Yes, you can take cash out with a credit card, but it costs more than a regular purchase
Most credit cards let you withdraw cash at an ATM or from a bank teller using your card. This is called a cash advance. The moment you take the money out, your card issuer starts charging you interest on that amount — usually at a higher rate than your regular purchase APR. You also pay an upfront fee, typically 3 to 5 percent of the cash you withdraw. Because of these costs, a cash advance should be a last resort, not a convenient way to get spending money.
The key difference between a cash advance and a regular purchase is timing. When you buy something with your card, you get a grace period — usually 21 to 25 days — before interest starts. With a cash advance, interest begins accruing immediately, on the day you withdraw the money. There is no grace period.
Key Takeaways
- Cash advances charge both an upfront fee (typically 3 to 5 percent) and a higher interest rate than regular purchases, with no grace period.
- Interest on a cash advance starts the day you withdraw it, not at the end of your billing cycle like a purchase.
- You can withdraw cash at an ATM using your PIN, or ask a bank teller for a cash advance by showing your card.
- The total cost of a cash advance grows quickly, so paying it back as soon as possible is the only way to limit the damage.
How much a cash advance actually costs you
Let's say you take out $500 in cash. Your card charges a 5 percent cash advance fee, so you pay $25 upfront. That $500 now costs you $525 before you even spend it. Then your card's cash advance APR — let's say it's 28 percent — starts charging interest on the full $500 immediately. At 28 percent annual interest, you're paying roughly $11.67 per month just in interest on that $500, assuming you make no payments.
If you pay back the $500 within a week, your interest cost might be around $2.70 plus the $25 fee, for a total of $27.70. But if you carry that balance for three months, you could pay $40 or more in interest alone, on top of the $25 fee. The longer you carry a cash advance, the more expensive it becomes.
Compare this to a regular purchase: if you charge $500 to your card and pay it off within the grace period, you pay nothing in interest. Even if you carry it for a month at a 20 percent APR, you'd pay roughly $8.33 in interest — far less than a cash advance.
Where you can withdraw cash with your credit card
You have two main options: an ATM or a bank branch. At an ATM, insert your card, enter your PIN (which you set up when you opened the account), and select the cash advance option. The ATM will show you the fee it charges — this is separate from your card issuer's fee — and ask you to confirm before dispensing cash.
At a bank branch, walk up to a teller with your card and ask for a cash advance. You'll need to show your ID and sign a receipt. The teller will tell you the fee and process the withdrawal on the spot. This method is slower than an ATM but useful if you need a large amount or if you're uncomfortable using an ATM.
Some card issuers set a limit on how much you can withdraw in a single day or in a billing cycle. This limit is separate from your credit limit. For example, your card might have a $5,000 credit limit but only allow $500 in cash advances per day. Check your card's terms or call the number on the back of your card to find out your cash advance limit.
Why your cash advance APR is higher than your purchase APR
Card issuers charge a higher interest rate on cash advances because they see it as riskier. When you buy something with your card, the merchant and the card network help protect the issuer — they can dispute the charge if something goes wrong. With a cash advance, the money is yours immediately, and there's no merchant or dispute process to fall back on. The issuer is lending you cash with less protection, so they charge more.
Your cash advance APR is set when you open the account and is based on your credit score at that time. If your credit score improves later, you can call your issuer and ask them to lower your APR, but they're not required to do so. The cash advance APR almost never comes down on its own.
How cash advances affect your credit score
A cash advance itself doesn't hurt your credit score directly. However, it does count toward your credit utilization — the percentage of your total credit limit you're using. If you take out a $500 cash advance on a card with a $2,000 limit, your utilization jumps to 25 percent. High utilization can lower your score slightly, especially if you're already using a lot of your available credit.
The bigger risk is that a cash advance makes it easier to fall behind on payments. Because interest starts immediately and the balance grows fast, many people struggle to pay it back. If you miss a payment, that will damage your score far more than the cash advance itself. The best way to protect your score is to treat a cash advance as an emergency-only tool and pay it back as quickly as you can.
When a cash advance might make sense (and when it won't)
A cash advance makes sense only in a true emergency when you have no other way to get cash — your car breaks down and you need to pay a mechanic who doesn't take cards, or you're traveling and your debit card is lost. Even then, you should pay it back within days, not weeks.
A cash advance does not make sense for everyday spending, even if you're short on cash that week. The fees and interest will cost you far more than the convenience is worth. If you need cash regularly, use your debit card or visit your bank's ATM instead. If you're in a tight spot financially, look for other options first: a personal loan from a bank or credit union, a payment plan with the person or business you owe money to, or help from a local nonprofit or government program.
How to pay back a cash advance quickly
When you make a payment to your credit card, the issuer applies it to your balances in a specific order set by law. Purchases are paid first, then cash advances. This means if you have both a purchase balance and a cash advance balance, your payment goes toward the purchase first, and the cash advance keeps accruing interest.
To pay off a cash advance faster, call your card issuer and ask if you can make a payment that goes directly to the cash advance balance. Some issuers allow this; others do not. If yours doesn't, your only option is to pay down your entire balance — purchases and all — until the cash advance is gone.
The moment you take out a cash advance, make a plan to pay it back. Set a specific date and amount. If you can pay it back within a week, do so. Every day you carry it costs you money in interest.
Frequently Asked Questions
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it's a bad idea. You'd be paying a cash advance fee and interest rate on money you're using to pay another card's interest and fees. You'd end up paying more, not less. If you're struggling with multiple card balances, contact a nonprofit credit counselor instead — they can help you make a plan without taking on more debt.
What's the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another and usually comes with a lower introductory APR. A cash advance gives you actual cash and charges a higher APR from day one. Balance transfers are meant for moving existing debt; cash advances are for getting cash. They're different tools with different costs.
Will taking a cash advance hurt my credit score?
The cash advance itself doesn't hurt your score, but it increases your credit utilization, which can lower your score slightly. The real damage comes if you can't pay it back and miss payments. Keep your utilization low and pay the balance back quickly to minimize any impact.
Can I get 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 entire limit, you can't take out a cash advance until you pay down your balance. Some cards have a separate cash advance limit, but it still counts toward your total credit limit.
What if I can't pay back the cash advance?
Contact your card issuer immediately and explain your situation. Some issuers offer hardship programs that lower your interest rate or let you pause payments temporarily. The longer you wait, the more interest accrues and the harder it becomes to recover. Getting ahead of the problem is always better than ignoring it.