Yes, you can take out cash with a credit card, but it costs more than a regular purchase
Most credit cards let you withdraw cash at an ATM or from a bank teller, but the card treats it differently than a purchase. You pay a cash advance fee (usually 3% to 5% of the amount you withdraw), and interest starts accruing immediately — there is no grace period like there is for regular purchases. The interest rate on cash advances is often higher than your regular purchase rate. For these reasons, taking out cash with a credit card should be a last resort, not a convenient way to get spending money.
The mechanics are straightforward: you use your card at an ATM, select "credit" instead of "debit," enter your PIN, and withdraw cash. But the financial cost makes it worth understanding your other options first.
Key Takeaways
- Cash advances charge a separate fee (typically 3% to 5%) plus a higher interest rate than purchases, with interest starting immediately.
- Your credit card's cash advance limit may be lower than your overall credit limit, so you cannot necessarily withdraw your full available balance.
- Interest accrues daily from the moment you withdraw, even if you pay the balance in full at the end of the month.
- Using a debit card, borrowing from a friend, or visiting your bank for a small loan are usually cheaper ways to get cash in an emergency.
How cash advances work and what fees you pay
When you take out cash with a credit card, your card issuer charges you a cash advance fee at the time of withdrawal. This fee is a percentage of the amount you withdraw — typically between 3% and 5%, though some cards charge a flat dollar amount instead (like $5 or $10) if that is higher. A $200 withdrawal with a 4% fee costs you $8 right away.
On top of the fee, you pay interest on the cash advance balance. This interest rate is usually higher than your regular purchase APR — sometimes 2% to 5% higher. Unlike purchases, which have a grace period (usually 21 to 25 days before interest kicks in), cash advances start accruing interest the day you withdraw the money. If you withdraw $200 at a 25% cash advance APR and pay it back after 30 days, you owe roughly $4.11 in interest plus the original fee.
The cash advance balance is also tracked separately from your purchase balance on your statement. This matters because if you make a payment, your card issuer applies it to whichever balance has the lowest interest rate first — usually your purchases. Your cash advance sits there accruing interest while you pay down the cheaper debt.
Your cash advance limit is separate from your credit limit
Your credit card company sets a cash advance limit that is often much lower than your overall credit limit. If your card has a $5,000 credit limit, your cash advance limit might be only $500 or $1,000. You cannot exceed this limit, even if you have available credit for purchases.
You can usually find your cash advance limit in your card's terms and conditions, on your online account dashboard, or by calling the customer service number on the back of your card. Some cards do not offer cash advances at all — particularly secured cards or cards designed for people rebuilding credit — so it is worth checking before you need the cash.
Where you can withdraw cash with a credit card
You can withdraw cash at most ATMs that display your card's logo (Visa, Mastercard, American Express, Discover). You can also visit a bank branch and ask a teller to process a cash advance — this is sometimes called an "over-the-counter" cash advance. Some banks charge an additional fee for teller-processed advances, so ask before you proceed.
ATMs are the most common route. Insert your card, select "credit" (not "debit"), enter your PIN, and choose the amount. The ATM will show you the fee before you confirm, so you can see the total cost before the transaction goes through. If the fee seems too high, you can cancel and try a different option.
Why cash advances are expensive compared to alternatives
A cash advance is one of the most expensive ways to get cash because you pay both an upfront fee and a high interest rate with no grace period. If you need $200 and use a cash advance, you might pay $8 in fees plus $4 to $5 in interest over a month — roughly 6% to 7% of the amount borrowed. Over a year, that compounds quickly.
Cheaper alternatives exist for most situations. If you have a debit card, you can withdraw cash from your own bank account for free. If you need cash in an emergency and do not have a debit card, ask a friend or family member for a short-term loan with no interest. If you need a larger amount, a personal loan from a bank or credit union usually has a lower interest rate than a credit card cash advance, even though you pay interest from day one. Some employers offer paycheck advances. A credit card purchase at a store (where you get a grace period) is almost always cheaper than a cash advance.
How a cash advance affects your credit score
Taking out a cash advance does not directly hurt your credit score, but it can indirectly damage it in two ways. First, it increases your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 limit and a $500 cash advance limit, and you withdraw $400, you have used 80% of your cash advance limit. High utilization (above 30%) can lower your score slightly.
Second, if you carry the cash advance balance and pay interest on it, you are adding to your overall credit card debt. This increases your total utilization and can lower your score further. The damage is usually temporary — your score recovers as you pay down the balance — but it is another reason to treat cash advances as a last resort.
How to avoid needing a cash advance
The best strategy is to plan ahead so you do not need one. Keep a small amount of cash at home for emergencies. Use your debit card for everyday cash withdrawals from your own account. If you are rebuilding credit and do not have a debit card yet, ask your bank about opening a basic checking account — most banks offer them with minimal fees and no credit check.
If you find yourself regularly needing cash advances, that is a sign your budget needs attention. You may be spending more than you earn, or you may not have an emergency fund. Both are fixable with planning, but they take time. In the meantime, a personal loan or credit union loan is cheaper than a credit card cash advance.
Frequently Asked Questions
Can I use a credit card to withdraw cash from my bank's ATM?
Yes, if your bank accepts your card's network (Visa, Mastercard, etc.). Insert the card, select "credit," and enter your PIN. You will pay the cash advance fee and interest, even though it is your own bank. Using your debit card at the same ATM is free.
What happens if I do not pay back a cash advance?
The balance stays on your credit card and accrues interest at your cash advance rate. If you do not pay it, the debt can go to collections, damage your credit score, and result in a lawsuit. Treat it like any other credit card debt — pay at least the minimum on time.
Is there a way to avoid the cash advance fee?
No — the fee is charged at the time of withdrawal and cannot be waived. Your only option is to use a different method to get cash, like a debit card, a personal loan, or borrowing from someone else.
Can I take out a cash advance if I am behind on my payments?
It depends on your card issuer. If your account is in good standing, you can usually withdraw up to your cash advance limit. If you are behind on payments, your issuer may freeze your account and block cash advances. Call your card's customer service to check your status.
Does a cash advance count toward my credit limit?
Yes. If you have a $5,000 credit limit and withdraw $400 as a cash advance, you have $4,600 left to spend on purchases. The cash advance uses up part of your overall available credit.