Yes, you can withdraw cash from a credit card, but it is not the same as using the card to buy something

A cash advance is a withdrawal of actual money from your credit card account. You can get cash at an ATM, at a bank teller window, or sometimes at a store checkout. The money comes from your credit line, not from a debit account or savings account. You owe it back just like a purchase, but the fees and interest rates are different — and usually much higher.

The key difference: when you buy something with your card, the purchase price is the only amount you owe. With a cash advance, you pay a fee upfront, and interest starts accruing immediately. There is no grace period like there is for regular purchases. This makes cash advances expensive even if you pay them back quickly.

Key Takeaways

  • Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, starting immediately with no grace period.
  • You can withdraw cash at an ATM using your credit card PIN, at a bank teller, or through a cash advance check, depending on your card and bank.
  • The interest you owe on a cash advance is calculated daily from the moment you withdraw the money, not from your statement date.
  • Paying back a cash advance should be your priority because the interest rate is typically 5 to 10 percentage points higher than your regular purchase APR.

How much does a cash advance cost

Every cash advance comes with two costs: an upfront fee and an interest rate. The upfront fee is usually between 3 and 5 percent of the amount you withdraw, though some cards charge a flat dollar amount instead (like $10 minimum). A $300 cash advance at 4 percent costs $12 in fees alone.

The interest rate on a cash advance is separate from your regular purchase APR and is almost always higher. If your card charges 18 percent APR on purchases, the cash advance APR might be 24 or 28 percent. This rate applies from the day you withdraw the money, with no grace period. Interest accrues daily until you pay it back.

To see your card's specific cash advance fee and APR, check your card's terms document (called the Schumer Box or pricing information) on your card issuer's website or in your account. The fee percentage and APR are listed separately from purchase terms.

Where you can withdraw cash from a credit card

The most common method is an ATM. Insert your credit card and enter your PIN (which you may need to set up if you have never done a cash advance before). The ATM will show you the fee it charges — usually $3 to $5 — on top of your card issuer's fee. You can then withdraw up to your available credit limit, though some cards set a lower daily or monthly limit for cash advances.

You can also visit a bank branch and ask a teller for a cash advance. Bring your credit card and ID. The teller will process it the same way an ATM does, though you may avoid the ATM operator fee (but you still pay your card issuer's fee). Some banks charge a teller fee anyway, so ask before you proceed.

A third option is a cash advance check. Your card issuer may send you checks linked to your credit line. You write a check to yourself, deposit it in your bank account, and the amount is treated as a cash advance. This method also charges the same fee and interest rate, and the money appears in your account within a few business days.

How interest is calculated on cash advances

Interest on a cash advance starts the day you withdraw the money, not on your statement closing date. This is different from purchases, which have a grace period (usually 21 to 25 days) before interest starts. With a cash advance, you are paying interest from day one.

The interest is calculated daily based on your cash advance balance and the cash advance APR. If you withdraw $500 at a 25 percent APR, you owe about $3.42 in interest per day (before any payments). The longer the money sits, the more interest compounds. After 30 days, you would owe roughly $102 in interest alone, on top of the original withdrawal fee.

Your monthly statement will show the cash advance balance separately from your purchase balance. You can pay them down in any order, but paying the cash advance first saves you the most money because of the higher interest rate.

Your credit limit and cash advance limits

A cash advance counts against your total credit limit. If your limit is $5,000 and you withdraw $1,000 in cash, you have $4,000 left to spend on purchases. The cash advance reduces your available credit immediately.

Many card issuers also set a separate cash advance limit that is lower than your total credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your account online or call the number on the back of your card to find out what your cash advance limit is. If you try to withdraw more than this limit, the ATM or teller will decline the transaction.

When a cash advance makes sense (and when it does not)

A cash advance is rarely the right choice for everyday spending. The fees and interest are too high. If you need cash for a purchase, use your debit card or withdraw from your bank account instead.

A cash advance might make sense in a genuine emergency — you need cash immediately and have no other way to get it. Even then, treat it as a short-term loan you will pay back as fast as possible. The longer you carry the balance, the more interest you owe.

Do not use a cash advance to pay another debt or to cover a shortfall in your budget. The interest rate is too high, and you will end up owing more money overall. If you are short on cash regularly, that is a sign to look at your spending or income, not to borrow at 25 percent interest.

How to minimize the cost if you do take a cash advance

If you decide to take a cash advance, withdraw only what you need. Every dollar you withdraw costs you the upfront fee plus daily interest. A $100 advance costs less than a $500 advance, even at the same interest rate.

Pay it back as quickly as possible. The interest accrues daily, so every day you wait costs you money. If you can pay it back within a week, do it. If you are going to carry it for months, the total cost becomes very high very fast.

Avoid using multiple ATMs or methods. Each one charges a separate fee. Withdraw the full amount you need in one transaction at one location, rather than making several small withdrawals.

Frequently Asked Questions

Does taking a cash advance hurt my credit score?

A cash advance itself does not directly hurt your score, but it does increase your credit utilization (the amount of your credit limit you are using). High utilization can lower your score temporarily. Once you pay the balance down, your utilization drops and your score recovers. The bigger risk is missing a payment on the cash advance, which will damage your score.

Can I take a cash advance if I have a 0 percent introductory APR?

No. The 0 percent rate applies only to purchases (or sometimes balance transfers), not to cash advances. A cash advance will be charged the regular cash advance APR from day one, even if your card has a 0 percent intro offer. This is one reason to avoid cash advances on cards with promotional rates.

What happens if I do not pay back a cash advance?

The interest keeps accruing and the balance grows. If you miss a payment, you will be charged a late fee and your interest rate may increase. The debt can be reported to credit bureaus and damage your credit score. The card issuer can also close your account or take legal action to recover the debt.

Is there a difference between a cash advance and a balance transfer?

Yes. A balance transfer moves debt from one card to another (or from another lender to your card). A cash advance withdraws actual cash from your credit line. Balance transfers sometimes have lower introductory rates, while cash advances always charge the higher cash advance APR. They are two separate features with different costs.