Yes, you can take cash from a credit card, but it is not the same as using the card to buy something

Most credit cards let you withdraw cash at an ATM or get cash back at a store checkout. The card issuer treats this as a cash advance — a short-term loan separate from your regular credit line. The moment you take the cash, you start paying interest on it, and that interest rate is almost always higher than your purchase rate. There is also an upfront fee, usually 3 to 5 percent of the amount you withdraw.

Because of these costs, taking cash from a credit card should be a last resort, not a convenience. If you need cash and have other options — a debit card, a bank withdrawal, a personal loan — those are almost always cheaper.

Key Takeaways

  • Cash advances charge interest from day one with no grace period, unlike purchases which may have 21 to 25 days before interest starts.
  • The cash advance fee is typically 3 to 5 percent of the amount withdrawn, charged immediately to your account.
  • The interest rate on cash advances is usually 2 to 5 percentage points higher than your purchase APR.
  • You can withdraw cash at an ATM using your PIN, or ask for cash back at a store, but both trigger the same fees and interest.

How the cash advance fee and interest rate work

When you take a cash advance, your card issuer charges you two things right away. First is the cash advance fee, which appears as a separate charge on your statement. If you withdraw $300 and the fee is 4 percent, you owe $12 immediately. Some cards cap this fee at a flat amount — for example, $10 maximum — so on a small withdrawal the flat cap may actually cost you less.

Second is the cash advance APR, which is the interest rate applied to the cash. This rate is set by your card issuer and is almost always higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 23 percent. Unlike a purchase, there is no grace period — interest starts accruing the day you withdraw the money.

The interest compounds daily. On a $300 advance at 23 percent APR, you pay roughly $1.89 per day in interest. If you pay it back in 30 days, you will owe about $57 in interest plus the original $12 fee — a total cost of $69 on a $300 withdrawal.

Where you can withdraw cash and what to expect

You have two main ways to get cash from a credit card. The first is to use an ATM. You will need your card and your PIN (personal identification number). Not all credit cards come with a PIN by default — you may need to request one from your issuer before you can use an ATM. The ATM will show you the cash advance fee before you confirm the withdrawal, so you can see the total cost upfront.

The second way is to ask for cash back at a store checkout when you make a purchase. You tell the cashier how much cash you want, they add it to your bill, and you get the cash immediately. This method also triggers the cash advance fee and interest, even though it feels like part of a regular transaction. Some stores limit how much cash back they will give — often $20 to $100 — so this works better for small amounts.

A third option exists at some banks: you can walk into a branch and ask the teller to give you a cash advance on your credit card. This is less common now, but some banks still offer it. The fee and interest are the same as an ATM withdrawal.

Why cash advances are expensive compared to other borrowing

A cash advance is one of the most expensive ways to borrow money on a credit card. To see why, compare it to a regular purchase. If you buy something for $300 on your card and pay it off in 30 days during the grace period, you pay zero interest. If you take a $300 cash advance and pay it back in 30 days, you pay roughly $57 in interest plus a $12 fee.

Even compared to other types of credit, cash advances are steep. A personal loan from a bank or credit union typically charges 8 to 15 percent APR with no upfront fee. A payday loan charges high interest but usually no upfront fee. A cash advance on a credit card combines both a high interest rate and an upfront fee, making it the worst of both worlds.

The only scenario where a cash advance might make sense is if you have an emergency, no other way to get cash, and you can pay it back within a few days. Even then, the cost adds up fast.

How to minimize the cost if you do take a cash advance

If you have no choice but to take a cash advance, there are ways to keep the damage smaller. First, withdraw only what you need. Every dollar you advance costs you the fee plus interest, so a $100 withdrawal is cheaper than a $300 one even if the fee percentage is the same.

Second, pay it back as fast as you can. The interest compounds daily, so every day you carry the balance makes it more expensive. If you can pay it back in a week instead of a month, you cut the interest cost by roughly 75 percent. Set up a payment as soon as you take the advance if you know when you will have the money.

Third, check whether your card has a lower cash advance cap or fee. Some cards designed for people rebuilding credit have a $200 or $300 cash advance limit, which protects you from taking out more than you need. Other cards waive the fee for the first cash advance in a calendar year, or cap the fee at a flat $5. These details are in your card's terms and conditions, which you can find online or by calling the number on the back of your card.

What happens if you cannot pay back the cash advance

If you do not pay back the cash advance, it becomes part of your credit card balance and you keep paying interest on it. The interest rate stays at the higher cash advance rate, not your purchase rate. This means the balance grows faster than a regular purchase would.

If you miss a payment on the card, the cash advance is treated the same as any other balance — it damages your credit score and can trigger late fees. The card issuer may also lower your credit limit or close the account. There is no special forgiveness for cash advances; they are just debt like anything else.

If you are struggling to pay back a cash advance, contact your card issuer and ask about a hardship program. Some issuers will lower your interest rate or waive fees if you explain your situation. It is worth asking, but do not count on it.

Alternatives to taking a cash advance

Before you use a credit card for cash, explore other options. If you have a debit card linked to a bank account, you can withdraw cash from any ATM for free or a small fee (usually $1 to $3). If you have a savings account, you can transfer money to checking and withdraw it. Both are much cheaper than a cash advance.

If you need to borrow money, a personal loan from a bank or credit union is usually cheaper than a cash advance. Credit unions often have lower rates and more flexible terms than banks. If you have a 401(k) or other retirement account, some plans let you borrow against your balance at a low interest rate, though there are tax consequences if you do not repay on time.

If you are in a true emergency and have no other options, a payday loan or a loan from family or friends might be worth considering, even though payday loans are expensive. At least explore those before using a credit card cash advance.

Frequently Asked Questions

Does taking a cash advance hurt my credit score?

Taking a cash advance itself does not hurt your score, but it does increase your credit utilization — the amount of your available credit you are using. If your cash advance pushes your total balance above 30 percent of your credit limit, your score may drop slightly. Paying it back quickly brings your utilization back down and your score recovers.

Can I use a credit card to withdraw cash from another person's bank account?

No. A cash advance only gives you cash from your own credit line. You cannot use someone else's account or transfer money to another person's account with a credit card cash advance. If you need to send money to someone, use a bank transfer, wire transfer, or money transfer service instead.

What is the difference between a cash advance and a balance transfer?

A cash advance gives you physical cash and charges a high fee plus interest immediately. A balance transfer moves debt from one card to another and may offer a lower interest rate for a set period. Balance transfers are for moving existing debt; cash advances are for getting cash. Both have fees, but balance transfers are usually cheaper if you are moving a large balance.

Will my credit card issuer let me take a cash advance if my account is new?

Most issuers allow cash advances on new accounts, but some restrict the amount. Your cash advance limit may be lower than your purchase limit, especially on a new card. Check your card agreement or call the issuer to find out what your cash advance limit is before you try to withdraw.

Can I get a cash advance on a secured credit card?

Yes, most secured cards allow cash advances, though the limit is often lower than on unsecured cards. The fee and interest rate are the same as any other cash advance. Since secured cards are designed to help you build credit, taking a cash advance defeats that purpose — you are paying extra to borrow money you already have in a deposit account.