Yes, you can take cash from a credit card, but it costs more than a purchase and starts charging interest immediately
You can withdraw cash from a credit card at an ATM, bank teller, or through a cash advance at a store. The card issuer treats this as a cash advance — a separate transaction from a purchase. The moment you take the cash, you begin paying interest on it. Unlike a purchase, which may have a grace period before interest kicks in, a cash advance charges interest from day one, with no grace period at all.
The cost of a cash advance is higher than a regular purchase in three ways: a one-time fee (usually 3 to 5 percent of the amount), a higher interest rate (often 2 to 3 percentage points above your regular APR), and immediate interest accrual. If you need cash urgently, this is an option. But it is expensive, and there are usually cheaper ways to get money.
Key Takeaways
- Cash advances charge interest from the moment you withdraw the money, with no grace period like purchases have.
- You pay both an upfront fee (typically 3 to 5 percent) and a higher interest rate than your regular purchase APR.
- You can get a cash advance at an ATM using your PIN, at a bank teller with your card, or sometimes at a store checkout.
- The total cost of a cash advance makes it one of the most expensive ways to borrow money on a credit card.
- Alternatives like a personal loan, payday loan, or borrowing from family are often cheaper, even if they seem less convenient.
How to take a cash advance from your credit card
There are three main ways to get cash from a credit card. The easiest is to use an ATM: insert your card, enter your PIN (which you may need to set up first with your issuer), and withdraw cash up to your daily limit. Your card issuer sets this limit separately from your credit limit — it is often lower, sometimes $500 or less per day.
You can also visit a bank branch and ask a teller for a cash advance. Bring your card and a photo ID. The teller will process it like a withdrawal, though some banks charge an extra fee for this service on top of the cash advance fee itself.
A third option, less common now, is to ask a store cashier for a cash advance at checkout. Not all stores offer this, and those that do may charge an additional fee. Ask before you attempt it.
The fees and interest you will pay
A cash advance fee is usually charged as a percentage of the amount you withdraw — typically 3 to 5 percent. If you withdraw $500, you might pay $15 to $25 in fees alone. Some card issuers set a flat minimum fee (like $5) or a maximum fee (like $100), so the percentage may not apply to very small or very large withdrawals.
The interest rate on a cash advance is almost always higher than your regular purchase APR. While a purchase might carry an APR of 18 percent, a cash advance on the same card might be 22 or 25 percent. This higher rate applies only to the cash advance balance, not to purchases you make on the same card.
Interest on a cash advance begins accruing immediately — there is no grace period. If you take out $500 at a 24 percent APR, you are paying roughly $10 per month in interest alone, even if you make no other charges. The longer you carry the balance, the more you pay.
How a cash advance affects your credit
A cash advance shows up on your credit report as a separate transaction, but it counts toward your overall credit utilization — the percentage of your total credit limit you are using. If your card has a $5,000 limit and you take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization can lower your credit score, even if you pay the cash advance back quickly.
The cash advance itself does not hurt your score directly. What matters is whether you pay it back on time. A late payment on a cash advance will damage your score just as much as a late payment on a purchase.
Why a cash advance is expensive compared to other borrowing
To understand the true cost, compare a $500 cash advance to other ways of borrowing $500. A cash advance at 24 percent APR with a 5 percent fee costs you $25 upfront plus roughly $10 in interest per month if you pay it back in 30 days. Over six months, you would pay roughly $75 in interest alone.
A personal loan from a bank or credit union, by contrast, might charge 10 to 15 percent APR with no upfront fee. The same $500 over six months would cost roughly $15 to $25 in interest. A payday loan is often more expensive than a cash advance, but a personal loan, a line of credit from a bank, or even a 0 percent promotional offer on a different credit card are usually cheaper.
Borrowing from family or friends, if that is an option, costs nothing. If you have a savings account, using your own money costs nothing and avoids debt entirely.
When a cash advance might make sense
A cash advance is most useful when you need cash urgently and have no other option. Examples: a business that accepts only cash, an emergency where you cannot use a card, or a situation where you need physical money and have no access to your bank account.
Even in these cases, ask yourself whether you truly need the cash or whether you are using it as a substitute for a budget problem. If you are regularly taking cash advances to cover expenses, that is a sign you are spending more than you earn. A cash advance will make that problem worse, not better, because you are now paying interest on top of the original expense.
If you do take a cash advance, pay it back as fast as you can. Every dollar you pay toward the balance reduces the interest you owe going forward.
How to avoid needing a cash advance
The best way to avoid cash advances is to keep a small emergency fund — even $500 to $1,000 — in a savings account. This gives you a buffer for unexpected expenses without forcing you to borrow at high interest rates.
If you do not have savings yet, start small. Set aside even $25 per paycheck until you have enough to cover a small emergency. This takes time, but it is cheaper than paying cash advance fees and interest.
You can also reduce the temptation to take a cash advance by using a debit card for cash withdrawals instead of a credit card. A debit card withdrawal costs nothing (unless your bank charges ATM fees), and it does not create debt. If you do not have a debit card or bank account, opening one is usually free and takes less than an hour.
Frequently Asked Questions
Can I take a cash advance if I have not set up a PIN?
No, you need a PIN to use an ATM. Contact your card issuer to set one up — this usually takes a few minutes by phone or through their website. Once you have a PIN, you can withdraw cash at any ATM that accepts your card brand.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges high fees and interest immediately. A balance transfer moves debt from one card to another, usually with a lower introductory rate. Balance transfers are for moving existing debt; cash advances are for getting new cash.
Will taking a cash advance hurt my credit score?
A cash advance itself does not hurt your score, but it increases your credit utilization, which can lower your score temporarily. Late payments on a cash advance will damage your score. Paying it back on time and in full will restore your score over time.
Can I take a cash advance from a credit card I just opened?
Usually yes, but some new card issuers limit cash advances in the first 30 days. Check your card agreement or call the issuer to confirm. Even if you can take a cash advance immediately, the fees and interest make it an expensive choice.
What happens if I cannot pay back a cash advance?
If you miss a payment, the issuer will charge a late fee and your interest rate may increase. The unpaid balance will accrue interest every month. Over time, this can grow into a large debt. If the debt goes unpaid for long enough, the issuer may close your account or send it to a collection agency.