Yes, you can withdraw cash from a credit card, but it is not the same as using an ATM with a debit card
Most credit cards let you take out cash at an ATM, but the bank charges you a fee for doing it, and the interest rate starts immediately — there is no grace period like there is for purchases. A cash advance is what this transaction is called, and it is treated as a loan from the moment the money leaves the machine, not as a purchase on your statement.
The cost difference matters. If you use your card to buy groceries, you typically have 21 to 25 days before interest kicks in. If you use it to withdraw $200 from an ATM, interest starts accruing that same day, usually at a higher rate than your purchase APR. On top of that, you pay an upfront fee — often 3% to 5% of the amount withdrawn, with a minimum fee of $2 to $10.
Cash advances exist because credit card companies make money from them. You should treat a cash advance as a last resort, not a convenient way to get spending money.
Key Takeaways
- Cash advances charge an upfront fee (typically 3% to 5% of the amount) plus a higher interest rate that starts immediately, with no grace period.
- You can withdraw cash at most ATMs using your credit card, but you need to know your PIN and have a cash advance limit set by your card issuer.
- The interest rate for cash advances is usually 2% to 5% higher than your regular purchase APR, and it compounds daily.
- Some credit cards do not allow cash advances at all, and some limit how much you can withdraw based on your credit limit.
How the cash advance fee and interest work
When you withdraw cash, two charges hit your account immediately. The first is the cash advance fee, which appears as a separate line item on your statement. This fee is a percentage of the amount withdrawn — commonly 3%, 4%, or 5% — with a floor (a minimum you pay no matter how small the withdrawal). If you withdraw $100 and the fee is 3% with a $2 minimum, you pay $3. If you withdraw $50, you still pay $2.
The second charge is interest, which begins accruing the day you withdraw the money. Unlike a purchase, there is no interest-free period. If your card's cash advance APR is 24% and you withdraw $200, you owe roughly $4 in interest after one month, whether or not you have paid any of it back. That interest compounds daily, so the longer the balance sits, the faster it grows.
Your card issuer sets a separate cash advance limit, which may be lower than your total credit limit. 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 yours is.
Where you can withdraw cash and what you need
You can withdraw cash at most ATMs that display your card network's logo — Visa, Mastercard, American Express, or Discover. You can also get a cash advance at many bank branches and some retail locations, though this is less common. The ATM is the fastest option.
To withdraw cash, you need your credit card and your PIN. If you do not have a PIN set up, you will need to contact your card issuer to create one before you can use an ATM. Some issuers let you set a PIN online or through their app; others require a phone call. This process usually takes a few minutes to a few hours.
Not all ATMs charge the same fee. Your card issuer may charge you a cash advance fee, and the ATM operator may charge an additional ATM fee (often $2 to $3). These are separate charges, so the total cost of withdrawing $100 could easily be $6 to $8 before interest.
Why cash advances have a higher interest rate
Credit card companies charge more for cash advances because they see them as riskier. When you buy something with a credit card, the merchant has a record of the transaction and the item you purchased. When you withdraw cash, there is no record of what you spent it on, and the issuer has less ability to recover the money if you do not pay.
The higher rate also reflects the fact that cash advances are often a sign of financial stress. People typically use them when they need money urgently and have no other option. Card issuers price this risk into the APR, which is why cash advance rates are often 5 to 10 percentage points higher than purchase rates on the same card.
This is not a penalty — it is how the card issuer prices the product. But it means that a cash advance is an expensive way to borrow money, usually more expensive than a personal loan, a line of credit, or even a payday loan from some lenders.
How cash advances affect your credit and your statement
A cash advance shows up on your credit report as a separate transaction type, not as a purchase. Credit bureaus and lenders can see that you took a cash advance, which some view as a sign of financial strain. This does not directly hurt your credit score, but it can be a signal that you are short on cash.
The cash advance balance counts toward your total credit utilization, which is the percentage of your available credit you are using. If you have a $5,000 limit and a $500 cash advance balance, your utilization is 10%. High utilization can lower your credit score, so paying off a cash advance quickly is important for that reason alone.
On your statement, the cash advance appears as its own line item with its own balance, interest rate, and minimum payment. If you make a payment to your card, the issuer typically applies it to your lowest-interest balance first (usually purchases), so your cash advance balance may sit and accrue interest while you pay down other charges.
Alternatives to taking a cash advance
Before you withdraw cash from your credit card, consider other options. If you need cash for an emergency, a personal loan from a bank or credit union often has a lower interest rate than a cash advance. If you have a savings account, withdrawing from savings costs nothing and does not create new debt.
If you need cash to pay a bill, many billers accept credit card payments directly, so you can use your card without the cash advance fee and interest. If you need cash for everyday spending, a debit card linked to a checking account is free and immediate.
If you are considering a cash advance because you are short on money, that is a sign to look at your budget and spending. A cash advance is a short-term fix that makes the problem worse by adding fees and interest. A financial counselor or a budgeting app can help you find the real issue and address it.
What happens if you do not pay back a cash advance
If you do not pay back a cash advance, the balance accrues interest at your cash advance APR, which is usually high. After 30 days of non-payment, the issuer may report the account as late to the credit bureaus, which damages your credit score. After 180 days, the account may be charged off and sold to a debt collector.
A cash advance is unsecured debt, meaning the issuer cannot seize your property or bank account to recover it (though a debt collector may pursue legal action). But the damage to your credit score can last seven years, making it harder to borrow money, rent an apartment, or even get a job in some fields.
If you are struggling to pay back a cash advance, contact your card issuer to discuss a payment plan or hardship program. Many issuers offer options to lower your interest rate or waive fees if you are in financial difficulty.
Frequently Asked Questions
Can I withdraw cash from a credit card at any ATM?
You can withdraw cash at most ATMs that display your card network's logo (Visa, Mastercard, American Express, or Discover). Some ATMs may decline your card if it is not recognized or if you have reached your cash advance limit. You will need a PIN to complete the transaction.
Is there a limit to how much cash I can withdraw?
Yes. Your card issuer sets a cash advance limit, which is separate from your credit limit and is usually lower. You may also hit a daily withdrawal limit set by the ATM operator. Check your card's terms or contact your issuer to find out your specific limit.
Do I have to pay interest on a cash advance right away?
Yes. Interest on a cash advance starts accruing the day you withdraw the money, with no grace period. You also pay an upfront fee (usually 3% to 5%) at the time of withdrawal. Both charges appear on your statement.
What is the difference between a cash advance and a regular purchase?
A purchase has a grace period (typically 21 to 25 days) before interest starts, and the interest rate is lower. A cash advance charges interest immediately, at a higher rate, and includes an upfront fee. Cash advances are treated as a separate type of debt on your account.
Will a cash advance hurt my credit score?
A cash advance itself does not directly hurt your score, but it counts toward your credit utilization, which can lower your score if it is high. If you do not pay it back on time, late payments will damage your score. The fact that you took a cash advance may also signal financial stress to lenders.