Yes, you can pull 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 it at an ATM using your card's PIN, at a bank teller's window, or through a cash advance check that comes with your card. The money is yours to spend however you want — it is not tied to a purchase.
The catch is that cash advances cost significantly more than regular purchases. You pay an upfront fee (usually 3 to 5 percent of the amount withdrawn), a higher interest rate than your purchase APR, and interest starts accruing immediately with no grace period. A $500 cash advance can cost $15 to $25 just to take it out, plus interest from day one.
Most people use cash advances only when they have no other option — to pay a bill that does not take cards, to cover an emergency when they cannot access their bank account, or to get cash when traveling. If you have alternatives, they are almost always cheaper.
Key Takeaways
- Cash advances charge a 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 branch, or by depositing a cash advance check.
- The interest rate on a cash advance is usually 2 to 5 percentage points higher than your purchase APR and does not have a grace period.
- Paying back a cash advance takes priority over purchases in most card payment structures, but the interest cost makes it an expensive way to borrow.
How the cash advance fee works
The fee is a one-time charge taken from the amount you withdraw. If your card charges a 4 percent cash advance fee and you withdraw $500, you pay $20 upfront and receive $480. That $20 is added to your card balance immediately.
Some cards cap the fee at a flat dollar amount — for example, "$10 or 3 percent, whichever is greater." This means a $200 withdrawal costs $10, but a $500 withdrawal costs $15 (3 percent). Check your card's terms or call the number on the back to find out your specific fee structure before you withdraw.
The fee is separate from interest. You owe the fee whether you pay back the cash advance in full the next day or carry it for months.
Interest rates and how they accrue on cash advances
Cash advances use a different interest rate than purchases. Your purchase APR might be 18 percent, but your cash advance APR could be 24 or 28 percent. The card issuer sets both rates independently, and the cash advance rate is almost always higher.
Interest on a cash advance starts accruing the day you withdraw the money. There is no grace period — even if you pay it back within your billing cycle, you owe interest. A $500 cash advance at 25 percent APR costs roughly $10.42 in interest for the first month, whether you pay it back on day 5 or day 30.
Interest compounds daily. The longer you carry the balance, the more you owe. After three months, that same $500 advance at 25 percent APR will have cost you roughly $31 in interest alone, on top of the initial fee.
Where you can withdraw cash and what to expect
Most credit cards come with a PIN that lets you withdraw cash at any ATM that accepts your card network (Visa, Mastercard, American Express, or Discover). You insert the card, enter your PIN, and select the withdrawal amount. The ATM dispenses cash and your card balance increases by that amount plus the fee.
You can also visit a bank branch — yours or any bank that accepts your card — and ask a teller for a cash advance. Bring your card and ID. The teller processes the withdrawal the same way an ATM does, and the fee and amount appear on your statement within one to two business days.
Some cards send cash advance checks in the mail. These are blank checks drawn on your credit card account. You write one out to yourself or to a payee, deposit it like a regular check, and the amount is added to your card balance as a cash advance. These checks carry the same fee and interest rate as ATM withdrawals.
How cash advances affect your credit utilization and payment priority
A cash advance increases your card balance, which raises your credit utilization ratio — the percentage of your credit limit you are using. If you have a $5,000 limit and a $2,000 balance, your utilization is 40 percent. A $500 cash advance brings it to 50 percent. Higher utilization can lower your credit score, even temporarily.
When you make a payment to your card, the issuer applies it according to their own rules, which are set by law. Most cards pay off purchases first, then cash advances. This means if you owe $1,000 in purchases and $500 in cash advances, and you send in $1,200, the first $1,000 goes to purchases and only $200 goes to the cash advance. The remaining $300 in cash advances keeps accruing interest at the higher rate.
Some cards reverse this and pay cash advances first. Check your card's terms or ask the issuer directly about their payment hierarchy before you take a cash advance.
Alternatives that usually cost less
A personal loan from a bank or credit union typically charges 8 to 15 percent APR with no upfront fee, making it far cheaper than a cash advance if you need to borrow for more than a few weeks. You can often get approved and funded within one to three business days.
A payday loan is expensive (often 400 percent APR or higher) but may be cheaper than a cash advance if you are borrowing a small amount for just two weeks. Do not use this as a regular strategy — the cost spirals quickly if you roll over the loan.
If you need cash to pay a bill, ask whether the biller accepts credit card payments through a payment processor. Many utilities, insurance companies, and government agencies do, and you avoid the cash advance fee entirely. The processor may charge a small fee (1 to 3 percent), but it is usually less than a cash advance fee.
Asking friends or family for a short-term loan, borrowing from your employer's paycheck advance program, or using a 0 percent balance transfer card (if you have time to apply) are all cheaper than a cash advance in most situations.
What happens if you do not pay back a cash advance
If you carry a cash advance balance month to month without paying it off, interest compounds and your balance grows. After six months of carrying a $500 cash advance at 25 percent APR, you will owe roughly $565 — the original $500 plus $20 in fees and $45 in interest.
If you miss a payment on your card, the cash advance is treated the same as any other balance. Your account goes into default, your interest rate may increase to a penalty APR (often 29.99 percent), and the missed payment is reported to the credit bureaus. Your credit score drops, and the issuer may freeze your account or pursue collection.
The cash advance does not disappear or get forgiven. It remains on your account until you pay it off or the debt is discharged in bankruptcy (a last resort that damages your credit for seven to ten years).
Frequently Asked Questions
Can I use a cash advance to pay another credit card?
Technically yes, but it is a very expensive way to move debt. You pay the cash advance fee, the higher interest rate, and no grace period on the new card. If you are trying to pay down debt, a balance transfer (moving the balance to a 0 percent card) or a personal loan is far cheaper.
Does a cash advance show up on my credit report?
The cash advance itself does not appear separately on your credit report. It is part of your card balance. However, if you miss payments or carry the balance for a long time, the missed payment or high utilization will show up and affect your score.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another and often comes with a 0 percent introductory rate. A cash advance withdraws cash and charges a higher rate immediately. Balance transfers are for moving existing debt; cash advances are for getting cash to spend.
Can I get a cash advance if my card is maxed out?
No. A cash advance counts against your credit limit. If you are at your limit, you cannot withdraw cash until you pay down the balance or your limit is increased.
How long does a cash advance take to show up on my statement?
ATM withdrawals and teller withdrawals usually appear within one to two business days. Cash advance checks may take three to five business days to process, depending on when you deposit them and your bank's processing time.