You can take money off a credit card, but it is not the same as a regular withdrawal and costs more

Taking money off a credit card is called a cash advance. Unlike a debit card, you cannot simply go to an ATM and withdraw from your available credit as if it were a bank account. Instead, you request cash through specific channels — an ATM, your bank, or a convenience store — and the card issuer treats it as a loan against your credit limit, not a purchase.

The moment you take the cash, three costs start: a cash advance fee (usually 3 to 5 percent of the amount), a higher interest rate than your purchase rate (often 5 to 10 percentage points higher), and interest accrues immediately with no grace period. A $300 cash advance can cost $9 to $15 in fees alone, plus daily interest from day one.

Most people take cash advances because they need cash urgently and have no other option. If you are considering one, understand the full cost first and know that the money counts against your credit limit just like a purchase does.

Key Takeaways

  • A cash advance is a loan against your credit limit, not a withdrawal from a bank account, and you pay a fee (3 to 5 percent) plus a higher interest rate than purchases.
  • Interest on a cash advance starts accruing the same day you take it, with no grace period, so the longer you carry the balance the more you pay.
  • You can request a cash advance at an ATM using your PIN, at your bank's branch, or sometimes at a convenience store, but not all cards or ATMs support this.
  • Payments toward a cash advance are applied after purchases are paid off, so if you carry both, your purchase balance stays longer and costs more in interest.
  • A cash advance counts against your credit limit and can lower your credit score by raising your credit utilization ratio.

Where and how to request a cash advance

The most common way to take a cash advance is at an ATM. Insert your card, select "Cash Advance" or "Withdraw Cash" (the exact wording varies by machine), enter your PIN, and choose the amount. Not all ATMs support cash advances — some are debit-only — and not all credit cards allow them, so you may need to try a few machines or call your card issuer first to confirm your card is set up for ATM withdrawals.

You can also request a cash advance at a bank branch, even if it is not your card issuer's bank. Bring your card and ID, tell the teller you want a cash advance, and they will process it. This route is slower than an ATM but works if you prefer speaking to a person or if your card does not work at ATMs.

Some convenience stores and supermarkets offer cash advances at the register, though this is less common now. Ask at checkout whether they offer the service. Fees and terms may differ from ATM advances, so confirm before you proceed.

Avoid taking a cash advance from a third party — a payday lender, a check-cashing service, or a friend who charges you a fee. These routes add extra layers of cost and do not reduce what you owe your card issuer.

Fees and interest rates for cash advances

Every cash advance carries a cash advance fee, charged at the time you take the money. This fee is usually a percentage of the amount — typically 3 to 5 percent — with a minimum (often $5 to $10). A $100 advance might cost $5 to $10 in fees; a $500 advance might cost $15 to $25. Check your card's terms or call your issuer to learn your exact fee percentage before you take the advance.

The interest rate on a cash advance is higher than your purchase rate. If your purchase APR is 18 percent, your cash advance APR might be 25 or 28 percent. This rate applies from the moment you take the cash — there is no grace period like there is for purchases. If you take a $300 advance on the 1st of the month and pay it back on the 30th, you owe 29 days of interest at the higher rate, plus the upfront fee.

To estimate the cost: a $300 cash advance at a 4 percent fee ($12) and 25 percent APR held for 30 days costs roughly $12 + $6.25 in interest, or about $18.25 total. The longer you carry the balance, the more interest accrues.

How cash advances affect your credit limit and credit score

A cash advance counts against your available credit just like a purchase does. If your credit limit is $2,000 and you take a $300 cash advance, your available credit drops to $1,700. You cannot use that $300 for new purchases until you pay off the advance.

Taking a cash advance can lower your credit score in two ways. First, it raises your credit utilization ratio — the percentage of your total credit limit you are using. If you use more of your limit, your score typically drops. Second, the cash advance itself may trigger a hard inquiry or be reported to the credit bureaus as a new account activity, which can cause a small temporary dip.

The score impact is usually temporary and recovers as you pay down the balance and your utilization drops. However, if you carry the cash advance for months, the ongoing high utilization keeps your score lower for longer.

How payments are applied when you have both a cash advance and purchases

If you carry both a cash advance balance and a purchase balance, your payment is applied in a specific order set by your card issuer. Most issuers apply payments to the lowest interest rate balance first, which means your purchase balance gets paid down before your cash advance balance, even though the cash advance costs more in interest.

This works against you. Suppose you have a $500 purchase balance at 18 percent APR and a $300 cash advance at 25 percent APR. You make a $200 payment. The issuer applies the $200 to the purchase, leaving the $300 cash advance untouched. The cash advance keeps accruing interest at 25 percent while you pay off the cheaper balance first.

To avoid this trap, pay off the cash advance as quickly as possible, ideally in full at your next statement. If you cannot pay it all at once, make extra payments beyond your minimum and request that the extra payment be applied to the cash advance specifically. Some issuers allow you to direct where a payment goes; others do not, so ask your issuer about their policy.

Alternatives to a cash advance

Before you take a cash advance, consider whether another option costs less or puts you in a better position. A personal loan from a bank or credit union often has a lower interest rate than a cash advance, though it takes longer to get approved. A balance transfer to a card with a 0 percent introductory rate can move debt at a lower cost, though balance transfers also carry a fee (usually 3 to 5 percent). A payment plan with a creditor or service provider may let you spread the cost without borrowing at all.

If you need cash for an emergency and have no other option, a cash advance is faster than a loan but more expensive. If you need cash for a regular expense or a non-emergency, pause and explore whether you can wait a few days for a personal loan or whether you can use a debit card, a bank transfer, or a payment plan instead.

If you are considering a cash advance because you are short on cash regularly, that is a sign to review your budget and spending. Repeated cash advances are a costly way to manage cash flow and can spiral into debt.

How to pay off a cash advance quickly

The best strategy is to pay off the cash advance in full as soon as possible. Interest accrues daily, so every day you carry the balance costs you money. If you took a $300 advance and can pay it back within a week, do so — the interest will be minimal. If you have to carry it longer, make a plan to pay it off within 30 days if you can.

When you make a payment, confirm that it is being applied to the cash advance and not split between the advance and other balances. Call your issuer or check your online account to see how the payment was applied. If your issuer applies payments to the purchase balance first, ask whether you can make a separate payment directed only to the cash advance.

Do not take another cash advance while you are paying off the first one. Each new advance resets the clock on interest and adds another fee. Focus on paying down what you already owe before you borrow more.

Frequently Asked Questions

What is the difference between a cash advance and a regular ATM withdrawal?

A regular ATM withdrawal uses money already in a bank account. A cash advance borrows against your credit limit and is treated as a loan. You pay a fee and interest on a cash advance; you do not on a regular withdrawal. A cash advance also counts against your credit limit and can affect your credit score.

Can I take a cash advance if I have no available credit?

No. A cash advance requires available credit on your card, just like a purchase does. If your credit limit is $2,000 and you have already charged $2,000, you cannot take a cash advance until you pay down the balance and free up credit.

Do I have to pay the cash advance fee even if I pay it back right away?

Yes. The cash advance fee is charged when you take the money, not when you pay it back. Even if you repay the advance the next day, you still owe the fee. However, you will owe less interest if you repay it quickly.

Will a cash advance show up on my credit report?

A cash advance itself does not appear as a separate line item on your credit report, but the balance counts toward your total credit card balance and your utilization ratio, both of which are reported. If you carry the cash advance for a long time, the high balance can lower your credit score.

Can I take a cash advance from a credit card I do not use?

Yes, if the card is active and has available credit. However, taking a cash advance on an unused card will activate account activity and may trigger a review by the issuer. The fee and interest rate still apply, so it is not a workaround to avoid costs.