Yes, you can take money out of your credit card, but it costs more than a purchase and the interest starts immediately

A cash advance is a withdrawal of cash from your credit card account. You can get one at an ATM using your card's PIN, at a bank teller window, or through a cash advance check that comes with your card. The money is yours to use however you want — it is not restricted to purchases like the card itself.

The catch is that cash advances are expensive. Your card issuer charges a separate fee (usually 3 to 5 percent of the amount withdrawn), and the interest rate on the cash advance is almost always higher than the rate on regular purchases. Unlike purchases, which have a grace period before interest starts, interest on a cash advance begins accruing the day you withdraw it — there is no interest-free window.

Because of these costs, a cash advance should be a last resort, not a convenient way to get spending money. If you need cash, a personal loan, a line of credit, or even a payday loan from a credit union will usually cost less.

Key Takeaways

  • Cash advances charge a separate fee (typically 3 to 5 percent) plus a higher interest rate than purchases, with interest starting immediately.
  • You can withdraw cash at an ATM with your PIN, at a bank teller, or by depositing a cash advance check, but each method has the same fees and rates.
  • The interest rate on a cash advance is set by your card issuer and does not have a grace period — interest accrues from day one.
  • Paying off a cash advance takes longer because most card issuers apply your payments to purchases first, leaving the advance to accrue interest.

How the cash advance fee works

When you take a cash advance, your card issuer charges a cash advance fee at the time of the withdrawal. This fee is a percentage of the amount you withdraw — typically between 3 and 5 percent, though some cards charge a flat minimum (such as $5 or $10) if the percentage would be smaller.

The fee is added to your balance immediately. If you withdraw $500 with a 4 percent fee, you owe $520 right away. This fee is separate from interest and is not negotiable — it is part of your card's terms and does not change based on your credit score or payment history.

Some cards offer a lower cash advance fee for the first few months after you open the account, or for balance transfers (which work similarly to cash advances). Check your card's disclosure documents or your online account to find your specific fee.

Interest rates and the lack of a grace period

Cash advances carry a different interest rate than purchases on the same card. This cash advance APR is usually 3 to 5 percentage points higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 23 percent.

Unlike purchases, which typically have a 21 to 25-day grace period before interest starts, a cash advance has no grace period. Interest begins accruing on the day you withdraw the money. This means that even if you pay the full amount back within a week, you will still owe interest for those seven days.

The interest compounds daily. On a $500 cash advance at 23 percent APR, you accrue roughly $3.15 per day in interest. If you carry the balance for a month, you will owe about $95 in interest alone, plus the original cash advance fee.

Where you can withdraw cash and what each method costs

You have three main ways to get cash from your credit card account. All three charge the same fee and interest rate — the method does not change the cost, only the convenience.

ATM withdrawal: Use your card's PIN at any ATM. The withdrawal is processed instantly, and the fee and interest start accruing that day. Some ATMs charge an additional operator fee (usually $2 to $3) on top of your card issuer's cash advance fee.

Bank teller withdrawal: Walk into a bank branch (your card issuer's bank or another bank) and ask for a cash advance. Bring your card and ID. The teller will process it on the spot. You pay the same cash advance fee and interest, with no additional ATM operator fee.

Cash advance checks: Your card issuer may send you checks that draw directly from your credit line. You write a check to yourself or to someone else, deposit it, and the amount is treated as a cash advance. These checks carry the same fee and interest rate as ATM withdrawals. Some cards do not offer them anymore.

How payments are applied when you have both purchases and cash advances

If your card has both a purchase balance and a cash advance balance, your payments are applied in a specific order set by federal law. Your card issuer must apply payments to the balance with the highest interest rate first — which is almost always the cash advance.

In practice, this means your cash advance gets paid down faster than it would if payments were split evenly. However, if you only make the minimum payment, it may not be enough to cover all the interest on both balances, and your total debt will grow.

To avoid this trap, pay more than the minimum and target the cash advance specifically. Ask your card issuer how to make a payment that goes directly to the cash advance, or pay the full cash advance balance before making any new purchases.

Alternatives that cost less than a cash advance

Before you take a cash advance, consider these cheaper options for getting cash:

Personal loan from a bank or credit union: A personal loan typically has a lower interest rate than a cash advance (often 6 to 36 percent depending on your credit) and no cash advance fee. You borrow a fixed amount and repay it in fixed monthly installments. The downside is that approval takes a few days to a week.

Credit union cash advance: If you are a member of a credit union, ask about their cash advance or short-term loan options. Credit unions often charge lower rates and smaller fees than card issuers.

Payday loan from a credit union: A credit union payday loan is capped at $500 and charges a maximum fee of $15 per $100 borrowed (15 percent). It is due in full on your next payday. This is still more expensive than a personal loan but cheaper than a credit card cash advance in many cases.

Borrowing from family or friends: If possible, this costs nothing and avoids debt entirely.

What happens if you cannot pay back a cash advance

If you carry a cash advance balance without paying it off, the interest and fees compound quickly. After a few months, the interest alone can equal 20 to 30 percent of the original amount you withdrew.

If you miss payments, your card issuer will report the missed payment to the credit bureaus after 30 days, which will damage your credit score. After 120 days of missed payments, the card issuer may close your account and send the debt to a collection agency.

If you are struggling to repay a cash advance, contact your card issuer and ask about a hardship program or a payment plan. Some issuers will lower your interest rate or waive fees if you commit to a repayment schedule. You can also speak with a nonprofit credit counselor through the National Foundation for Credit Counseling (NFCC), which offers free or low-cost guidance.

Frequently Asked Questions

Can I use a cash advance to pay off another credit card?

Yes, but it is usually a bad idea. A cash advance to pay another card's balance costs you the cash advance fee plus a higher interest rate. A balance transfer (moving the balance from one card to another) is cheaper if your new card offers a 0 percent introductory rate. If you do not have access to a balance transfer, a personal loan is almost always cheaper than a cash advance.

Does a cash advance show up differently on my credit report?

No. A cash advance is part of your credit card balance and is reported the same way as purchases. However, the higher interest rate and fees mean your balance grows faster, which can hurt your credit score if it raises your credit utilization ratio (the amount you owe divided by your credit limit).

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

No. A cash advance draws from your available credit, just like a purchase. If you have no available credit left, you cannot take a cash advance. You would need to pay down your balance first.

What is the difference between a cash advance and a balance transfer?

A balance transfer moves debt from one card to another and may have a lower fee and a temporary 0 percent interest rate. A cash advance gives you cash in hand and charges a higher fee and interest rate from day one. Use a balance transfer to move existing debt; use a cash advance only if you need actual cash and have no other option.

Will taking a cash advance hurt my credit score?

Not immediately, but it can hurt your score over time. A cash advance increases your credit utilization ratio, which makes up 30 percent of your credit score. The higher your utilization, the lower your score. Additionally, if you carry the balance and miss payments, your score will drop significantly.