Taking cash out of a credit card costs more than you think

You can take cash out of a credit card through an ATM, bank teller, or cash advance service, but the moment you do, you start paying fees and interest that don't apply to regular purchases. A cash advance is a loan against your credit limit, not a withdrawal from money you've already paid. Most cards charge a flat fee (often $5 to $10) or a percentage of the amount (usually 3% to 5%), whichever is higher. Interest starts accruing immediately — there's no grace period like there is for purchases — and the rate is typically 2% to 3% higher than your regular APR.

The math matters. If you take out $500 at a 5% fee plus a 24% APR, you're paying $25 upfront plus roughly $10 in interest the first month alone. That $500 becomes $535 before you've even spent it. Most people use cash advances only when they have no other option, because the cost is steep and the debt sits on your credit report like any other balance.

Key Takeaways

  • Cash advances charge a separate fee (flat or percentage-based) plus a higher interest rate than purchases, with interest starting immediately.
  • You can get cash at an ATM using your credit card PIN, at a bank teller with your card and ID, or through a cash advance service, but all three methods trigger the same fees.
  • The cash advance limit is often lower than your credit limit, so you may not be able to withdraw as much as you can spend.
  • Paying back a cash advance should be your priority because the interest rate is higher than almost any other debt you carry.

Three ways to physically get the cash

ATM withdrawal is the fastest method. Insert your credit card, enter your PIN (which you set up with your card issuer), and withdraw up to your cash advance limit. The transaction posts within a day or two. You don't need to go to your card issuer's bank — any ATM will work, though some charge an additional ATM operator fee on top of the card issuer's cash advance fee.

Bank teller withdrawal requires you to visit a branch of your card issuer (or sometimes any bank) with your card and a photo ID. You tell the teller how much cash you want, and they process it as a cash advance. This method is slower than an ATM but useful if you need a large amount or prefer a human transaction. Some banks limit teller cash advances to business hours.

Cash advance services — sometimes called check-cashing or payday loan services — will advance cash against your credit card for a fee. These are separate from your card issuer and charge their own fees on top of what your card charges. This is the most expensive route and should be avoided unless the other two options are truly unavailable.

What fees and interest rates actually look like

Your card's terms document lists the cash advance fee and APR separately from purchase terms. The fee is usually one of two structures: a flat amount per transaction (like $5 or $10) or a percentage of the amount withdrawn (like 3% or 5%), and you pay whichever is higher. A $100 withdrawal with a $5 flat fee or 3% fee means you pay $5. A $500 withdrawal with the same terms means you pay $15 (5% of $500).

The interest rate for cash advances is almost always higher than your purchase APR. If your card charges 18% on purchases, the cash advance APR might be 24% or 26%. Interest accrues daily from the moment you withdraw the cash — there is no 21-day grace period. That means a $500 cash advance at 24% APR costs you roughly $10 in interest the first month, $10 the second month, and so on until you pay it back.

Your card issuer reports the cash advance as part of your total balance and credit utilization, which affects your credit score. If your limit is $5,000 and you take out a $1,000 cash advance, you're using 20% of your available credit, which lenders see as higher risk.

Cash advance limits are often lower than your credit limit

Your card issuer sets a separate cash advance limit, which is usually 20% to 50% of your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $2,500. You won't know this number until you try to withdraw or check your card's online account. Some issuers list it in your terms; others only show it when you attempt a withdrawal.

If you need more cash than your advance limit allows, you have to wait until you pay down the existing advance or contact your issuer to request a higher limit. Requesting a higher cash advance limit is possible but not may provide — the issuer reviews your account and may decline.

Why paying back a cash advance should come first

When you make a payment to your credit card, the issuer applies it to balances in a specific order set by law: first to the highest-interest debt, then to lower-interest debt. Since cash advances carry the highest rate on your card, your payment goes there first — which sounds good until you realize you're still carrying the balance for months.

The math is brutal. A $500 cash advance at 24% APR takes roughly 24 months to pay off if you make minimum payments, and you'll pay nearly $150 in interest alone. Paying it back as quickly as possible — ideally within the first month — saves you hundreds of dollars compared to letting it sit. If you can't pay it back quickly, you shouldn't take the cash advance in the first place.

Alternatives that cost less

A personal loan from a bank or credit union typically charges 6% to 12% APR, far less than a cash advance. If you need cash and have time to apply, a personal loan is cheaper. The downside is the application takes a few days to a week, so this doesn't work for emergencies.

A 0% APR balance transfer card lets you move debt from another card to a new card with no interest for 6 to 21 months (depending on the card). This doesn't help you get cash, but if you already have high-interest debt, it's cheaper than a cash advance. Balance transfers do charge a fee (usually 3% to 5%) and require a new application.

Borrowing from family or friends costs nothing if they don't charge interest, though it carries relationship risk. A short-term loan from your employer (if available) is usually interest-free. A 401(k) loan lets you borrow against your retirement savings at a low rate, but you risk penalties if you leave your job before paying it back.

How cash advances affect your credit score

A cash advance increases your credit utilization ratio immediately. If you use 30% of your credit limit before the advance and then take out a $500 cash advance on a $5,000 limit, you're now using 40% of your limit. Credit scoring models penalize high utilization, so your score may drop by 10 to 50 points depending on how much you advance.

The impact is temporary — your score recovers as you pay down the balance — but it matters if you're about to apply for a mortgage, car loan, or other credit. Lenders pull your score right before approval, so a cash advance taken days before a loan application can cost you a higher interest rate or outright denial.

The cash advance itself doesn't appear as a separate line item on your credit report, but it shows up as part of your total credit card balance. Creditors see it as revolving debt, which is riskier than installment debt like a car loan.

Frequently Asked Questions

Can I use a credit card to get cash at a store checkout?

No. Stores that offer cash back (like grocery stores and pharmacies) only allow debit cards or prepaid cards, not credit cards. Your only options are ATMs, bank tellers, and cash advance services. Some stores have ATMs on-site, which may be faster than leaving to find one.

What happens if I don't pay back a cash advance?

The balance carries over to the next month with interest, and you're charged late fees if you miss the minimum payment. The debt stays on your credit report for seven years, and your credit score drops. Your card issuer can also close your account or lower your credit limit if you don't pay.

Is there a way to avoid the cash advance fee?

No. The fee is mandatory and applies to every cash advance, regardless of amount or timing. Some cards offer no cash advance fee as a promotional feature, but these are rare and usually limited to new cardholders. Check your card's terms to see if yours is one of them.

Can I take a cash advance on a secured credit card?

Yes, but the cash advance limit is usually very low — often $100 to $300 — because secured cards are designed for people rebuilding credit. The fees and interest rates are the same as unsecured cards, so the cost is proportionally higher on a smaller amount.

What's the difference between a cash advance and a balance transfer?

A cash advance gives you physical cash and charges a higher interest rate immediately. A balance transfer moves debt from one card to another and often offers a 0% introductory rate for several months. Balance transfers are for existing debt; cash advances are for getting cash.