What a credit card cash advance is and how to get one
A cash advance is a withdrawal of cash from your credit card account, treated as a loan you repay like any other credit card balance. You can get one at an ATM using your PIN, at a bank teller's window with your card and ID, or through a cash advance check that came with your card statement. The money appears in your account within one to three business days, depending on your bank.
The process itself is simple: insert your card, enter your PIN, select the cash advance option, and withdraw the amount you need. At a bank, you hand over your card and ask for a cash advance. With a check, you fill it out and deposit it like any other check. But the cost and terms are where cash advances differ sharply from regular purchases, which is why understanding them before you use one matters.
Key Takeaways
- Cash advances charge a separate fee (usually 3 to 5 percent of the amount) plus a higher interest rate than purchases, often 20 to 25 percent or more.
- Interest on a cash advance starts accruing immediately — there is no grace period like there is for purchases.
- Your cash advance limit is often lower than your credit limit, and you can find it in your account statement or by calling your card issuer.
- You repay a cash advance the same way you repay purchases: through your monthly payment, though the higher interest means it costs more to carry a balance.
Fees and interest rates for cash advances
Every cash advance carries two costs: a cash advance fee and a higher interest rate. The fee is charged once, upfront, and ranges from 3 to 5 percent of the amount you withdraw — so a $500 advance costs $15 to $25 in fees alone. Some cards charge a flat fee instead (like $10 per advance), which is cheaper for larger amounts but more expensive for small ones.
The interest rate on cash advances is separate from your purchase rate and is almost always higher. While a purchase might carry 15 percent APR, a cash advance on the same card might be 24 percent or higher. This rate applies to your balance immediately — there is no grace period. If you withdraw $500 and carry it for a month, you will owe roughly $10 in interest on top of the fee you already paid.
You can find your card's cash advance fee and rate in your cardholder agreement or by logging into your account online. Call your card issuer if you cannot locate them; they are required to disclose both figures.
How much you can withdraw and where
Your cash advance limit is separate from your credit limit and is usually much lower — often 20 to 50 percent of your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $2,500. This limit is set by your card issuer and can change over time based on your account history.
You can withdraw cash at ATMs that accept your card's network (Visa, Mastercard, American Express, or Discover). You can also visit a bank branch — yours or any other bank — and ask a teller for a cash advance. Some card issuers send convenience checks with your statements; you can write these like regular checks and deposit them into your bank account, and they count as a cash advance.
ATMs charge a fee in addition to your card issuer's fee. An out-of-network ATM might charge $2 to $4 per transaction. Using an ATM at your own bank or a bank in your card's network (if available) can avoid this extra cost.
How cash advances appear on your statement and affect your balance
A cash advance shows up as a separate line item on your credit card statement, distinct from purchases. It lists the amount withdrawn, the fee charged, and the interest accrued since the withdrawal. The balance owed on that cash advance is part of your total credit card balance and must be repaid.
When you make a payment to your credit card, the payment is applied first to the balance with the highest interest rate — usually the cash advance. This means your payment goes toward the cash advance before it touches any purchase balance you might have. This is actually in your favor, since the cash advance costs more to carry.
If you have both a purchase balance and a cash advance balance, and you pay only the minimum, the minimum covers interest and fees but barely touches principal. A $500 cash advance at 24 percent APR costs roughly $10 per month in interest alone, so a $25 minimum payment leaves only $15 to reduce the actual balance.
When a cash advance makes sense and when it does not
A cash advance is useful when you need cash immediately and have no other option — an emergency car repair that requires cash payment, or a situation where your debit card is not accepted. The cost is high, but sometimes the alternative (missing a payment, bouncing a check, or paying a payday lender) is worse.
A cash advance does not make sense if you are using it to fund spending you cannot otherwise afford, or if you are carrying a balance on purchases already. The interest and fees compound quickly, and you will pay far more than the cash is worth. If you are considering a cash advance to pay another debt, explore whether a balance transfer (moving a balance to a card with a lower rate) or a personal loan might cost less.
If you do take a cash advance, pay it back as quickly as possible. Every month you carry it costs you 2 percent of the balance in interest alone (at 24 percent APR). A $500 advance costs $10 per month to carry, so repaying it within a month or two saves you money compared to a longer payoff.
How cash advances affect your credit score
A cash advance itself does not hurt your credit score — it is a transaction on an existing account, not a new account or a missed payment. However, a cash advance does increase your credit utilization, which is the percentage of your available credit you are using. If your credit limit is $5,000 and you take a $500 cash advance plus have $1,000 in purchases, you are using $1,500 of $5,000, or 30 percent.
Credit utilization is a factor in your credit score, and higher utilization can lower your score slightly. The effect is temporary — once you pay down the balance, your utilization drops and your score recovers. Paying off the cash advance quickly minimizes this impact.
A cash advance also does not create a hard inquiry or a new account, so it does not trigger the score drops that come with applying for new credit. The only score risk is the utilization increase, which is reversible.
Alternatives to a credit card cash advance
Before taking a cash advance, consider whether another option costs less. A personal loan from a bank or credit union often carries a lower interest rate than a cash advance — sometimes 10 to 15 percent — and no upfront fee. The downside is that approval takes a few days, so it does not work for same-day cash needs.
A balance transfer to a card with a 0 percent introductory rate can help if you are trying to move an existing balance off a high-rate card. Some cards offer 0 percent for 6 to 21 months on transferred balances, though they charge a transfer fee (usually 3 to 5 percent). This is cheaper than a cash advance if you can pay the balance within the promotional period.
Borrowing from family or friends, if possible, costs nothing. A payday loan is more expensive than a cash advance and should be avoided — payday lenders charge 400 percent APR or higher. A cash advance, despite its cost, is cheaper than a payday loan.
Frequently Asked Questions
Can I use a cash advance to pay off another credit card?
Yes, but it is expensive. You pay the cash advance fee and interest rate on the amount, then use that cash to pay the other card. A balance transfer (moving the balance directly from one card to another) is cheaper because it avoids the cash advance fee and sometimes offers a lower promotional rate. Check whether your card issuer offers balance transfers before taking a cash advance.
What happens if I do not repay a cash advance?
It becomes part of your credit card balance and accrues interest each month. If you miss payments, your card issuer reports the missed payment to credit bureaus, which damages your credit score. They may also charge late fees and increase your interest rate. The balance will not go away unless you repay it or the account is closed.
Is there a grace period for cash advances like there is for purchases?
No. Interest on a cash advance starts accruing the day you withdraw it. Purchases have a grace period (usually 21 to 25 days) before interest kicks in, but cash advances do not. This is one reason cash advances are so expensive — you pay interest from day one.
Can I get a cash advance if my card is maxed out?
No. Your cash advance limit is separate from your credit limit, but you cannot exceed your total credit limit. If you are at your limit, you cannot take a cash advance until you pay down your balance. Some card issuers allow you to request a higher credit limit, which would raise your cash advance limit as well.
Do cash advances show up differently on my credit report?
No. A cash advance is reported as part of your credit card balance, not as a separate type of debt. Credit bureaus see only that you owe money on the card; they do not distinguish between purchases and cash advances. However, the higher interest rate means the balance grows faster, which can affect your utilization and score.