Yes, you can take cash out from a credit card, but it will cost you more than a regular purchase

Most credit cards let you withdraw cash at an ATM or get cash back at a store checkout. The catch is that cash advances — that's what the card company calls it — charge you fees and interest that start immediately, with no grace period. You pay interest from day one, not from your statement date like you do with regular purchases.

The cost difference is real. A cash advance might cost you 3 to 5 percent in fees alone, plus an interest rate that is often higher than your regular purchase rate. If you need cash, it's worth understanding exactly what you'll pay before you do it.

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 accruing immediately, even if you pay your full statement balance on time.
  • You can get cash at an ATM using your credit card PIN, at a bank teller window, or sometimes at a store checkout, but each method has different fees.
  • If you need cash regularly, a debit card or a personal loan may cost you less than repeated cash advances.

How cash advances work and what they cost

When you take out a cash advance, your card issuer treats it differently from a purchase. You pay three separate costs: a cash advance fee (a percentage of the amount you withdraw), a higher interest rate (called the cash advance APR), and sometimes an ATM operator fee if you use an out-of-network machine.

The cash advance fee is usually between 3 and 5 percent of what you withdraw. So if you take out $500, you might pay $15 to $25 just for the withdrawal. That fee appears on your next statement. The interest rate for cash advances is typically 2 to 3 percentage points higher than your regular purchase APR — so if your purchase rate is 18 percent, your cash advance rate might be 21 percent. And unlike purchases, that interest starts the day you withdraw the cash, not at the end of your billing cycle.

If you use an ATM that is not owned by your card issuer's bank, you may also pay an ATM operator fee — usually $2 to $3 — on top of everything else. Using your card issuer's own ATMs avoids this extra charge.

Where you can withdraw cash and how long it takes

You have three main options: an ATM, a bank teller, or a store checkout. An ATM is the fastest — you insert your card, enter your PIN, and the cash comes out immediately. You can use any ATM, but using one owned by your card issuer's bank avoids the operator fee. If you don't know your PIN, you'll need to set one up first, usually through your card issuer's website or app.

At a bank teller window, you can withdraw cash by showing your credit card and a photo ID. This takes longer than an ATM but lets you ask questions and get a receipt on the spot. Some stores offer cash back at checkout when you make a purchase, though the amount is usually limited to $20 to $100 and you have to buy something first.

All three methods post to your account immediately, so the interest clock starts right away. There is no waiting period.

Why cash advances cost more than other ways to borrow

A cash advance is expensive because the card issuer sees it as riskier than a regular purchase. With a purchase, you're buying something that has value — the merchant guarantees the transaction. With cash, you're just borrowing money with nothing backing it up. That's why the interest rate is higher and why there's no grace period.

If you need cash regularly, compare the cost of a cash advance to other options. A personal loan from a bank or credit union often has a lower interest rate and no upfront fee. A debit card (if you have a checking account) lets you withdraw cash for free. Even a payday loan, which is expensive, might cost less than multiple cash advances if you're only borrowing for a week or two — though payday loans come with their own serious risks.

How to minimize the cost if you do take a cash advance

If you decide a cash advance is your best option, you can reduce what you pay. First, withdraw only what you need — every dollar you take out costs you 3 to 5 percent in fees, so taking out $100 instead of $500 saves you real money. Second, use an ATM owned by your card issuer's bank to avoid the operator fee. Third, pay back the cash advance as fast as you can, because interest accrues daily.

When you make a payment to your card, the card issuer applies it to your lowest-interest debt first — usually regular purchases — before it touches the cash advance. So if you have both a purchase balance and a cash advance balance, your payment goes to the purchase first. To pay down the cash advance faster, contact your card issuer and ask if you can direct a payment specifically to the cash advance portion. Some issuers allow this; others don't.

What to do if you can't afford to pay back the cash advance

If you take out a cash advance and then can't pay it back, the interest will keep growing. The balance rolls into your next statement, and you'll owe interest on top of interest. If you miss a payment, you'll also face a late fee and a possible increase to your interest rate.

If you're in this situation, contact your card issuer as soon as possible. Explain what happened and ask about a hardship program or a payment plan. Many issuers have programs for people going through temporary financial difficulty. You won't get the fees waived, but you might get a lower interest rate or a plan to pay back the balance over time without additional penalties.

Alternatives to cash advances

Before you take a cash advance, consider whether one of these options might work better. A personal loan from a bank, credit union, or online lender usually has a lower interest rate and lets you borrow a larger amount. The downside is that approval takes a few days. A line of credit from your bank works like a credit card but often has a lower interest rate. A payday loan is fast and requires less credit history, but the interest rates are very high — often 400 percent APR or more — so use this only as a last resort for a very short-term need.

If you have a savings account, even a small one, using that money avoids all interest and fees. If you have friends or family who can lend you money, that's often the cheapest option, though it comes with its own complications.

Frequently Asked Questions

Will taking a cash advance hurt my credit score?

A cash advance itself doesn't hurt your score, but it does increase your credit utilization — the percentage of your available credit you're using. If your utilization goes above 30 percent, it can lower your score slightly. Paying back the cash advance quickly brings your utilization back down and stops the damage.

Can I take a cash advance if my credit card is maxed out?

No. Your cash advance limit is part of your overall credit limit. If you've used your full limit on purchases, you can't take out a cash advance. Some card issuers set a separate, smaller cash advance limit — for example, $500 even if your total limit is $5,000 — so check your card agreement to see what yours is.

What's the difference between a cash advance and a balance transfer?

A balance transfer moves debt from one card to another (usually to take advantage of a lower interest rate). A cash advance is borrowing new money in the form of cash. Balance transfers have their own fees and rates, but they're different products with different purposes.

Do I have to use my PIN to get a cash advance?

At an ATM, yes — you need your PIN. At a bank teller window or store checkout, you usually just need your card and ID. If you don't have a PIN set up, you can create one through your card issuer's website or app, or call the number on the back of your card.