You can take cash out of a credit card, but it costs more than a purchase and starts charging interest immediately
Yes, you can withdraw cash using your credit card at an ATM or bank teller. This is called a cash advance. The money comes from your credit limit, just like a purchase does, but the fees and interest work differently — and much less in your favor.
A cash advance charges an upfront fee (usually 3% to 5% of the amount withdrawn), and interest starts accruing the same day you take the money out. There is no grace period like there is for purchases. If you carry a balance, you will pay interest on the cash advance separately from any purchase balance, often at a higher rate.
Most people use cash advances only when they have no other option — they are expensive and create debt faster than regular purchases.
Key Takeaways
- Cash advances charge an upfront fee of 3% to 5% plus daily interest that starts immediately, with no grace period.
- The interest rate on a cash advance is typically 2% to 5% higher than your purchase APR, and it accrues separately from purchase balances.
- You can withdraw cash at ATMs, bank tellers, or through a cash-like transaction at some retailers, but each method has different fees.
- Paying off a cash advance should be your priority because the interest compounds daily and the debt grows faster than other credit card debt.
How cash advances work and what fees apply
When you take a cash advance, your card issuer charges you a cash advance fee at the moment of withdrawal. This fee is a percentage of the amount you withdraw — typically 3%, 4%, or 5%, with a minimum dollar amount (often $5 to $10). So a $200 cash advance with a 4% fee costs you $8 immediately.
On top of the fee, interest begins accruing the same day. The interest rate for cash advances is set in your card's terms and is usually higher than your purchase APR — sometimes 5 percentage points higher or more. Unlike purchases, which have a grace period (usually 21 to 25 days before interest kicks in), cash advances have no grace period. Every day you hold the cash, you owe interest.
The interest is calculated daily and compounds, meaning you pay interest on the interest. If you withdraw $500 at a 25% APR, you owe roughly $3.42 in interest on day one, and that amount grows each day you do not pay it back.
Where you can withdraw cash and what each option costs
You have three main ways to get cash from a credit card:
ATM withdrawal: Insert your card at any ATM and select "cash advance" or "withdrawal." You will be charged the card issuer's cash advance fee plus any ATM operator fee (which can be $1 to $5 if the ATM is not owned by your bank). This is the most common method.
Bank teller withdrawal: Walk into a bank branch and ask to withdraw cash against your credit card. You will pay the card issuer's cash advance fee but usually avoid the ATM operator fee. Some banks require you to be a customer to do this.
Cash-like transactions: Some retailers let you buy a small item and request cash back, which functions like a cash advance. You pay the card issuer's fee and interest, though the retailer may not charge an additional fee. This is less common and not all cards allow it.
How cash advances affect your credit and debt payoff
A cash advance counts as a balance on your credit card, just like a purchase does. It shows up on your credit report and affects your credit utilization ratio — the percentage of your available credit you are using. High utilization can lower your credit score.
The bigger problem is the debt itself. Because interest starts immediately and compounds daily, a cash advance grows faster than a purchase. If you carry a $500 cash advance at 25% APR for three months without paying it down, you will owe roughly $531 in interest alone. The same $500 purchase with a grace period costs you nothing in interest if you pay it off within the grace period.
Credit card issuers also apply payments differently. When you make a payment, most cards apply it to the lowest-interest debt first (usually purchases), leaving the high-interest cash advance to grow. This means you need to pay extra or pay the cash advance off separately to avoid months of compounding interest.
Alternatives to taking a cash advance
Before you use a cash advance, consider whether another option costs less or avoids debt altogether:
Debit card or bank account withdrawal: If you have a debit card or bank account, withdraw cash directly. This costs nothing and creates no debt.
Personal loan: If you need a larger amount, a personal loan from a bank or credit union often has a lower interest rate than a credit card cash advance. You pay interest, but it is usually 8% to 15% rather than 20% to 30%.
Paycheck advance or employer loan: Some employers offer paycheck advances or loans to employees at no interest or low interest. Ask your HR department if this is an option.
Asking for help: If you are in a financial emergency, local nonprofits, religious organizations, or community programs sometimes offer emergency cash assistance with no repayment required.
How to pay off a cash advance quickly
If you have already taken a cash advance, your goal is to pay it off as fast as possible. Every day you carry the balance, interest compounds.
Make a payment as soon as you can, even if it is small. Pay more than the minimum — the minimum payment barely covers interest and leaves the principal untouched. If you can pay the full amount within a few days, do that. If you cannot, pay as much as you can afford and make it your priority over other credit card purchases.
Some cards let you set up automatic payments. If yours does, set up a payment for the cash advance amount to come out of your bank account on a specific date. This removes the temptation to spend the money elsewhere and ensures the debt shrinks.
Cash advances and your card's terms
Your credit card's terms document (called the Schumer Box or the card's disclosure statement) lists the cash advance fee and APR. You can find this on your card issuer's website or in the paperwork that came with your card.
Some cards have a lower cash advance fee or APR than others, though most cards do not advertise this as a feature — cash advances are not a selling point. If you know you will need cash advances regularly, comparing this detail across cards might matter, but it is rare for someone to choose a card primarily for its cash advance terms.
Your card's cash advance limit may also be lower than your overall credit limit. For example, you might have a $5,000 credit limit but only a $1,000 cash advance limit. Check your card's terms or call the issuer to find out what your limit is.
Frequently Asked Questions
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a fee plus interest from day one. A balance transfer moves debt from one card to another and may offer a 0% introductory APR period (usually 6 to 21 months) before interest kicks in. Balance transfers are for moving existing debt; cash advances are for getting cash.
Can I use a credit card to withdraw cash at a store without buying anything?
Some retailers allow cash back when you make a purchase, but you cannot withdraw cash without buying something. ATMs and bank tellers are your only options for cash-only withdrawals.
Does a cash advance hurt my credit score?
It can. A cash advance increases your credit utilization ratio, which can lower your score. It also shows as a balance on your credit report. The impact is temporary — your score recovers as you pay down the balance.
What happens if I cannot pay back a cash advance?
The balance stays on your card and interest continues to compound. If you miss payments, your card issuer may report it to credit bureaus, which damages your credit score. They may also close your account or take legal action to collect the debt.
Can I take a cash advance on a secured credit card?
Yes, most secured cards allow cash advances, though the fees and interest rates are the same as unsecured cards. Some secured card issuers have higher cash advance fees, so check your card's terms.