Cash advances let you borrow against your credit limit, but they cost more than regular purchases
A cash advance is a withdrawal of cash from your credit card account. You are borrowing money at your credit limit, not spending from a balance you already have. The card issuer treats it as a loan, not a purchase, which means you pay interest immediately — there is no grace period like there is for regular card spending.
You can get a cash advance at an ATM using your PIN, at a bank teller's window, or through a cash advance check that came with your card. The money hits your account within minutes at an ATM or the same day at a bank. But the cost is steep: cash advance fees (usually 3 to 5 percent of the amount withdrawn) plus a higher interest rate (often 5 to 10 percentage points above your purchase APR) that starts accruing immediately.
Key Takeaways
- Cash advances charge a fee (typically 3 to 5 percent) and a higher interest rate than purchases, with interest starting the day you withdraw.
- You can withdraw cash at an ATM with your PIN, at a bank teller window, or by depositing a cash advance check.
- Your cash advance limit may be lower than your total credit limit, and some cards do not offer cash advances at all.
- A personal loan or balance transfer card usually costs less than a cash advance if you need cash for more than a few days.
Where and how to withdraw cash from your card
The fastest method is an ATM. Insert your card, enter your PIN (the same one you use for debit), and select "cash advance" or "withdraw cash." The ATM will show you the fee and ask you to confirm. Money appears in your account immediately, though it may take a day to show in your bank account if you are moving it there.
At a bank branch, you can ask a teller for a cash advance. Bring your card and ID. The teller will process it the same way — you pay the fee upfront, and the amount is added to your credit card balance. This method works even if you do not have a PIN set up, though you will need to prove your identity.
Some card issuers send cash advance checks with your card or statement. You write a check to yourself, deposit it in your bank account, and the amount is treated as a cash advance on your credit card. This is slower (the check takes 3 to 5 business days to clear) but useful if you do not want to visit an ATM or branch.
Fees and interest rates you will pay
Cash advance fees are charged upfront and appear on your next statement. Most cards charge between 3 and 5 percent of the amount withdrawn, with a minimum fee of $2 to $10. A $500 cash advance at 4 percent costs $20 in fees alone. Some cards charge a flat fee instead (like $10 per advance) regardless of amount, which is cheaper for small withdrawals but more expensive for large ones.
The interest rate on a cash advance is separate from your purchase APR and is almost always higher. If your card charges 18 percent APR on purchases, the cash advance APR might be 23 or 24 percent. Interest starts accruing the day you withdraw — there is no grace period. A $500 advance at 24 percent APR costs about $10 in interest per month if you do not pay it back.
Your cash advance limit is often lower than your total credit limit. If your card has a $5,000 limit, your cash advance limit might be $1,500 or $2,000. Check your card's terms or call the issuer to find out your limit before you try to withdraw.
Why cash advances are expensive compared to other borrowing
A $500 cash advance at 4 percent fee plus 24 percent APR costs $20 upfront plus roughly $10 in interest per month. If you pay it back in one month, the total cost is $30. A personal loan for the same amount at 12 percent APR would cost roughly $5 in interest for one month — one-sixth the price.
A balance transfer card with a 0 percent introductory APR for 12 months would cost nothing if you pay off the balance within that window. You would pay a balance transfer fee (usually 3 to 5 percent), but that is a one-time cost, not ongoing interest. For amounts you cannot pay back quickly, a balance transfer or personal loan is almost always cheaper than a cash advance.
Credit card companies make cash advances expensive because they are riskier — the money leaves the system immediately and cannot be reversed like a purchase dispute can. The high fees and rates reflect that risk.
How a cash advance affects your credit score
A cash advance does not directly hurt your credit score, but it increases your credit utilization ratio. If you have a $5,000 limit and withdraw $500, your utilization jumps from 0 to 10 percent (or higher if you already had a balance). Credit scoring models penalize utilization above 30 percent, so a large cash advance can lower your score by a few points.
The bigger risk is missing payments. If the cash advance balance sits unpaid, interest compounds monthly, and missed payments are reported to credit bureaus. A single missed payment can drop your score 100 points or more. Pay off cash advances as quickly as you can to avoid this.
When a cash advance makes sense
A cash advance is reasonable only in a true emergency when you need cash immediately and have no other option. Examples: your car breaks down and the mechanic takes cash only, or you need emergency travel money and your bank is closed. In these cases, the high cost is worth the speed.
A cash advance does not make sense for everyday expenses, bills you can pay by card, or amounts you cannot pay back within a month. If you are considering a cash advance to cover a shortfall in your budget, a personal loan or payment plan with the creditor is cheaper and safer.
Frequently Asked Questions
Can I get a cash advance if my credit is bad?
Yes. A cash advance is a withdrawal against your existing credit limit, not a new loan, so the issuer does not re-check your credit. If your card is open and active, you can withdraw up to your cash advance limit regardless of your current credit score.
What is the difference between a cash advance and a balance transfer?
A cash advance is cash you withdraw from your credit limit. A balance transfer moves debt from one card to another. Cash advances charge higher interest and fees; balance transfers charge a one-time fee but may offer a 0 percent introductory rate. Use a balance transfer to move existing debt, a cash advance only for cash you need immediately.
Will the cash advance show up on my credit report?
The withdrawal itself does not appear on your credit report, but the balance does. If you carry the balance unpaid, it counts toward your credit utilization and can lower your score. Missed payments on the cash advance balance are reported and will damage your credit.
Can I withdraw my entire credit limit as a cash advance?
No. Most cards set a separate cash advance limit that is lower than your total credit limit. You can find your limit in your card's terms, online account, or by calling the issuer. Some cards do not offer cash advances at all.
How long does a cash advance stay on my account?
Until you pay it off. The balance accrues interest every month until it reaches zero. Unlike a purchase, there is no grace period, so interest starts the day you withdraw. Paying it off as quickly as possible is the only way to stop the interest from growing.