You can take cash out of your credit card, but it works differently from a debit card withdrawal and costs more
A cash advance is when you use your credit card to withdraw money from an ATM or get cash back at a bank or store. Unlike a debit card, the money comes from your credit card's line of credit, not a bank account. You are borrowing money that you will have to repay with interest.
The catch: cash advances charge higher fees and interest rates than regular purchases. Most cards charge a cash advance fee (usually 3% to 5% of the amount withdrawn, with a minimum of $5 to $10) plus a higher interest rate that starts accruing immediately — often 2% to 3% higher than your regular purchase APR. There is no grace period like there is for purchases. Interest starts the day you withdraw the cash.
You should only use a cash advance if you have no other option, because the cost adds up quickly. A $500 cash advance with a 5% fee ($25) plus a 25% APR will cost you roughly $104 in interest and fees over a year if you only make minimum payments.
Key Takeaways
- Cash advances charge a separate fee (typically 3% to 5%) plus a higher interest rate than purchases, with no grace period.
- Interest on a cash advance starts immediately and accrues daily, making it expensive to carry a balance.
- You can withdraw cash at ATMs, banks, or some retail locations using your credit card PIN.
- Your credit card issuer sets a cash advance limit, which may be lower than your total credit limit.
- Paying back a cash advance should be your priority because the interest rate is significantly higher than other forms of credit card debt.
Where you can actually get cash from your credit card
You have three main options. The most common is an ATM — you insert your card, enter your PIN, and withdraw cash up to your daily limit. Most ATMs charge their own fee on top of your card's cash advance fee, usually $2 to $3.
You can also go to a bank branch, even if it is not your bank. Tell the teller you want a cash advance on your credit card. They will process it like a transaction and hand you cash. No ATM fee applies, but your card's cash advance fee still does.
Some retail stores offer cash back when you make a purchase with your credit card, though this is less common than it used to be. You buy something small and ask for cash back. This still counts as a cash advance and carries the same fees and interest rate.
How much you can withdraw and what limits apply
Your card issuer sets a cash advance limit that is separate from your regular credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your cardholder agreement or log into your account online to see your specific limit.
Most cards also set a daily ATM withdrawal limit, often $500 to $1,000 per day. If you need more than that, you will have to make multiple withdrawals over several days, and each one triggers a separate cash advance fee.
Your cash advance limit counts against your total available credit. If you withdraw $1,000 in cash, you have $1,000 less to spend on regular purchases.
The fees and interest you will pay
Cash advance fees are charged upfront and appear on your statement immediately. A typical fee structure looks like this: 5% of the amount withdrawn, with a minimum of $10. So a $200 withdrawal costs $10 (the minimum), and a $500 withdrawal costs $25 (5% of $500).
The interest rate is where the real cost lives. While a regular purchase might carry a 15% to 22% APR, a cash advance often runs 22% to 29% or higher. This rate applies only to the cash advance balance, not your other purchases. Interest accrues daily starting the moment you withdraw the cash.
Here is a concrete example: you withdraw $500 with a 5% fee ($25) and a 25% APR. After one month of no payments, you owe roughly $535 ($500 + $25 fee + $10 in interest). After six months, you owe about $575. After a year, you owe roughly $630. That is $130 in fees and interest on a $500 withdrawal.
How cash advances affect your credit score
A cash advance itself does not appear separately on your credit report — it shows up as part of your credit card balance. However, it can hurt your credit score in two ways.
First, it increases your credit utilization ratio, which is the percentage of your available credit you are using. If you have a $5,000 limit and withdraw $1,000 in cash, your utilization jumps to 20%. High utilization (above 30%) signals risk to lenders and can lower your score by 10 to 50 points depending on your overall profile.
Second, if you cannot pay back the cash advance quickly and carry a balance, the high interest rate means your balance grows faster. This makes it harder to pay down, which keeps your utilization high and damages your score over time.
When a cash advance makes sense and when it does not
A cash advance is rarely the right choice, but there are narrow situations where it might be your only option. If you have a genuine emergency that requires cash and you have no access to an ATM card, no savings, and no other borrowing options, a short-term cash advance is better than nothing. The key is to pay it back as fast as possible — ideally within a month or two.
Do not use a cash advance for everyday expenses or to fund a purchase you could make with the card itself. The fees and interest make it far more expensive than a regular purchase. If you are considering a cash advance to cover a shortfall in your budget, that is a sign you need to address your spending or income, not borrow at a high rate.
Alternatives to consider: ask for a short-term loan from family or friends, look into a personal loan from a bank or credit union (which usually has a lower rate than a cash advance), or see if your employer offers paycheck advances. All of these are cheaper than a credit card cash advance.
How to pay back a cash advance quickly
When you make a payment on your credit card, the payment goes toward your lowest-interest debt first. This means if you have both regular purchases and a cash advance balance, your payment covers the purchase balance before it touches the cash advance. To pay off the cash advance faster, contact your card issuer and ask them to apply your payment directly to the cash advance balance, or pay enough to cover both balances plus extra.
The faster you pay it back, the less interest you pay. A $500 cash advance paid back in full within 30 days costs roughly $35 in fees and interest. The same advance carried for six months costs roughly $75. Paid over a year, it costs roughly $130. The difference is dramatic.
Set up a plan to repay the cash advance before you withdraw it. If you need $500 and can pay it back in two months, that is manageable. If you have no clear repayment plan, do not withdraw the cash.
Frequently Asked Questions
Does a cash advance show up differently on my credit report than a regular purchase?
No, it does not appear as a separate line item. It is part of your total credit card balance. However, the higher interest rate means it grows faster if you carry a balance, which can damage your score over time.
Can I get a cash advance from a credit card that has 0% APR on purchases?
No. The 0% promotional rate applies only to purchases. Cash advances are charged the regular cash advance APR from day one, even if your card has a 0% purchase offer.
What happens if I hit my cash advance limit?
The ATM or teller will decline the transaction. You cannot withdraw more than your cash advance limit allows. You would have to pay down the existing cash advance balance first or use a different payment method.
Is there a way to avoid the cash advance fee?
No. Every credit card that offers cash advances charges a fee for them. The fee is set by your card issuer and applies every time you withdraw cash. There is no workaround.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You would pay the cash advance fee plus the higher interest rate on top of debt you are trying to pay off. A balance transfer (moving debt from one card to another) is cheaper if your new card offers a 0% balance transfer rate.