Yes, you can withdraw cash from a credit card, but it works differently than a debit card and costs more

You can take cash out of an ATM using your credit card, but the transaction is treated as a cash advance, not a regular purchase. The moment you withdraw the money, your credit card issuer charges you a fee — usually 3% to 5% of the amount withdrawn — and begins charging interest on that balance immediately. Unlike purchases, which often have a grace period before interest kicks in, cash advances start accruing interest the same day you take the money out, with no grace period at all.

The interest rate on cash advances is also typically higher than your regular purchase APR. If your card charges 18% APR on purchases, the cash advance rate might be 22% or 25%. This combination of an upfront fee plus higher interest makes withdrawing cash from a credit card one of the most expensive ways to get cash.

Key Takeaways

  • Cash advances charge a fee (usually 3% to 5% of the amount) and a higher interest rate than purchases, with interest starting immediately.
  • You can withdraw cash at most ATMs using your credit card, but you need to know your PIN and your card's cash advance limit, which may be lower than your credit limit.
  • Interest on cash advances accrues daily and compounds, so the longer you carry the balance, the more you pay in total.
  • Payments to your credit card go toward the lowest-interest balance first, so cash advance debt may sit unpaid while you pay off purchases.

How to withdraw cash and what happens at the ATM

To withdraw cash, insert your credit card into an ATM that accepts credit cards (most do), enter your PIN, select "cash advance" or "withdraw cash," and choose the amount. The ATM will dispense the cash and print a receipt showing the transaction as a cash advance, not a withdrawal.

Your card issuer sets a cash advance limit that is separate from your credit limit. If your credit limit is $5,000, your cash advance limit might be $1,500 or $2,000. You cannot withdraw more than this limit, even if you have available credit. You can call your card issuer or log into your online account to find out what your cash advance limit is.

The ATM may also charge you a fee on top of the card issuer's fee. If you use an out-of-network ATM (one that does not belong to your card's bank), you might pay $2 to $3 just to the ATM operator, plus the 3% to 5% fee from your card issuer. Using an in-network ATM eliminates the ATM operator's fee but not the card issuer's fee.

Fees and interest charges on cash advances

The cash advance fee is charged immediately and added to your balance. If you withdraw $500 and the fee is 4%, you owe $520 right away. This fee appears on your statement as a separate line item labeled "cash advance fee" or "advance fee."

Interest begins accruing the same day you withdraw the cash. If your cash advance APR is 24% and you withdraw $500, you owe roughly $3.29 in interest after one month (assuming no additional charges). The interest compounds daily, meaning each day's interest is calculated on the previous day's balance plus interest. Over six months, that $500 withdrawal could cost you $60 to $75 in interest alone, plus the original fee.

The total cost depends on how long you carry the balance. A $500 cash advance at 4% fee plus 24% APR costs about $20 in the first month if you pay it off immediately, but $80 to $100 if you carry it for six months.

How payments are applied when you have multiple balances

If you have both purchases and a cash advance on your card, your payment goes toward the balance with the lowest interest rate first. Since purchases usually have a lower APR than cash advances, your payment will pay down purchases before it touches the cash advance. This means your cash advance debt sits and accrues interest while you pay off cheaper debt.

If you owe $2,000 in purchases at 18% APR and $500 in a cash advance at 24% APR, and you make a $500 payment, that payment reduces your purchase balance to $1,500. Your cash advance remains at $500, still accruing interest at the higher rate. You have to pay off all purchases before your payment starts reducing the cash advance.

To avoid this trap, pay the cash advance balance first, or make a payment large enough to cover both. Some card issuers allow you to specify which balance a payment goes toward, but most do not — they apply it automatically to the lowest-rate debt.

Alternatives to cash advances

If you need cash, consider these options before using a cash advance:

  • Debit card withdrawal: If you have a debit card linked to a checking account, withdrawing from your own account costs nothing.
  • Payday loan: Though expensive, a payday loan may have a lower total cost than a cash advance if you repay it within two weeks. Beyond that, the cost rises sharply.
  • Personal loan: A personal loan from a bank or credit union typically charges lower interest than a cash advance and has a fixed repayment schedule, making the total cost predictable.
  • Borrowing from family or friends: If possible, this costs nothing and avoids debt entirely.
  • Employer advance: Some employers offer paycheck advances with no fee or interest.

How cash advances affect your credit score

A cash advance does not directly hurt your credit score, but it increases your credit utilization ratio — the percentage of your available credit you are using. If your credit limit is $5,000 and you withdraw $500 in cash, your utilization jumps to 10%. High utilization (above 30%) can lower your score by 10 to 50 points, depending on your overall credit profile.

The cash advance also appears on your credit report as a separate transaction type, which some scoring models flag as riskier than regular purchases. If you carry the balance for months, the ongoing interest and late payments (if they occur) will damage your score more than the advance itself.

What happens if you cannot pay back a cash advance

If you do not pay the cash advance balance, it behaves like any other credit card debt. Interest continues to accrue, late fees are added if you miss a payment, and the debt is reported to credit bureaus. After 30 days of missed payments, the late payment appears on your credit report. After 180 days, the card issuer may charge off the account and sell the debt to a collection agency.

Unlike some other debts, credit card debt cannot be discharged in bankruptcy as easily as other types of debt, though it can be included in a bankruptcy filing. If you are struggling to repay, contact your card issuer to discuss a hardship plan or payment arrangement before the account goes to collections.

Frequently Asked Questions

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

A cash advance gives you physical cash and charges a fee plus high interest immediately. A balance transfer moves debt from one card to another and may offer a 0% introductory rate for 6 to 21 months. Balance transfers are for moving existing debt; cash advances are for getting cash. Both charge fees, but balance transfers are cheaper if you need time to pay.

Can I use a credit card cash advance to pay another credit card?

Technically yes, but it is expensive. You pay the cash advance fee and high interest on the money you withdraw, then use it to pay another card. You end up paying two fees and two interest rates instead of one. Transferring a balance directly between cards (a balance transfer) is much cheaper.

Does a cash advance show up differently on my credit report?

A cash advance appears as a separate transaction on your credit card statement and report, but it is still part of your overall credit card debt. It does not appear as a separate account. However, some credit scoring models treat cash advances as riskier than purchases, which can affect your score.

What if I withdraw cash but do not spend it?

You still owe the full amount plus the fee and interest. The cash advance fee is charged the moment you withdraw the money, regardless of whether you spend it. Interest starts accruing immediately as well. If you withdraw $500 and keep it in your wallet, you still owe $520 plus interest.

Can I get a cash advance from a credit card with no credit limit?

No. You need an active credit card account with an available credit limit and a separate cash advance limit. Secured cards, prepaid cards, and charge cards (like American Express) typically do not offer cash advances, or offer them only under specific conditions.