 percent — with a minimum fee (often $5 to $10). If you withdraw $500, a 4 percent fee costs $20. If you withdraw $100, the fee might be capped at $5 or $10 depending on your card's terms.
The cash advance APR (annual percentage rate) is the interest rate applied to the balance. Most cards charge a higher APR for cash advances than for regular purchases. Where a purchase APR might be 18 percent, a cash advance APR might be 24 or 28 percent. This rate varies by card issuer and your creditworthiness.
Unlike a purchase, a cash advance has no grace period. Interest starts accruing the day you withdraw the money, not at the end of your billing cycle. If you withdraw $500 on the 1st of the month and pay it back on the 30th, you still owe a full month of interest at the higher rate, plus the upfront fee.
The real cost of a cash advance
To understand what a cash advance actually costs, work through an example. You withdraw $500 with a 4 percent fee and a 25 percent APR. The fee is $20, so you owe $520 immediately. If you pay it back in 30 days, the interest is roughly $10 (500 × 0.25 ÷ 12). Your total cost is $30 for borrowing $500 for one month.
If you carry the balance longer, the cost grows. After three months, you have paid roughly $31 in interest alone, plus the original $20 fee. After six months, interest reaches about $62. The longer you carry the balance, the more you pay.
Compare this to a personal loan or a payday loan from a credit union. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee, and interest does not start until you receive the money. A credit union payday loan (if you are a member) might charge a flat fee of $15 to $20 per $100 borrowed, with no interest. In many cases, these alternatives cost less than a credit card cash advance, especially if you need the money for more than a few weeks.
Daily limits and how much you can withdraw
Your card issuer sets a cash advance limit, which is separate from your credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. This limit is usually lower because cash advances are riskier for the issuer — they are unsecured borrowing with no collateral, and the issuer cannot easily repossess cash the way they can repossess a car.
ATMs also have daily withdrawal limits, which are set by the ATM operator (usually the bank that owns the machine). You might be able to withdraw only $500 per day at an ATM, even if your card's cash advance limit is $2,000. If you need more cash, you can withdraw on multiple days or visit a bank teller, who may be able to process a larger single withdrawal.
To find out your cash advance limit, check your card's terms and conditions, log into your online account, or call the customer service number on the back of your card. The representative can tell you your limit and any daily ATM restrictions.
When a cash advance makes sense
A cash advance is useful when you need cash immediately and have no other way to get it. Examples include a medical emergency that requires cash payment, a car repair at a shop that does not take cards, or a situation where you need to pay someone in person and they will not accept a card.
It makes less sense if you are using it to pay off other debt, to fund a purchase you could make with the card itself, or to cover regular expenses. In those cases, the high fee and interest rate work against you. If you are considering a cash advance to cover a shortfall in your budget, it is worth exploring whether you can reduce spending, increase income, or use a lower-cost borrowing option instead.
If you do take a cash advance, pay it back as quickly as you can. Every day you carry the balance, interest accrues at the higher rate. Paying it off within a week or two minimizes the total cost.
How a cash advance affects your credit
Taking a cash advance does not directly hurt your credit score, but it can indirectly. A cash advance increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 credit limit and you take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization (above 30 percent) can lower your score slightly.
A cash advance also shows up on your credit report as a balance, just like a purchase does. If you carry it for months without paying it down, it signals to lenders that you are carrying debt, which can affect your ability to borrow in the future.
The best way to minimize credit impact is to pay the cash advance off quickly. Once the balance is zero, your utilization drops and the account returns to normal.
Frequently Asked Questions
What is the difference between a cash advance and a regular purchase?
A purchase is charged to your card and you pay it back during your billing cycle, usually with a grace period before interest kicks in. A cash advance is cash you withdraw, and interest starts immediately with no grace period. Cash advances also charge a higher APR and an upfront fee, while purchases do not.
Can I use a credit card to withdraw cash from my bank account?
No. A cash advance withdraws money from your credit card account, not your bank account. The money comes from your available credit, and you owe it back to the card issuer. If you want to access your own money in a bank account, use your debit card or visit a bank teller.
What happens if I do not pay back a cash advance?
The balance stays on your card and interest continues to accrue at the cash advance APR. If you miss payments, late fees are added and your credit score drops. The issuer may eventually send the account to a collection agency. Paying at least the minimum payment on time keeps the account in good standing.
Can I get a cash advance if my credit is bad?
Yes. As long as your card is open and active, you can take a cash advance up to your limit, regardless of your credit score. Your limit may be lower if your credit is poor, but you can still withdraw cash. The card issuer has already taken the risk of opening the account.
Is there a way to get cash from my credit card without paying a fee?
No. Every cash advance incurs a fee, and interest starts immediately. Some cards offer a 0 percent introductory APR on purchases, but this does not apply to cash advances. If you need cash without a fee, use a debit card, withdraw from your bank account, or borrow from a friend or family member.