A cash advance lets you borrow money against your credit limit, but it costs more than a regular purchase

A cash advance is a withdrawal of cash using your credit card. You go to an ATM, a bank teller, or a convenience store and pull out money the same way you would with a debit card — except the money comes from your credit card's available balance, not your bank account. You pay back what you borrowed plus interest and fees, just like any other credit card charge.

The catch: cash advances are expensive. They charge a separate fee (usually 3% to 5% of the amount you withdraw), and the interest rate is higher than your regular purchase APR. Interest starts accruing immediately — there is no grace period like there is for purchases. If you need cash, a personal loan, a bank overdraft, or even a payday loan from a credit union may cost less.

Key Takeaways

  • Cash advances charge an upfront fee of 3% to 5% plus a higher interest rate that starts accruing the day you withdraw the money.
  • You can get a cash advance at an ATM, bank branch, or convenience store by using your credit card PIN or by asking a teller.
  • Most cards have a cash advance limit that is lower than your credit limit, and you can find yours by calling the card issuer or checking your online account.
  • The total cost of a cash advance grows quickly because interest compounds daily, so paying it back as soon as possible saves money.

Where and how to withdraw a cash advance

You have three main ways to get cash from your credit card. The easiest is an ATM — insert your card, enter your PIN, and withdraw money just as you would from a bank account. Most ATMs accept credit cards, though some charge an additional ATM operator fee on top of your card issuer's cash advance fee.

You can also go to a bank branch — any bank, not just the one that issued your card. Tell the teller you want a cash advance on your credit card. Bring your card and a photo ID. The teller will process it the same way they would a debit card withdrawal. Some banks charge their own fee for this service.

A third option is a convenience store or grocery store that offers cash advances. You hand over your card, they run it through a machine, and you sign a receipt. This method often charges the highest fees because the store itself adds a fee on top of your card issuer's fee.

Understanding the fees and interest rate

Every cash advance comes with two separate costs. The cash advance fee is a flat percentage of the amount you withdraw — typically 3%, 4%, or 5%, depending on your card. If you withdraw $500 and the fee is 4%, you pay $20 upfront. Some cards cap the fee at a dollar amount (for example, $10 minimum, $50 maximum), so a small withdrawal might cost $10 and a large one might cost $50 regardless of the percentage.

The second cost is interest. Your cash advance APR is almost always higher than your purchase APR — often 5 to 10 percentage points higher. If your purchase rate is 18%, your cash advance rate might be 25%. Unlike purchases, there is no grace period: interest starts accruing the day you withdraw the money. If you carry the balance for a month, you pay roughly one-twelfth of the annual rate.

To estimate the total cost: a $500 cash advance at 4% fee plus 25% APR costs $20 in fees plus roughly $10 in interest for one month (25% ÷ 12 months = about 2% per month on $500). After one month, you owe $530. If you carry it for three months, interest alone adds about $31.

Finding your cash advance limit

Your credit card has a cash advance limit separate from your overall credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. This limit is set by your card issuer and is usually lower because cash advances are riskier for the bank — they are unsecured loans with no collateral.

To find your cash advance limit, log into your online account or call the customer service number on the back of your card. The representative can tell you the exact amount. Some card issuers show this limit in your online dashboard under "Account Details" or "Credit Limits." If you do not see it listed, ask the representative directly.

You can request a higher cash advance limit, but the issuer is not required to grant it. A higher limit may require a hard inquiry into your credit, which temporarily lowers your credit score by a few points.

How cash advances affect your credit score

A cash advance counts as a balance on your credit card, so it increases your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 limit and take a $1,000 cash advance, your utilization jumps to 20%. High utilization (above 30%) can lower your credit score.

The cash advance itself does not appear separately on your credit report — it shows up as part of your credit card balance. However, if you miss a payment or carry the balance for a long time, the late payment or high balance will damage your score just as any other credit card debt would.

Paying back the cash advance quickly minimizes the damage. If you pay it off within a few days or a week, the utilization spike is temporary and has little lasting effect on your score.

Cheaper alternatives to a cash advance

Before you use a cash advance, consider whether another option costs less. A personal loan from a bank or credit union usually has a lower interest rate than a cash advance APR, even if your credit is not perfect. The loan is also installment-based, so you know exactly how much you pay each month and when you will be done.

If you have a bank account, an overdraft or overdraft line of credit may be cheaper than a cash advance, depending on the overdraft fee and how long you carry the balance. Some banks charge a flat fee per overdraft ($25 to $35) rather than a percentage, which can be less expensive for small amounts.

A credit union payday loan is another option if you are a member. Credit unions often cap payday loan rates at 28% APR by law, which is lower than many cash advance rates. The loan is due in full on your next payday, so it is short-term, but the cost is often lower than a credit card cash advance.

If you have a 0% introductory APR on purchases, a balance transfer from another card or a cash advance check (if your card offers one) might be cheaper, though these also charge fees. Read the terms carefully — the 0% rate may not apply to cash advances.

Steps to pay back a cash advance quickly

The longer you carry a cash advance, the more interest you pay. Make it a priority to pay it back as soon as you can. When you make a payment to your credit card, the issuer applies it to your balance in a specific order set by law: first to the highest-APR debt (usually the cash advance), then to lower-APR debt (purchases). This is good news — your payment goes toward the expensive cash advance first.

Set up a payment as soon as you withdraw the cash, even if you can only pay part of it back immediately. If you withdrew $500 and can pay $200 right away, do it. The remaining $300 will still accrue interest, but you have reduced the amount that does. Make another payment a week or two later if you can.

If you cannot pay it back within a month, reconsider whether you should have taken the cash advance in the first place. At that point, the interest and fees are already eating into your budget, and carrying it longer only makes it worse.

Frequently Asked Questions

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

Technically yes, but it is expensive. You pay the cash advance fee and high interest rate, then use that cash to pay another card. You are paying fees and interest on money you are moving between cards. A balance transfer (moving the balance directly from one card to another) is cheaper because it usually charges a lower fee and may have a 0% introductory rate.

What happens if I do not pay back a cash advance?

It becomes part of your credit card debt. If you miss payments, your credit score drops, the issuer may charge late fees, and the interest keeps accruing. After 180 days of missed payments, the issuer may charge off the debt and sell it to a collection agency. You could be sued for the amount owed.

Do I need a PIN to get a cash advance?

At an ATM, yes — you need your credit card PIN. At a bank teller or store, you usually do not need a PIN; you show your ID and sign a receipt. If you do not know your credit card PIN, call the card issuer to set one up before you try to use an ATM.

Can I get a cash advance if my card is maxed out?

No. A cash advance counts against your available credit, so you can only withdraw up to your available balance. If your credit limit is $5,000 and you have already charged $4,800, you can only take a $200 cash advance (assuming your cash advance limit is at least $200).

Is there a daily limit on how much I can withdraw?

Yes. Most card issuers set a daily ATM withdrawal limit separate from your cash advance limit — often $500 to $1,000 per day. You can withdraw more by visiting a bank teller instead of an ATM, or by making multiple withdrawals on different days. Call your card issuer to ask about your specific daily limit.