The main ways to take money from a credit card

You can get cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer to your checking account, or a cash-like transaction such as buying a money order or casino chips. Each one costs you differently and affects your credit in different ways.

The most common method is a cash advance. You go to an ATM, bank, or sometimes a convenience store, insert your credit card, and withdraw cash just like you would from a debit card. The money appears in your hand immediately. The catch is that cash advances charge a fee (usually 3 to 5 percent of the amount you withdraw) and start charging interest right away — there is no grace period like there is with regular purchases.

A balance transfer moves money from your credit card to your bank account. You contact your card issuer and request the transfer. The money lands in your checking account within a few business days. This also charges a fee, usually 3 to 5 percent, and interest starts accruing immediately.

A third option is buying something that functions as cash — a money order, casino chips, or gift cards — with your credit card. This avoids the "cash advance" label and its fees, but the merchant may charge their own fee, and you are still using credit that you will have to repay.

Key Takeaways

  • Cash advances and balance transfers both charge upfront fees of 3 to 5 percent and begin accruing interest immediately with no grace period.
  • The interest rate on cash advances is often higher than the rate on regular purchases, sometimes by 5 percentage points or more.
  • Taking cash from a credit card increases your credit utilization ratio, which can lower your credit score in the short term.
  • If you need cash, a personal loan or borrowing from family usually costs less than a credit card cash advance.

Why cash advances cost more than regular purchases

When you buy something with a credit card, you get a grace period — usually 21 to 25 days — before interest starts. If you pay the full balance by the due date, you pay no interest at all. A cash advance skips this grace period entirely. Interest starts the moment you withdraw the money.

The interest rate itself is also higher. Your card's regular purchase APR might be 18 percent, but the cash advance APR could be 23 or 24 percent. Card issuers charge more for cash because they see it as riskier — you are borrowing unsecured money rather than buying something they can repossess.

On top of the interest, you pay an upfront fee. Most cards charge between 3 and 5 percent of the amount you withdraw. If you take out $500, you might pay $15 to $25 just to get the cash, before any interest charges.

The math adds up quickly. A $500 cash advance at 24 percent APR with a 5 percent fee costs you $25 upfront plus roughly $10 in interest over a month if you do not pay it back. A regular purchase of the same amount costs you nothing if you pay it off on time.

How a cash advance affects your credit score

Taking a cash advance raises your credit utilization ratio — the percentage of your available credit that you are currently using. If your card has a $5,000 limit and you take a $500 cash advance, your utilization jumps to 10 percent. Credit scoring models treat utilization as a sign of financial stress, so your score may drop by 10 to 50 points in the short term.

The impact is temporary if you pay the balance down quickly. Once you repay the cash advance, your utilization drops and your score recovers. But if you carry the balance for months, the damage lingers.

Some card issuers also report cash advances separately from regular purchases to the credit bureaus. This can flag your account as higher-risk, which may affect how lenders view you if you are applying for a mortgage or car loan soon.

Alternatives that cost less than a cash advance

Before you take a cash advance, consider whether you actually need cash or whether you need money. If you need money to pay a bill, most billers now accept credit card payments directly — you avoid the cash advance fee entirely. If you need cash for an emergency, a personal loan from a bank or credit union usually charges less interest than a credit card cash advance, even if your credit is not perfect.

Borrowing from family or friends costs nothing if they agree to it. A payday loan is faster than a personal loan but charges much higher interest, so it should be a last resort. A 401(k) loan (if your employer plan allows it) lets you borrow from your own money at a low rate, though it carries the risk that you will owe it back immediately if you leave your job.

If you are in a pattern of needing cash advances, that is often a sign that your expenses are outpacing your income. A credit counselor can help you build a budget and find ways to cover gaps without borrowing. Many nonprofits offer this service free or at low cost.

What happens if you cannot pay back a cash advance

If you do not repay a cash advance, the interest and fees keep growing. After 30 days of non-payment, the card issuer reports it to the credit bureaus as a late payment. Your credit score drops significantly — often by 100 points or more. After 180 days, the issuer may close your account and sell the debt to a collection agency.

A collection agency can sue you for the debt, and if they win, they can garnish your wages or place a lien on your property (depending on your state). The debt can stay on your credit report for seven years from the date you first missed a payment.

If you are struggling to repay a cash advance, contact your card issuer as soon as possible. Some issuers offer hardship programs that lower your interest rate or waive fees if you are facing a temporary setback. You can also reach out to a nonprofit credit counselor, who can negotiate with your issuer on your behalf.

Cash advances from different sources

An ATM is the fastest way to get a cash advance, but not all ATMs accept credit cards — most are set up for debit cards only. Your card issuer's own ATMs usually work. You can also visit a bank branch and ask a teller for a cash advance, even if you do not have an account there, though some banks charge an extra fee for this.

Convenience stores, casinos, and some other merchants offer cash advances at the register, but they often charge higher fees than ATMs. A casino might charge 6 or 7 percent to advance you cash, compared to 3 or 4 percent at your bank's ATM.

Your card issuer sets a daily limit on how much you can withdraw — often $500 to $1,000, though it varies by card and issuer. This limit is separate from your regular purchase limit. If you need more than the daily limit, you will have to make multiple withdrawals over several days.

How to request a balance transfer to your bank account

A balance transfer to your checking account works differently from a traditional balance transfer (which moves money between credit cards). You contact your card issuer's customer service and ask to transfer funds to your linked bank account. Some issuers call this a "cash transfer" or "account transfer."

Not all cards offer this feature. It is more common on premium cards and cards from larger issuers like Chase, Bank of America, and Capital One. You will need to provide your bank account number and routing number. The transfer usually takes 3 to 5 business days.

Like a cash advance, a balance transfer charges a fee (typically 3 to 5 percent) and interest starts immediately. The interest rate is usually the same as your cash advance APR, not your purchase APR. The advantage over an ATM cash advance is that you avoid the ATM fee and you get the money in your account rather than in your hand, which some people find easier to manage.

Frequently Asked Questions

Can I take a cash advance on a credit card with no credit history?

Most card issuers allow cash advances on any active credit card, regardless of your credit score. However, your daily withdrawal limit may be lower if you are new to credit or have a low credit limit. Some secured credit cards restrict cash advances entirely, so check your cardholder agreement.

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

A cash advance gives you physical cash or deposits money into your bank account. A balance transfer (between credit cards) moves your balance from one card to another, usually to take advantage of a lower interest rate. Both charge fees and interest, but balance transfers between cards sometimes offer a promotional 0 percent APR period.

Will a cash advance hurt my credit score?

Yes, temporarily. It raises your credit utilization ratio, which can drop your score by 10 to 50 points. The impact fades as you pay down the balance. A late payment on the cash advance will hurt your score much more severely and for much longer.

Can I take a cash advance on a credit card to pay off another credit card?

Technically yes, but it is expensive. You would pay a cash advance fee on the money you withdraw, then pay interest on it immediately. A balance transfer between credit cards is usually cheaper because some cards offer a promotional 0 percent APR period on transfers. Compare the fees and rates before you decide.

What should I do if I cannot afford to repay a cash advance?

Contact your card issuer immediately and ask about hardship programs or payment plans. Many issuers will work with you if you reach out before you miss a payment. You can also contact a nonprofit credit counselor through the National Foundation for Credit Counseling (NFCC) or your local 211 service for free guidance.