You can pull money off 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 get cash in hand — from an ATM, a bank teller, or a convenience store — and the amount borrowed shows up on your credit card bill just like a purchase would. The card issuer treats it as a loan against your available credit, not as a transaction.
The catch is that cash advances cost more than regular purchases. You pay an upfront fee (usually 3 to 5 percent of the amount withdrawn), and interest starts accruing immediately — there is no grace period like there is for purchases. If you carry a balance, the interest rate on the cash advance is often higher than the rate on purchases, and it compounds daily.
You can only withdraw up to your cash advance limit, which is typically lower than your total credit limit. A card with a $5,000 credit limit might have a $1,500 cash advance limit. Your issuer sets this limit and may not tell you what it is until you try to withdraw.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent plus a higher interest rate than purchases, with interest starting immediately.
- Your cash advance limit is separate from and usually much lower than your total credit limit.
- You can withdraw cash from an ATM, bank branch, or convenience store using your credit card PIN.
- Interest on a cash advance accrues daily and is often charged at a rate 5 to 10 percentage points higher than your purchase APR.
- Paying off a cash advance should be your priority because the cost compounds faster than any other type of credit card debt.
Where and how to withdraw cash from your credit card
You have three main routes: an ATM, a bank branch, or a convenience store. At an ATM, insert your card, enter your PIN, select "cash advance" or "withdrawal," and choose the amount. The machine will show you the fee before you confirm. At a bank branch (yours or another bank), you can ask a teller for a cash advance and show your ID. At some convenience stores and grocery stores, you can ask the cashier to process a cash advance, though not all locations offer this.
Each method charges a fee. The ATM fee comes from your card issuer (the 3 to 5 percent mentioned above), but some ATMs also charge an additional operator fee of $2 to $5 on top of that. A bank teller will charge the issuer fee but not an ATM operator fee. A convenience store cashier will charge the issuer fee and may add a small transaction fee as well.
You need your PIN to use an ATM or convenience store. If you do not have one, call your card issuer and request it before you try to withdraw. Some issuers mail it; others provide it over the phone or through your online account.
The fees and interest that apply to cash advances
A cash advance fee is charged once, upfront, when you withdraw the money. It is calculated as a percentage of the amount withdrawn — typically 3 to 5 percent, though some cards charge a flat fee instead (for example, $10 minimum). A $500 cash advance at 4 percent costs $20 in fees alone before any interest accrues.
Interest begins accruing the day you withdraw the cash. Unlike purchases, which have a grace period (usually 21 to 25 days before interest kicks in), a cash advance has no grace period. The interest rate is your cash advance APR, which is often 5 to 10 percentage points higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 26 percent.
Interest compounds daily, meaning each day's interest is added to the balance, and the next day's interest is calculated on the new, larger balance. On a $500 cash advance at 26 percent APR, you owe about $3.56 in interest on day one. By day 30, you owe roughly $110 in total interest if you have not paid anything down. The longer you carry the balance, the faster it grows.
How a cash advance affects your credit score and account
A cash advance counts as a new balance on your credit card, which raises your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 limit and a $500 cash advance, your utilization jumps to 10 percent. Higher utilization can lower your credit score, even if you pay the advance off quickly.
The cash advance also shows up on your credit report as a separate line item on your card account, visible to lenders and creditors. It signals that you withdrew cash rather than made a purchase, which some lenders view as a sign of financial stress. This does not prevent you from borrowing elsewhere, but it may affect how lenders view your application.
Your payment history matters too. If you miss a payment on the cash advance, it is treated like any other missed payment on your card — it can damage your score and trigger late fees and penalty interest rates. The cash advance balance does not disappear; it stays on your account until you pay it off.
When to pay off a cash advance and how payments are applied
Pay off a cash advance as soon as you can. Because the interest rate is high and accrues immediately, carrying a balance costs you money every single day. A $500 advance at 26 percent APR costs you roughly $3.56 per day in interest alone — that is $25 per week.
When you make a payment to your credit card, the issuer applies it according to their own rules, which they set and disclose in your cardholder agreement. Most issuers apply payments to the balance with the highest interest rate first — so a payment goes to the cash advance before it goes to purchases. However, some issuers apply payments equally across all balances, or in the order the balances were created. Check your cardholder agreement or call your issuer to confirm their method.
If you have both a purchase balance and a cash advance balance, making a large payment ensures the cash advance gets paid down faster. If you make only the minimum payment, it may cover interest and fees but barely touch the principal, leaving the balance to grow.
Alternatives to taking a cash advance
If you need cash, a cash advance should be your last resort because of the fees and interest. A personal loan from a bank or credit union typically charges lower interest and has no upfront fee. A payday loan is faster but often more expensive than a cash advance. Borrowing from a friend or family member costs nothing if they agree. Selling something you own, asking your employer for an advance on your paycheck, or negotiating a payment plan with a creditor are all cheaper than a cash advance.
If you are in a cycle of taking cash advances regularly, that is a sign you are spending more than you earn. A budget, a debt management plan, or a conversation with a nonprofit credit counselor can help you break the pattern before the debt grows.
Frequently Asked Questions
Can I use a credit card to withdraw cash at any ATM?
You can use most ATMs, but not all. Machines in your card issuer's network are usually free (except for the cash advance fee itself). ATMs outside the network charge an operator fee on top of the issuer fee. Some ATMs will not accept credit cards at all — they only accept debit cards. Check the screen before you insert your card; it will tell you whether the machine accepts credit cards and what the fee is.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you actual cash and charges a high fee and interest rate. A balance transfer moves debt from one card to another (usually to a card with a lower rate) and does not give you cash. Balance transfers are for paying off other debts; cash advances are for getting money in hand.
Will taking a cash advance hurt my credit score?
Yes, it can. A cash advance raises your credit utilization ratio, which can lower your score immediately. It also signals financial stress to lenders. The damage is usually temporary — your score recovers as you pay the balance down — but it is real and happens right away.
Do I have to pay back a cash advance if I close the card?
Yes. Closing the card does not erase the debt. You still owe the cash advance balance plus any interest that has accrued. The issuer will send you bills and may pursue collection if you do not pay. The debt can also be reported to credit bureaus and damage your score.
Can I get a cash advance on a secured credit card?
Most secured cards allow cash advances, but the limit is often very low — sometimes just a few hundred dollars even if your total credit limit is higher. Check your cardholder agreement or call your issuer to confirm whether your card allows cash advances and what the limit is.