Yes, you can take cash out with a credit card, but it costs more than a regular purchase and the interest starts immediately
A cash advance is a withdrawal of cash from your credit card account, treated as a loan rather than a purchase. You can get one at an ATM using your PIN, at a bank teller's window, or through a cash advance check mailed by your card issuer. The moment you take the cash, your card issuer charges you a fee — usually 3 to 5 percent of the amount — and begins charging interest on the full balance at a higher rate than your regular purchase APR. Interest accrues daily from the withdrawal date, with no grace period.
The total cost of a cash advance adds up quickly. On a $500 withdrawal at a 5 percent fee and 23 percent APR, you pay $25 upfront plus roughly $2.65 in interest for the first week alone. If you carry the balance for a month, interest alone reaches about $9.58. This makes cash advances one of the most expensive ways to borrow money on a credit card.
Key Takeaways
- Cash advances charge a separate fee (typically 3 to 5 percent) plus a higher interest rate than purchases, starting immediately with no grace period.
- You can withdraw cash at an ATM with your PIN, at a bank teller, or by using a cash advance check, but each method has the same fee structure.
- The interest rate on a cash advance is usually 2 to 5 percentage points higher than your purchase APR and varies by card and issuer.
- Payments to your credit card go toward your lowest-interest debt first, so cash advance balances may take longer to pay off if you also carry purchase balances.
How the cash advance fee works
When you take a cash advance, your card issuer charges a cash advance fee at the time of withdrawal. This fee is a percentage of the amount withdrawn, not a flat dollar amount. Most cards charge between 3 and 5 percent; some charge as much as 10 percent. A $500 cash advance at 5 percent costs $25 before you even leave the ATM.
The fee appears on your statement as a separate charge and counts toward your total balance. It is not refundable if you pay back the cash advance early. Some cards offer a promotional period with no cash advance fee for new cardholders, but this is rare and always has an expiration date stated in your card's terms. Once the promotional period ends, the standard fee applies to all future cash advances.
Interest rates and how they differ from purchases
Cash advances carry a separate APR from your purchase APR, and it is almost always higher. If your purchase APR is 18 percent, your cash advance APR might be 23 or 24 percent. The exact rate depends on your card issuer and your creditworthiness at the time of the advance.
The critical difference is the grace period. When you make a purchase, you typically have 21 to 25 days before interest starts accruing — if you pay the full balance by the due date, you pay no interest. Cash advances have no grace period. Interest begins accruing the day you withdraw the cash, even if you pay it back within days. On a $500 cash advance at 23 percent APR, one week of interest costs roughly $1.55, and that interest is added to your balance whether you can pay it back quickly or not.
Where you can withdraw cash and what each method costs
You have three main ways to access a cash advance: an ATM, a bank teller, or a cash advance check. All three charge the same fee and interest rate — the method does not change the cost, only the convenience and speed of access.
ATM withdrawals are the fastest. You use your credit card and PIN at any ATM, and the cash is available immediately. Some ATMs charge an additional operator fee (usually $2 to $3) on top of your card issuer's cash advance fee, though this fee goes to the ATM operator, not your card issuer. This means a $500 withdrawal could cost you $25 to $30 in fees before interest even begins.
Bank teller withdrawals work at any bank or credit union branch, even if it is not your bank. You present your credit card and request a cash advance. The teller processes it on the spot. No additional operator fee applies, but the card issuer's cash advance fee still does. This method is slower than an ATM but avoids the extra ATM operator charge.
Cash advance checks are mailed to you by your card issuer and can be deposited or cashed like a regular check. You write the check to yourself or a payee, and the amount is treated as a cash advance. These are slower — they take several business days to clear — and you may pay a separate fee to cash them at a bank that is not yours. Cash advance checks are useful if you need to pay a specific person or business but do not want to withdraw physical cash.
How payments are applied when you have both purchases and cash advances
If your credit card statement shows both a purchase balance and a cash advance balance, your payment goes toward the lowest-interest debt first. This means purchases (lower APR) are paid down before cash advances (higher APR). If you owe $1,000 in purchases at 18 percent and $500 in cash advances at 23 percent, and you make a $500 payment, that $500 goes entirely to the purchase balance. The cash advance keeps accruing interest at the higher rate.
This structure means cash advances stay on your account longer and cost more in total interest. To pay off a cash advance faster, you must make payments large enough to cover your entire purchase balance first, then attack the cash advance. Some card issuers allow you to request that payments be applied to the highest-interest balance instead, but you must ask — it is not automatic. Check your card's terms or call customer service to see if your issuer offers this option.
When a cash advance makes sense and when it does not
A cash advance is expensive and should be a last resort. The fee plus interest means you are paying 6 to 10 percent or more just to access your own credit. If you need cash for an emergency and have no other option, a cash advance is faster than a personal loan or payday loan, but slower and cheaper than a payday loan is not a strong endorsement.
A cash advance makes more sense if you are using it to pay off a higher-interest debt — for example, using a 23 percent cash advance to pay off a 29 percent payday loan. It also makes sense if you have a promotional 0 percent APR period on cash advances (rare) and can pay the balance off before the promotion ends. In most other situations, alternatives like a personal loan, a line of credit, or simply waiting until you can access your bank account are cheaper and carry less risk.
What happens if you cannot pay back a cash advance
If you do not pay back a cash advance, it behaves like any other credit card balance. Interest continues to accrue at your cash advance APR, late fees apply if you miss the due date, and the balance is reported to the credit bureaus. A cash advance does not have special collection rules — your card issuer treats it the same way as a purchase balance in default.
If your account goes to collections, the collector can pursue the full amount owed, including all accrued interest and fees. A cash advance does not disappear or convert to a different type of debt; it simply becomes an older, larger balance with more interest attached. The longer you carry it unpaid, the more expensive it becomes and the more damage it does to your credit score.
Frequently Asked Questions
Can I use a credit card cash advance to pay another credit card?
Yes, you can use the cash from a cash advance to pay another card's balance. However, this is almost never worth the cost. You are paying a 3 to 5 percent fee plus a higher interest rate to move money between cards. If you are trying to consolidate debt, a balance transfer (which moves the balance directly between cards) or a personal loan is cheaper.
Does a cash advance hurt my credit score?
A cash advance itself does not hurt your credit score, but the balance it creates does. It increases your credit utilization (the percentage of your available credit you are using), which can lower your score. If you miss payments or let the balance grow, the damage is the same as with any other credit card debt.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves an existing balance from one card to another; a cash advance gives you physical cash. Balance transfers usually have a lower fee (1 to 3 percent) and may have a promotional 0 percent APR period. Cash advances charge higher fees and interest with no grace period. If you need cash, a cash advance is your only option. If you are moving debt, a balance transfer is almost always cheaper.
Can I get a cash advance if my credit card is maxed out?
No. A cash advance draws from your available credit, just like a purchase. If your card is maxed out, you have no available credit left, and the issuer will decline the cash advance. You would need to pay down your balance first or request a credit limit increase.
Will my card issuer let me set a limit on cash advances?
Yes. Most card issuers allow you to set a separate cash advance limit lower than your purchase limit, or to disable cash advances entirely. You can usually do this online in your account settings or by calling customer service. Setting a low limit or disabling cash advances is a good way to protect yourself from using them impulsively.