You can withdraw cash from a credit card, but it is not the same as using a debit card

A cash advance is when you take money out of your credit card account as cash — at an ATM, through a bank teller, or sometimes at a store. The money comes from your credit limit, not from a bank account you own. This is different from a debit card withdrawal, which pulls from money you already have.

The catch is that cash advances cost more than regular credit card purchases. You pay an upfront fee (usually 3 to 5 percent of the amount you withdraw), and interest starts charging immediately — there is no grace period like there is for purchases. If you borrow $200, you might pay $6 to $10 just to get the cash, plus interest from day one.

Most people should avoid cash advances unless they have no other option. But if you need to understand how they work or when you might use one, here is what you need to know.

Key Takeaways

  • Cash advances charge a fee (typically 3 to 5 percent) plus interest that starts immediately, making them much more expensive than regular purchases.
  • You can withdraw cash at ATMs, bank tellers, or sometimes at store counters, but the method depends on your card issuer and the network it uses.
  • The interest rate on cash advances is often higher than your regular purchase rate, and you do not get a grace period before interest starts.
  • If you need cash, a personal loan, payday loan alternative, or borrowing from family is usually cheaper than a cash advance.

Where and how to withdraw cash from your credit card

The most common way is at an ATM. You insert your card, enter your PIN (which you may need to set up first), and withdraw cash up to your daily limit. Your card issuer sets this limit — it is often lower than your total credit limit. For example, your credit limit might be $5,000, but your daily ATM withdrawal limit might be $500.

You can also go to a bank branch and ask a teller for a cash advance. Bring your card and ID. This method sometimes has a higher daily limit than ATM withdrawals, but it depends on the bank and your card issuer.

Some stores allow cash advances at the register, though this is less common now. You would ask the cashier, and they would process it like a purchase. Not all card networks or issuers allow this, so it is worth asking your card company first.

Before you try any method, call your card issuer or check your online account to find out your daily cash advance limit. Trying to withdraw more than that limit will be declined.

The fees and interest you will pay

A cash advance fee is charged upfront and is usually a percentage of the amount you withdraw. Most cards charge between 3 and 5 percent, though some charge a flat fee (like $10) if that is higher. A $200 withdrawal might cost $6 to $10 in fees alone.

Interest starts accruing immediately — there is no grace period. With a regular purchase, you might have 21 to 25 days before interest kicks in. With a cash advance, interest starts the day you withdraw the money. The interest rate is often 2 to 5 percentage points higher than your regular purchase rate.

If your regular purchase rate is 18 percent APR and your cash advance rate is 23 percent APR, and you withdraw $200, you would owe roughly $3.83 in interest after one month (before the fee). That $200 withdrawal could cost you $10 in fees plus $3.83 in interest in the first month alone.

The longer you carry the balance, the more interest adds up. This is why cash advances are expensive compared to other ways of borrowing money.

How a cash advance affects your credit and your account

A cash advance counts as a balance transfer on your credit report, not a purchase. This matters because it is tracked separately from your regular spending. Your card issuer reports the cash advance balance to the credit bureaus, and it shows up in your credit history.

The cash advance does count toward your credit utilization — the percentage of your credit limit you are using. If your limit is $5,000 and you take a $500 cash advance, your utilization jumps to 10 percent (or higher if you have other balances). High utilization can lower your credit score, even temporarily.

The cash advance balance does not disappear when you make a payment. You have to pay it off separately from any purchase balances. Some card issuers apply your payments to purchases first, then to cash advances, which means the high-interest cash advance can sit on your account longer.

Cheaper ways to get cash when you need it

If you need cash urgently, a cash advance should be your last choice. Here are options that usually cost less:

  • Borrow from family or friends. No fees, no interest, and you keep your credit score intact. If you can ask, this is almost always the cheapest option.
  • Personal loan from a bank or credit union. Interest rates are usually lower than credit card cash advances, and you know exactly how long you have to repay. A credit union loan is often cheaper than a bank loan if you are a member.
  • Payday loan alternative programs. Some nonprofits and credit unions offer short-term loans (usually $300 to $1,000) with lower fees than payday lenders or cash advances. Search for "payday loan alternative" plus your state name to find local programs.
  • Ask your employer for an advance. Some employers will advance you part of your next paycheck with no fee. It is worth asking your HR or payroll department.
  • Sell something you own. If you have items you do not need, selling them online or locally gets you cash without borrowing.

What happens if you cannot pay back a cash advance

If you do not pay back the cash advance, it works like any other credit card debt. Interest keeps accruing, and if you miss payments, your credit score drops. After 30 days of missed payments, the card issuer reports it to the credit bureaus. After 180 days, they may close your account and send it to a collection agency.

Unlike some other types of debt, credit card debt (including cash advances) cannot be discharged in bankruptcy as easily as other debts. You would need to file for bankruptcy protection, which has serious long-term consequences for your credit and finances.

If you are struggling to pay back a cash advance, contact your card issuer and ask about a hardship program. Many issuers offer temporary payment plans or lower interest rates if you explain your situation. It is better to call before you miss a payment than after.

Frequently Asked Questions

Can I use a credit card to withdraw money at any ATM?

Most ATMs accept credit cards, but your card issuer may restrict which networks you can use. Visa and Mastercard work at most ATMs worldwide. American Express and Discover have smaller ATM networks. Check your card's terms or call your issuer to find out which ATMs accept your card.

Is there a difference between a cash advance and a balance transfer?

Yes. A cash advance is withdrawing cash from your credit limit. A balance transfer is moving debt from one card to another. Both are expensive, but they work differently. Cash advances charge a fee and high interest immediately. Balance transfers often have a low or zero percent introductory rate for a set period, then a higher rate after.

What if I pay back the cash advance right away — do I still pay interest?

You still pay the upfront fee no matter what. Interest charges depend on how long you carry the balance. If you withdraw $200 on Monday and pay it back on Tuesday, you owe the fee plus one day of interest. The fee is unavoidable, but paying back quickly limits the interest.

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

Technically yes, but it is a bad idea. You are borrowing at a high interest rate with an upfront fee just to pay another bill. If the other bill is also high-interest debt (like a payday loan), you are trading one expensive debt for another. If it is a regular bill, you should find another way to pay it.

Will taking a cash advance hurt my credit score?

It can, because it increases your credit utilization immediately. It also shows up as a separate type of account activity on your credit report. The impact is usually temporary if you pay it back quickly, but carrying a large cash advance balance for months will lower your score.