The three ways to pull cash 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 check mailed to you by your card issuer, or a cash-like purchase through services like PayPal or Square Cash. Each one costs you differently and affects your credit in different ways.

A cash advance is the most direct route — you insert your card into an ATM, enter a PIN, and withdraw cash up to your limit. A balance transfer check works like a regular check but draws from your credit line instead of a bank account. A cash-like purchase lets you send money to someone's bank account or phone number, and the card issuer treats it as a purchase rather than a cash advance, which usually means lower fees.

The catch: all three charge you fees and interest that start immediately. Unlike a purchase, which may have a grace period before interest kicks in, cash advances and balance transfer checks begin charging interest the day you get the money. Understanding which method costs least for your situation matters before you use any of them.

Key Takeaways

  • Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than purchases, with interest starting immediately.
  • Balance transfer checks work like regular checks but draw from your credit line and carry the same fees and interest rates as cash advances.
  • Cash-like purchases through digital payment services often have lower fees than traditional cash advances because they are classified as purchases, not cash withdrawals.
  • All three methods count against your available credit and can lower your credit score by increasing your credit utilization ratio.
  • If you need cash, a personal loan or a cash-back purchase at a store may cost you less than any credit card cash option.

Cash advances: how they work and what they cost

A cash advance lets you withdraw money directly from your credit card at an ATM or bank teller. You need a PIN, which you set up with your card issuer or request if you have not created one. The amount you can withdraw is usually lower than your full credit limit — many issuers cap it at 20 to 50 percent of your limit, though this varies by card and issuer.

The cost is immediate and steep. Most cards charge a cash advance fee of 3 to 5 percent of the amount withdrawn, with a minimum fee of $5 to $10. So if you withdraw $500, you might pay $15 to $25 just to get the cash. On top of that, the interest rate on cash advances is usually 2 to 3 percentage points higher than your purchase APR, and interest starts accruing the day you withdraw — there is no grace period. If your purchase APR is 18 percent, your cash advance APR might be 21 or 22 percent.

The math adds up fast. A $500 cash advance at a 5 percent fee ($25) plus 22 percent APR costs you $25 upfront and roughly $9 in interest after one month if you do not pay it back. After three months, you owe about $27 in interest alone.

Balance transfer checks and their hidden costs

A balance transfer check is a physical check mailed to you by your card issuer that draws from your credit line instead of a bank account. You deposit or cash it like a regular check, but the money comes from your credit card. The appeal is that it feels less like borrowing — it looks and works like a normal check — but the fees and interest are identical to a cash advance.

You will pay a balance transfer fee, usually 3 to 5 percent of the check amount, and the interest rate is the same as your cash advance APR. Interest starts the day you cash or deposit the check, not when you receive it. Some cards offer a promotional period on balance transfers (for example, 0 percent APR for six months), but that promotion almost never applies to balance transfer checks — it applies only to balance transfers between credit cards.

The main reason to use a balance transfer check instead of a cash advance is convenience: you do not need to find an ATM or know your PIN. But if your goal is to save money, this method does not offer any advantage over a standard cash advance.

Cash-like purchases: a cheaper alternative

Services like PayPal, Square Cash, Venmo, and similar apps let you send money to someone else's bank account or phone number using your credit card. The card issuer treats this as a purchase, not a cash advance, which means you get two advantages: a lower fee and a grace period before interest starts.

The fee is usually 2 to 3 percent instead of 3 to 5 percent, and you pay the purchase APR (typically lower than the cash advance APR) only if you carry a balance past the grace period. If you pay off the full amount before the grace period ends — usually 21 to 25 days — you owe only the fee and no interest at all.

The tradeoff is that you need someone to send the money to, or you need to send it to yourself through a service that allows it. Some people send money to a trusted friend or family member and ask them to withdraw it and give them cash, though this adds a step and relies on someone else's cooperation. Others use services that let you transfer to your own bank account, though some charge an additional fee for that feature.

How cash withdrawals affect your credit score

Any cash method — advance, balance transfer check, or cash-like purchase — counts against your available credit immediately. If your credit limit is $5,000 and you withdraw $1,000, your available credit drops to $4,000. This increases your credit utilization ratio, which is the percentage of your available credit you are using. Credit scoring models treat high utilization as a sign of financial stress, and your score can drop by 10 to 50 points depending on how much you withdraw and how much credit you already have in use.

The drop is temporary — your score recovers as you pay down the balance — but it happens immediately. If you are planning to apply for a loan or mortgage soon, a cash advance can hurt your timing. The damage is worst if you already carry balances on other cards, because your total utilization across all cards is what matters most.

When a personal loan or cash-back purchase costs less

Before you use a credit card to get cash, compare the cost to two alternatives: a personal loan and a cash-back purchase.

A personal loan from a bank, credit union, or online lender usually charges a lower interest rate than a cash advance APR, especially if you have decent credit. A personal loan also has a fixed repayment schedule, so you know exactly when you will be debt-free. The downside is that approval takes a few days, so this option does not work if you need cash today. But if you have time to wait, the interest savings often make it worth it.

A cash-back purchase at a grocery store, pharmacy, or retailer lets you buy something small and ask the cashier for cash back. You pay the purchase APR (lower than cash advance APR) and no fee at all. The catch is that you have to make a purchase and you can only get back a limited amount — usually $20 to $100 depending on the store. This works if you need a small amount of cash and were going to buy something anyway.

Frequently Asked Questions

Can I get a cash advance if I have a low credit limit?

Yes, but the amount you can withdraw is usually capped at 20 to 50 percent of your credit limit. If your limit is $500, you might only be able to withdraw $100 to $250. Call your card issuer to find out your specific cash advance limit — it is often lower than your purchase limit.

What happens if I do not pay back a cash advance?

The balance stays on your card and interest keeps accruing at your cash advance APR. If you do not pay, the debt can go to collections and damage your credit score for years. Your card issuer may also close your account and demand full payment immediately.

Do I need a PIN to get a cash advance?

Yes, you need a PIN to withdraw cash from an ATM. If you do not have one, contact your card issuer to set one up — it usually takes a few days. At a bank teller, you may be able to withdraw cash with your card and ID without a PIN, but you will still pay the same fee and interest.

Can I use a credit card to get cash at a store without making a purchase?

Some stores offer cash-back without a purchase, but this is rare and usually only at larger retailers. Most stores require you to buy something. If you want cash without a purchase, an ATM or bank teller is your only option.

Will a cash advance show up differently on my credit report than a regular purchase?

No, it all appears as one balance on your credit report. But the interest rate and fees are tracked separately by your card issuer, and you can see the breakdown in your statement. The cash advance portion will show a higher APR than purchases.