You can take money off a credit card, but it costs more than a purchase and comes with immediate interest
Taking money off a credit card is called a cash advance. When you do it, the card issuer gives you cash (or deposits it to your bank account), and you pay it back like any other balance — except with higher fees and interest rates than regular purchases.
The catch: a cash advance starts charging interest the moment you take the money. There is no grace period like there is for purchases. You also pay an upfront fee, usually 3 to 5 percent of the amount you withdraw. Because of these costs, a cash advance should be a last resort, not a convenient way to get spending money.
If you need cash, it is worth asking first whether you have other options — a personal loan, a line of credit, or even a short-term loan from family. Those almost always cost less than a cash advance.
Key Takeaways
- A cash advance charges an upfront fee (usually 3 to 5 percent) plus interest that starts immediately, with no grace period.
- The interest rate on a cash advance is typically higher than the rate on purchases, and varies by card and issuer.
- You can take a cash advance at an ATM using your PIN, at a bank teller, or through a balance transfer to your checking account.
- The money you owe on a cash advance is separate from your purchase balance, and your card issuer may apply payments to purchases first.
Where and how to take a cash advance
You have three main ways to get cash from your credit card. The fastest is an ATM withdrawal: find an ATM that accepts your card, enter your PIN, and withdraw cash up to your daily limit. Most card issuers set this limit between $300 and $500 per day, though you can call to ask if yours is different.
The second way is to visit a bank branch — yours or the card issuer's — and ask a teller for a cash advance. You will need your card and a photo ID. This method has no daily limit, so you can withdraw larger amounts, but it takes longer than an ATM.
The third way is a balance transfer to your checking account. You log into your card's app or website, request a transfer to your bank account, and the money arrives in one to three business days. This method also has no daily limit and no ATM fees, though you still pay the cash advance fee and interest.
The fees and interest you will pay
Every cash advance comes with two costs. The first is a cash advance fee, charged upfront when you take the money. This fee is usually 3 to 5 percent of the amount withdrawn, though some cards charge a flat fee (like $10) if that is higher. A $500 cash advance at 4 percent costs $20 in fees alone.
The second cost is interest, which starts accruing immediately. The interest rate on a cash advance — called the cash advance APR — is almost always higher than the rate on purchases. While a purchase APR might be 18 percent, a cash advance APR might be 25 percent or more. The exact rate depends on your card, your creditworthiness, and your issuer's current terms.
Interest compounds daily, so the longer you carry the balance, the more you owe. If you take a $500 cash advance at 25 percent APR and pay nothing for a month, you will owe roughly $510 in interest alone — plus the original $500 and the upfront fee.
How payments are applied to your cash advance
When you make a payment on your credit card, the issuer decides which balance gets paid first. Most card issuers apply payments to purchases before cash advances, which means your cash advance keeps accruing interest while you are paying down your purchases.
To pay off a cash advance faster, call your card issuer and ask them to apply your next payment directly to the cash advance balance. Some issuers will do this; others will not. If yours will not, you may need to pay off all your purchases first before the cash advance balance shrinks.
This is another reason cash advances are expensive: you can end up paying interest on the cash advance for months even if you are making regular payments.
When a cash advance makes sense
A cash advance is rarely the best choice, but there are situations where it might be the only choice. If you have an emergency that requires cash — a car repair, a medical bill, or a security deposit — and you have no other way to pay, a cash advance is faster than waiting for a personal loan to be approved.
Even then, the math matters. A $1,000 cash advance at 4 percent fee plus 25 percent APR costs you $40 upfront plus roughly $21 in interest for the first month. If you can pay it back within a month or two, the total cost is manageable. If you carry it for six months, the interest alone could exceed $125.
Before you take a cash advance, ask yourself: Can I borrow from family or friends? Can I get a personal loan from a credit union or online lender? Can I wait a few days for a paycheck? If the answer to any of those is yes, that option will almost certainly cost less.
Alternatives to a cash advance
A personal loan from a bank, credit union, or online lender usually has a lower interest rate than a cash advance and no upfront fee. The tradeoff is that approval takes a few days to a week, so it does not work for same-day emergencies.
A line of credit — sometimes called a personal line of credit or a home equity line of credit — works like a credit card but often with a lower interest rate. You draw money as you need it and pay interest only on what you use.
If you have a 401(k) or similar retirement account, you may be able to take a loan against it. The interest you pay goes back into your own account, not to a lender. However, if you leave your job before you repay the loan, you may owe taxes and penalties, so this option requires careful thought.
For smaller amounts, asking family or friends for a short-term loan — with or without interest — is often the cheapest option. If that is not possible, a cash advance is better than missing a payment or going without necessities.
How a cash advance affects your credit score
Taking a cash advance does not directly hurt your credit score, but it can indirectly. A cash advance increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 credit limit and take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization can lower your score.
The bigger risk is carrying the cash advance balance. If you miss a payment or carry the balance for months, your score will drop. The interest charges also make it harder to pay off, which means you are more likely to fall behind.
If you do take a cash advance, treat it as a short-term debt. Make a plan to pay it off within a month or two, and stick to it. This limits the damage to your score and keeps the total interest cost low.
Frequently Asked Questions
Can I take a cash advance if my credit card is maxed out?
No. A cash advance counts against your credit limit, just like a purchase does. If your card is maxed out, you cannot take a cash advance. You would need to pay down your balance first or request a credit limit increase from your issuer.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another, usually at a lower introductory rate. A cash advance gives you cash in hand. Both charge fees and interest, but a balance transfer is designed for moving existing debt, while a cash advance is for getting cash.
Do I have to use an ATM, or can I get cash at a store?
Most credit cards do not work at store checkout for cash back the way debit cards do. You are limited to ATMs, bank tellers, or online transfers to your checking account. Check your card's terms or call your issuer to confirm what methods are available on your specific card.
Will taking a cash advance hurt my credit score?
Not immediately, but it can indirectly. A cash advance increases your credit utilization, which may lower your score slightly. The real damage comes if you carry the balance and miss payments. Paying it off quickly limits the impact.
Can I avoid the cash advance fee?
No. Every cash advance comes with a fee — it is built into how the service works. The fee is usually 3 to 5 percent, and there is no way around it. Some cards offer slightly lower fees than others, but you cannot eliminate it entirely.