The three ways to turn a credit card into cash
You can get cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer to move debt from one card to another, or a cash-like purchase using convenience checks or peer-to-peer payment apps. Each one costs differently and affects your credit differently, so the right choice depends on what you need the money for and how quickly you need it.
A cash advance is the most direct method. You go to an ATM, bank, or convenience store, insert your card, and withdraw cash up to your credit limit. The money hits your account immediately. But you pay for this speed: cash advances charge a fee (usually 3 to 5 percent of the amount withdrawn) plus a higher interest rate than regular purchases—often 20 to 30 percent, starting immediately with no grace period.
A balance transfer moves an existing debt from one card to another, usually one offering a lower rate for a set period. This works only if you already owe money elsewhere and want to consolidate it. A balance transfer fee (typically 3 to 5 percent) applies upfront, but the lower rate can save you money over time if you pay down the balance before the promotional period ends.
Cash-like purchases use convenience checks that come with your card, or apps like Venmo and PayPal where you can send money to yourself or a friend and then withdraw it. These often carry fees similar to cash advances but may have slightly lower rates depending on your card and the app.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent plus interest rates of 20 to 30 percent, with no grace period, making them expensive for short-term cash needs.
- Interest on a cash advance starts accruing the day you withdraw it, unlike purchases, which have a grace period of 21 to 25 days.
- Balance transfers work only if you already owe money on another card and want to move that debt to a lower-rate card for a set promotional period.
- Convenience checks and payment app transfers may cost less than ATM cash advances but still carry upfront fees and higher interest rates than regular purchases.
- Your credit utilization ratio increases when you take a cash advance, which can lower your credit score temporarily.
Cash advances: how the fee and interest work
When you withdraw cash at an ATM using your credit card, the card issuer charges you a cash advance fee right away. This fee is a percentage of the amount withdrawn—typically 3 to 5 percent, though some cards charge a flat dollar amount instead (like $10 minimum). If you withdraw $500, you might pay $15 to $25 just to get the cash.
On top of the fee, you pay interest on the full amount from the day you withdraw it. There is no grace period. A regular purchase might not accrue interest for 21 to 25 days if you pay your full statement balance by the due date, but a cash advance starts charging interest immediately. The interest rate for cash advances is usually higher than your purchase rate—often 5 to 10 percentage points higher. If your purchase rate is 18 percent, your cash advance rate might be 28 percent.
The math adds up quickly. A $500 cash advance with a 4 percent fee ($20) and a 25 percent interest rate costs you $20 upfront plus roughly $10 in interest for the first month if you do not pay it back. After three months, you have paid about $40 in fees and interest alone.
Balance transfers: when they make sense
A balance transfer moves debt you already owe from one card to another, usually one offering a promotional interest rate of 0 percent for 6 to 21 months. This is not a way to get new cash—it is a way to move existing debt and potentially save money on interest.
You pay a balance transfer fee upfront, typically 3 to 5 percent of the amount transferred. If you transfer $3,000, you pay $90 to $150 in fees. But if the card offers 0 percent interest for 12 months, you save the interest you would have paid on that $3,000 at your old card's rate. If your old rate was 20 percent, you would have paid $600 in interest over a year—so the $150 fee is worth it if you pay down the balance before the promotional period ends.
Balance transfers work best when you have existing credit card debt, can transfer it to a card with a lower promotional rate, and have a plan to pay it down before the rate jumps back up. If you transfer the balance but do not pay it down, you will owe interest at the regular rate (often 18 to 25 percent) on whatever remains after the promotional period ends.
Convenience checks and payment apps
Some credit card issuers send convenience checks with your statement. You write a check against your credit line, deposit it into your bank account, and the amount appears as a credit card charge. These checks typically carry a fee of 2 to 3 percent and may have a higher interest rate than regular purchases, though sometimes they are treated the same as balance transfers with a promotional rate.
Payment apps like Venmo, PayPal, and Square Cash let you send money to yourself or a friend using your credit card. You can then withdraw the money from your bank account or have your friend send it back. However, most of these apps now charge a 3 percent fee for credit card transfers, and the transaction may be treated as a cash advance by your card issuer—meaning you pay the cash advance fee and interest rate on top of the app fee.
Before using a convenience check or payment app, call your card issuer and ask how they classify the transaction. If it is treated as a cash advance, you are paying two fees (the card issuer's fee plus the app's fee) plus a high interest rate. If it is treated as a purchase or balance transfer, the cost is lower.
How cash advances affect your credit score
Taking a cash advance increases your credit utilization ratio—the percentage of your available credit you are using. If you have a $5,000 credit limit and withdraw $1,000 in cash, your utilization jumps to 20 percent. Credit scoring models like FICO weight utilization heavily, so a sudden increase can lower your score by 10 to 50 points depending on how much you withdraw and what your utilization was before.
The impact is temporary. Once you pay down the cash advance, your utilization drops and your score recovers. But if you carry the balance for months, the lower score sticks around as long as the utilization stays high.
Balance transfers and convenience checks also increase utilization, but they may have less impact if you are moving debt from one card to another (your total utilization across all cards stays the same). Payment app transfers do not typically affect your credit score because most apps do not report to the credit bureaus.
Comparing the cost of each method
| Method | Fee | Interest Rate | Grace Period | Best For |
|---|---|---|---|---|
| Cash advance at ATM | 3–5% of amount | 20–30% | None (starts immediately) | Emergency cash when no other option exists |
| Balance transfer | 3–5% of amount | 0% promotional (then 18–25%) | Promotional period (6–21 months) | Consolidating existing credit card debt |
| Convenience check | 2–3% of amount | Varies (often same as cash advance) | None or promotional (depends on issuer) | Getting cash without visiting an ATM |
| Payment app transfer | 3% app fee + possible cash advance fee | Varies (often 20–30% if treated as cash advance) | None | Sending money to others; less useful for personal cash needs |
Alternatives to getting cash from your credit card
Before you take a cash advance, consider whether you actually need a credit card for this. A personal loan from a bank or credit union often has a lower interest rate (8 to 15 percent) and no upfront fee. You borrow a fixed amount, make fixed monthly payments, and the total cost is usually less than a cash advance. The downside is that approval takes a few days, so this does not work for same-day cash needs.
A payday loan is faster (sometimes same-day) but far more expensive, with interest rates of 300 to 400 percent or higher. Avoid payday loans unless you are certain you can repay within two weeks.
If you need cash for a specific purchase, ask the merchant whether they accept payment plans or buy-now-pay-later services like Affirm or Klarna. These often have lower fees and interest rates than credit card cash advances, and they do not affect your credit utilization the same way.
Frequently Asked Questions
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is almost always a bad idea. You pay a cash advance fee and high interest rate to get the cash, then pay it toward another card. You end up paying more in fees and interest than if you had just made a regular payment or done a balance transfer. If you are trying to consolidate debt, a balance transfer is the right tool, not a cash advance.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you new cash from your credit line and starts charging interest immediately. A balance transfer moves existing debt from one card to another, usually with a promotional 0 percent interest rate for a set period. Balance transfers are for consolidating debt; cash advances are for getting cash.
Do I have to pay the cash advance fee even if I pay it back right away?
Yes. The fee is charged when you withdraw the cash, not based on how long you carry the balance. If you withdraw $500 with a 4 percent fee, you pay $20 immediately, even if you repay the $500 the next day. You do avoid most of the interest by paying quickly, but the fee is non-refundable.
Will a cash advance hurt my credit score?
It can, temporarily. A cash advance increases your credit utilization ratio, which can lower your score by 10 to 50 points. The impact fades once you pay down the balance. However, if you carry the cash advance for months, the lower score persists as long as your utilization stays high.
Can I get a cash advance on a rewards card?
Yes, but you do not earn rewards on the cash advance. You pay the cash advance fee and interest rate, and the transaction does not count toward your rewards. This makes cash advances even less attractive on a rewards card—you lose both the fee and the rewards you would have earned on a regular purchase.