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 money from your credit card account, taken as physical cash or transferred to your bank account. Your card issuer treats it as a loan against your available credit, separate from regular purchases. You can get cash at an ATM using your card's PIN, at a bank teller's window, or through a cash advance check mailed by your issuer.
The catch is that cash advances cost more than purchases. You pay an upfront fee (usually 3 to 5 percent of the amount withdrawn), a higher interest rate than your purchase rate, and interest starts accruing immediately—there is no grace period like there is for purchases. If you carry a balance, the cash advance sits in a separate bucket and may be charged interest faster than your regular purchases are.
Most people use cash advances only when they have no other option: an emergency that requires cash, a vendor who will not take a card, or a situation where a debit card is not available. For routine cash needs, a debit card or ATM withdrawal from your bank account is almost always cheaper.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent and a higher interest rate than purchases, with interest starting immediately.
- You can withdraw cash at an ATM, a bank teller, or through a cash advance check, but each method has different limits and fees.
- Interest on a cash advance is calculated separately from purchases and may be charged at a faster rate if you carry a balance.
- Your credit card statement will show the cash advance as a separate line item, distinct from your regular purchases.
How the cash advance fee and interest rate work
The cash advance fee is charged the moment you withdraw the money. It appears on your statement as a separate charge and is calculated as a percentage of the amount withdrawn. A $300 cash advance with a 4 percent fee costs $12 immediately. This fee is not negotiable and does not count toward your minimum payment—it is added to your balance.
The cash advance interest rate is typically 2 to 5 percentage points higher than your purchase APR. If your card charges 18 percent on purchases, the cash advance rate might be 23 percent. This rate is set by your issuer and is listed in your card's terms and conditions (usually in the disclosure document you received when you opened the account or can find on your issuer's website).
Interest on a cash advance begins accruing on the day you withdraw it. Unlike purchases, which have a grace period (usually 21 to 25 days before interest starts), cash advances have no grace period. If you withdraw $300 on the 1st and pay it back on the 15th, you still owe interest for all 15 days.
If you carry a balance on your card, your issuer applies your payment to the lowest-interest debt first—usually purchases—which means your cash advance balance sits and accrues interest longer. Check your card's terms to confirm the payment order; some issuers use a different method.
Where you can withdraw cash and what each method costs
You have three main ways to get cash from a credit card: ATM withdrawal, bank teller withdrawal, or cash advance check.
ATM withdrawal: You use your card's PIN at any ATM, just like a debit card. Most issuers charge an ATM fee (often $2 to $5 per transaction) in addition to the cash advance fee. Some ATMs also charge their own fee (another $2 to $3). Your issuer may set a daily limit on how much you can withdraw (often $500 to $1,000), and there may be a monthly limit as well. Check your card's terms or call the number on the back to find out your limits.
Bank teller withdrawal: You can walk into a bank branch (your issuer's bank or sometimes any bank) and ask for a cash advance. The teller will charge the cash advance fee but may not charge an additional ATM fee. Some banks require you to have an account with them; others will serve you if you have a card from their issuer. Call ahead to confirm the bank's policy and your withdrawal limit.
Cash advance check: Your issuer may mail you checks that draw against your credit line. You write the check to yourself, deposit it in your bank account, and the amount is added to your credit card balance. These checks usually carry the same cash advance fee and interest rate as ATM withdrawals, but they may have a different limit. Read the fine print on the check or the letter that came with it.
How a cash advance appears on your statement and affects your balance
Your credit card statement breaks down transactions by type. You will see a line for "Purchases," another for "Cash Advances," and separate lines for fees and interest on each. The cash advance fee appears as a separate charge, and the interest accrues daily and is added to your balance each month.
A cash advance counts against your available credit immediately. If your card has a $5,000 limit and you withdraw $500 in cash, your available credit drops to $4,500 right away. The fee and interest are added to your balance over time, so your total debt grows even if you do not withdraw more cash.
Your credit utilization ratio—the amount of credit you are using compared to your total limit—includes the cash advance. A $500 cash advance on a $5,000 limit raises your utilization to 10 percent. High utilization can lower your credit score, so a large cash advance may hurt your score temporarily.
What happens if you carry a cash advance balance month to month
If you do not pay off the cash advance in full by your statement due date, the balance rolls into the next month and interest continues to accrue daily. Your issuer calculates interest using the average daily balance method: they add up your balance for each day of the billing cycle, divide by the number of days, and multiply by your daily interest rate (your APR divided by 365).
Because cash advances have no grace period, interest starts on day one. A $500 cash advance at 23 percent APR costs about $9.58 in interest for the first month if you do not pay it down. That number grows if you carry the balance longer or add more cash advances.
If you have both purchases and a cash advance balance, your payment goes to the lowest-interest debt first (purchases), so the cash advance sits and accrues interest while you pay down the cheaper debt. This is why carrying a cash advance balance is expensive: you are paying a high rate on money that sits unpaid while you chip away at lower-rate debt.
Alternatives to a cash advance
Before you take a cash advance, consider these options:
Debit card or ATM withdrawal: If you have a bank account, withdraw cash from your own money. There is no fee (unless your bank charges for out-of-network ATM use) and no interest.
Personal loan: If you need a larger amount, a personal loan from a bank or credit union often has a lower interest rate than a cash advance. The application takes a few days, but the rate is fixed and predictable.
Payday loan or line of credit: These are expensive and should be a last resort, but they may be cheaper than a cash advance if you pay them back quickly. Read the terms carefully—some payday loans charge rates higher than credit card cash advances.
Ask for a payment plan: If you owe money to a vendor or service provider, ask if they offer a payment plan. Many will work with you rather than demand cash upfront.
Borrow from family or friends: If possible, this is usually the cheapest option. Agree on repayment terms in writing to avoid misunderstandings.
How a cash advance affects your credit score
A cash advance does not appear as a separate item on your credit report, but it affects your score in two ways: through your credit utilization ratio and through your payment history.
Your utilization ratio is the percentage of your available credit you are using. A cash advance counts toward this ratio. If you normally use 20 percent of your credit and take a $500 cash advance on a $5,000 limit, your utilization jumps to 30 percent. Credit scoring models penalize high utilization, so your score may drop by a few points temporarily. Once you pay off the cash advance, your utilization drops and your score recovers.
If you miss a payment on your cash advance, it is reported as a late payment on your credit report and will damage your score. A single late payment can lower your score by 100 points or more, depending on your credit history. This is why it is critical to pay at least the minimum payment on time, even if you cannot pay off the full balance.
Frequently Asked Questions
What is the difference between a cash advance and a balance transfer?
A cash advance is a withdrawal of cash from your credit line. A balance transfer is a transfer of debt from one card to another. Cash advances charge a fee and a high interest rate immediately. Balance transfers often have a lower introductory rate (sometimes 0 percent) for a set period, but charge a fee upfront. Both are expensive, but a balance transfer is usually cheaper if you are moving existing debt.
Can I take a cash advance if I have a zero balance?
Yes. A cash advance draws from your available credit, not from a balance you already owe. You can take a cash advance on a card with zero balance, and the fee and interest will be added to your new balance immediately.
Will my issuer let me know my cash advance limit before I try to withdraw?
Your cash advance limit may be lower than your total credit limit. Call the number on the back of your card or log into your online account to find out your limit. Some issuers show this in your account details; others require you to call.
What happens if I take a cash advance and then lose my job?
You are still responsible for paying back the cash advance plus interest and fees. If you cannot pay, contact your issuer and ask about hardship options. Some issuers offer temporary payment reductions or interest rate reductions for customers in financial difficulty, though these are not may provide.
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a bad idea. You are borrowing at a high rate (the cash advance rate) to pay off debt at a lower rate (your other card's purchase rate). You end up paying more interest overall. If you need to move debt between cards, a balance transfer is cheaper.