Three ways to get cash using a credit card

You can get cash from a credit card through a cash advance, a balance transfer check, or by using a peer-to-peer payment app that lets you send money to yourself or another person. Each method charges different fees and interest rates, and each one hits your credit differently. A cash advance is the most direct route — you walk into an ATM or bank branch and withdraw cash against your credit limit — but it is also the most expensive, with fees starting at 3% to 5% of the amount and interest rates that often exceed your regular purchase rate by several percentage points.

Balance transfer checks work like paper checks drawn against your credit line. You write or deposit the check, and the amount becomes a balance on your card. The fee is usually similar to a cash advance fee, but the interest rate may be lower if your card offers a promotional period for balance transfers. Peer-to-peer apps like Venmo, PayPal, or Cash App let you move money to your own bank account or to someone else, though most charge a fee if you fund the transfer with a credit card rather than a debit card or bank account.

Key Takeaways

  • Cash advances charge a fee (typically 3% to 5%) plus a higher interest rate than purchases, with interest accruing immediately with no grace period.
  • Balance transfer checks may have a lower promotional interest rate than cash advances but still charge an upfront fee and count against your available credit.
  • Peer-to-peer payment apps charge a percentage fee (usually 1.5% to 3%) when you fund a transfer with a credit card, making them expensive for regular cash access.
  • All three methods reduce your available credit and can affect your credit utilization ratio, which impacts your credit score.

Cash advances: how they work and what they cost

A cash advance is a short-term loan against your credit card balance. You can get one at an ATM using your PIN, at a bank teller window, or sometimes through a convenience check mailed by your card issuer. The moment you withdraw the cash, the transaction appears on your statement as a cash advance, not a purchase.

The cost has three parts. First, there is an upfront cash advance fee, usually 3% to 5% of the amount withdrawn — so a $500 advance costs $15 to $25 before you even use the money. Second, the interest rate on a cash advance is almost always higher than your purchase rate; many cards charge 20% to 30% APR on cash advances while charging 15% to 20% on purchases. Third, interest starts accruing immediately. Unlike purchases, which often have a grace period of 20 to 30 days before interest kicks in, a cash advance begins charging interest the day you withdraw it. There is no grace period.

If you withdraw $500 at a 5% fee and 25% APR, you owe $525 immediately, plus $10.42 in interest after one month if you make no payment. After three months, the interest alone exceeds $38.

Balance transfer checks and promotional rates

Balance transfer checks are physical checks issued by your card company that draw directly from your credit line. You deposit or write the check like any other check, and the amount becomes a balance on your card. The advantage over a cash advance is that some cards offer a promotional interest rate on balance transfers — often 0% APR for 6 to 21 months, depending on the card and the promotion running at the time you open the account.

The catch is that the promotional rate applies only if you initiate the balance transfer within a specific window, usually 60 days of opening the account. After the promotional period ends, the interest rate reverts to your regular purchase rate or a rate set for that specific balance. You also pay an upfront fee, typically 3% to 5%, the same as a cash advance. And like a cash advance, the balance transfer reduces your available credit immediately.

Balance transfer checks make sense if you have an existing high-interest debt you want to move to a 0% promotional rate, but they are not a practical way to get spending cash. You are paying a fee to move money from one place to another, and you are still borrowing against your credit limit.

Peer-to-peer apps and their credit card fees

Apps like Venmo, PayPal, Square Cash, and Cash App let you send money to another person or to your own bank account. If you fund the transfer with a credit card instead of a debit card or bank account, the app charges a fee — usually 1.5% to 3% of the amount sent. Some apps charge a flat fee instead (for example, $0.25 per transaction) or offer free transfers if you use a debit card or bank account but charge a percentage if you use credit.

The advantage is simplicity: you open the app, enter an amount, and the money lands in your bank account or goes to someone else within minutes. The disadvantage is cost. A $500 transfer at 2.5% costs $12.50, and you are still borrowing against your credit limit. The transaction may also be coded as a cash advance by your card issuer, which means the same high interest rate and no grace period apply.

Peer-to-peer apps are useful for splitting a bill or sending money to a friend, but they are not a cost-effective way to get cash regularly. If you need cash often, a debit card or a personal loan would be cheaper.

How cash from your credit card affects your credit score

All three methods — cash advances, balance transfer checks, and peer-to-peer transfers funded by credit card — reduce your available credit immediately. If your card has a $5,000 limit and you take a $1,000 cash advance, your available credit drops to $4,000. This affects your credit utilization ratio, which is the percentage of your total available credit that you are using. Credit scoring models like FICO and VantageScore weight utilization heavily; using more than 30% of your available credit can lower your score, and using more than 50% can lower it significantly.

The impact is temporary if you pay off the balance quickly. Once you pay down the cash advance, your available credit returns and your utilization ratio improves. But if you carry the balance for months, the damage to your score can persist. Additionally, the transaction itself may be reported to the credit bureaus as a separate type of credit activity, which some scoring models treat differently than a regular purchase.

When a personal loan or line of credit is cheaper

If you need cash regularly or in a large amount, a personal loan or a home equity line of credit (HELOC) is almost always cheaper than a credit card cash advance. A personal loan from a bank, credit union, or online lender typically charges 6% to 36% APR depending on your credit score, with no upfront fee. A HELOC charges a variable interest rate (often prime rate plus 1% to 2%) and has no upfront fee if you are only drawing cash, though some lenders charge an annual fee.

The trade-off is that a personal loan or HELOC takes a few days to a week to fund, whereas a cash advance is instant. But if you can wait, the interest savings are substantial. A $5,000 personal loan at 12% APR costs $300 in interest over one year. A $5,000 cash advance at 25% APR with a 5% upfront fee costs $250 in fees plus $1,250 in interest over one year — more than five times as much.

Frequently Asked Questions

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

Technically yes, but it is expensive. The cash advance fee and high interest rate make this an inefficient way to move debt. A balance transfer (moving the balance directly from one card to another) is cheaper because it avoids the cash advance fee and may include a promotional 0% APR period. If you cannot do a balance transfer, a personal loan is usually a better option.

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

A cash advance gives you physical cash and charges a high interest rate immediately with no grace period. A balance transfer moves an existing debt from one card to another and may include a promotional 0% APR period. Balance transfers are designed for moving debt; cash advances are designed for accessing cash.

Do cash advances show up on my credit report?

Cash advances do not appear as a separate line item on your credit report, but they reduce your available credit and increase your utilization ratio, which can lower your score. The transaction is reported to your card issuer and appears on your monthly statement.

Can I get a cash advance with a secured credit card?

Yes, most secured cards allow cash advances, though the fee and interest rate are the same as on a regular card. Some secured card issuers cap the cash advance amount at a percentage of your deposit, so check your card agreement before you try to withdraw.

What happens if I cannot pay back a cash advance?

The balance stays on your card and continues to accrue interest at the cash advance rate. If you do not pay, the account may be reported as delinquent to the credit bureaus, which damages your credit score. The card issuer may also close your account and refer the debt to a collection agency.