Yes, you can take money out of a credit card, but it is not the same as using it to buy something

Taking money out of a credit card is called a cash advance. You go to an ATM, a bank teller, or a check-cashing service and withdraw cash using your credit card instead of a debit card. The money comes from your credit line, not from a bank account. You owe it back to the credit card company, just like a purchase.

The catch: cash advances cost significantly more than regular purchases. You pay an upfront fee (usually 3 to 5 percent of the amount you withdraw), a higher interest rate than your regular purchase rate, and interest starts accruing immediately — there is no grace period like there is for purchases. A $500 cash advance at a 5 percent fee costs $25 right away, plus interest from day one.

Most people use cash advances only when they have no other option: paying a contractor who takes cash only, covering an emergency when their bank account is empty, or getting cash in a place where cards are not accepted. It is rarely the cheapest way to get cash.

Key Takeaways

  • A cash advance lets you withdraw cash from your credit card at an ATM or bank, but you pay a fee (typically 3 to 5 percent) plus a higher interest rate than purchases.
  • Interest on a cash advance starts immediately, with no grace period, so the longer you carry the balance, the more you pay.
  • You can find your cash advance limit, fee, and interest rate in your card's terms document or by calling the card issuer.
  • Alternatives like a personal loan, borrowing from family, or using a debit card are usually cheaper than a cash advance.

Where and how to take a cash advance

You have three main routes to get cash from your credit card. An ATM is the fastest: insert your card, enter your PIN (which you may need to set up first if you have never done a cash advance), and withdraw up to your cash advance limit. Most ATMs charge an additional fee of $2 to $5 on top of your card issuer's fee.

A bank teller at your card issuer's bank or branch can also process a cash advance. You hand over your card and ID, tell them the amount, and they give you cash. There is usually no extra ATM fee this way, but you are limited to business hours and branch locations.

A check-cashing service or money transfer business (like Western Union or MoneyGram) can also process a cash advance, though they charge their own fees on top of your card's fees. This route is most useful if you need the cash in a specific format or location, but it is the most expensive option.

Fees and interest rates for cash advances

Every credit card has a separate cash advance fee and a separate cash advance interest rate, both usually higher than what you pay for purchases. The fee is a percentage of the amount you withdraw — typically 3 to 5 percent, with a minimum of $5 to $10. A $200 cash advance at 5 percent costs $10 in fees; a $1,000 advance costs $50.

The interest rate for cash advances is often 5 to 10 percentage points higher than your regular purchase rate. If your card charges 18 percent APR on purchases, the cash advance rate might be 25 or 28 percent APR. This rate applies from the moment you withdraw the cash — there is no 21-day grace period like there is for purchases.

Interest compounds daily. A $500 cash advance at 25 percent APR costs about $3.42 per day in interest. If you pay it back in 30 days, you owe roughly $102.50 in fees and interest combined. If you carry it for 90 days, you owe roughly $310 in fees and interest.

Finding your cash advance limit and terms

Your cash advance limit is separate from your regular credit limit and is usually lower. You might have a $5,000 credit limit but only a $1,000 cash advance limit. Some cards do not offer cash advances at all.

To find your cash advance limit, fee, and interest rate, check your card's Schumer Box — the table of terms and fees that appears in your card agreement or on the issuer's website. Look for the rows labeled "Cash Advance Fee" and "Cash Advance APR." You can also call the customer service number on the back of your card and ask directly.

Write down all three numbers: your limit, your fee percentage, and your interest rate. Then you can calculate the true cost before you withdraw. A $300 cash advance with a 5 percent fee ($15) at 25 percent APR costs $15 upfront plus roughly $6.25 per month in interest if you pay it back over 30 days.

Why cash advances are expensive compared to other borrowing

A cash advance is almost always more expensive than other ways to get cash. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee, and interest does not start until you receive the money. A $500 personal loan at 15 percent APR costs roughly $37.50 in interest over 30 days — less than half what a cash advance costs.

A balance transfer to a 0 percent promotional card (if you have one available) costs only the balance transfer fee (usually 3 to 5 percent) and no interest for 6 to 21 months, depending on the card. This works if you need to move money between accounts, not if you need physical cash.

Borrowing from family or friends costs nothing if they agree. Using a debit card to withdraw from your own bank account costs nothing at all. Even a payday loan, which is expensive, is sometimes cheaper than a cash advance if you pay it back within two weeks.

How to pay back a cash advance

A cash advance payment goes toward your credit card balance just like a regular payment. When you make a payment to your card, the issuer typically applies it first to your lowest-interest debt (usually purchases), then to higher-interest debt (like cash advances). This means if you have both a purchase balance and a cash advance balance, your payment reduces the purchase balance first, and the cash advance keeps accruing interest.

To pay off a cash advance faster, call your card issuer and ask if you can direct your payment specifically to the cash advance balance. Some issuers allow this; others do not. If yours does not, you will need to pay off your entire card balance to stop the cash advance interest.

The fastest way to minimize cost is to pay the cash advance back as soon as possible. Every day you carry it, interest accrues at a high rate. If you can pay it back within a week, the total cost is manageable. If you are carrying it for months, the interest alone can exceed the original amount you withdrew.

When a cash advance might make sense

A cash advance is worth considering only in specific situations. You need cash immediately and have no other source (your bank account is empty, you cannot get a personal loan in time, and no one can lend you money). The amount is small enough that the fees and interest are tolerable — say, under $300. You can pay it back within days or weeks, not months.

Example: You are traveling and your debit card stops working. You need $200 in cash to pay for a hotel. A cash advance costs $10 to $15 in fees plus a few dollars in interest if you pay it back when you get home. That is annoying but manageable. Contrast that with needing $500 for rent because your paycheck is late — if you carry that for a month, you pay $50 to $75 in fees and interest, which is a much bigger hit.

If you are considering a cash advance for anything other than a genuine emergency, pause and explore the alternatives first. A personal loan, a payment plan with the person you owe money to, or even a credit card with a 0 percent promotional rate will almost always cost less.

Frequently Asked Questions

Does taking a cash advance hurt my credit score?

A cash advance itself does not hurt your score, but carrying a high balance does. If your cash advance pushes your total credit card balance above 30 percent of your credit limit, your credit utilization ratio goes up and your score may drop. Paying it off quickly keeps this from happening.

Can I use a credit card to withdraw cash from my bank account?

No. A cash advance withdraws from your credit line, not from a bank account. If you want to move money from a bank account to cash, use your debit card or visit a bank teller. If you want to move money from a credit card to a bank account, that is a balance transfer, which has its own fees.

What if I do not know my PIN for cash advances?

Call your card issuer's customer service number (on the back of your card) and ask them to set up a PIN or reset your existing one. They can usually do this over the phone. You will need your PIN to use an ATM, but a bank teller can process a cash advance without one.

Can I take a cash advance if my card is maxed out?

No. Your cash advance limit is separate from your regular credit limit, but you cannot exceed your total credit limit. If you have used your entire credit limit, you cannot take a cash advance until you pay down your balance.

Is there a way to avoid the cash advance fee?

No. Every cash advance incurs a fee set by your card issuer — you cannot negotiate it away. The only way to avoid the fee is to not take a cash advance. Using a debit card, personal loan, or borrowing from someone else avoids the fee entirely.