You can withdraw cash from a credit card, but it costs more than a regular purchase

A cash advance is a withdrawal of money from your credit card account, taken at an ATM or from a bank teller. The money goes into your pocket or account immediately, but the card issuer treats it differently from a purchase: you pay a fee upfront, interest starts accruing the same day (with no grace period), and the interest rate is usually higher than your purchase APR.

Most credit cards allow cash advances, but the terms vary by card and issuer. Before you use this feature, you should understand what it will cost and how the debt will be repaid.

Key Takeaways

  • Cash advances charge a fee (usually 3 to 5 percent of the amount withdrawn) and a higher interest rate than purchases, with no grace period.
  • You can withdraw cash at an ATM using your PIN, at a bank teller with your card and ID, or through a convenience check mailed by your issuer.
  • Interest on a cash advance begins accruing immediately, even if you pay your full statement balance on time.
  • Your credit card issuer sets a cash advance limit, which is often lower than your overall credit limit and may require a separate request to increase.
  • Payments toward a cash advance are applied after purchases are paid off, so the debt lingers longer if you carry a balance.

Where and how to withdraw cash from your credit card

You have three main ways to access cash from a credit card. The most common is an ATM withdrawal: insert your card, enter your PIN (which you may need to set up first), and withdraw up to your cash advance limit. The ATM operator may charge an additional fee on top of your card issuer's fee.

You can also visit a bank branch and ask a teller for a cash advance. Bring your card and a government-issued ID. The teller will process the transaction and hand you cash. Some banks charge an extra fee for this service; others do not.

A third option is a convenience check. Your card issuer may mail you checks linked to your credit card account. You write a check to yourself or a payee, deposit or cash it, and the amount is treated as a cash advance. Convenience checks carry the same fees and interest rates as ATM withdrawals.

Fees and interest rates for cash advances

Every cash advance incurs an upfront fee, charged the moment you withdraw the money. This fee is usually 3 to 5 percent of the amount withdrawn, though some cards charge a flat dollar amount instead (for example, $10 minimum). A $300 cash advance at 4 percent costs $12 in fees alone.

The interest rate on a cash advance is separate from your purchase APR and is almost always higher. While a purchase APR might be 18 percent, a cash advance APR could be 25 or 28 percent. This rate applies immediately—there is no grace period. If you withdraw $300 on day one of your billing cycle and pay it back on day 30, you still owe interest for all 30 days.

Interest accrues daily on the cash advance balance. The issuer calculates it by multiplying your daily balance by the daily rate (the annual APR divided by 365). This amount is added to your statement each month until the balance is paid off.

Your cash advance limit and how to request an increase

Your card issuer sets a cash advance limit separate from your overall credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. This limit reflects the issuer's assessment of how much cash they are willing to lend you at once.

To find your cash advance limit, log into your online account, call the customer service number on the back of your card, or check your most recent statement. If you need to increase it, call customer service and ask. The issuer will review your account and may approve an increase, deny it, or offer a smaller increase than you requested. There is no may provide they will raise it.

Requesting a higher limit does not may provide approval and may trigger a hard inquiry into your credit, which can temporarily lower your credit score by a few points.

How cash advances are repaid from your monthly payment

When you make a payment on a credit card with both purchases and a cash advance balance, the payment is applied in a specific order set by federal law. Purchases are paid first, then cash advances, then fees and interest. This means if you owe $200 in purchases and $300 in a cash advance, and you pay $400, the $400 goes toward the $200 purchase first, then $200 toward the cash advance, leaving $100 of the cash advance unpaid.

This order works against you if you carry a balance. Your cash advance debt lingers longer, accruing interest at the higher rate while you pay down purchases. To clear a cash advance quickly, you need to pay more than the minimum or make a payment specifically designated for the cash advance.

Some issuers allow you to specify which balance a payment should cover. Call customer service or check your online account to see if this option is available on your card.

When a cash advance makes sense and when it does not

A cash advance is expensive and should be used only when you have no other option. The fees and interest mean you are paying significantly more than the amount you withdrew. If you need $300 in cash, a 4 percent fee plus 25 percent annual interest costs you roughly $37 in the first month alone.

A cash advance might make sense if you face a genuine emergency—a car repair, a medical bill, or an urgent travel expense—and you have no access to cash, no savings, and no other credit available. Even then, you should plan to repay it as quickly as possible to minimize interest.

A cash advance does not make sense for everyday spending, bill payments you could make by check or transfer, or situations where you could wait a few days for a paycheck or other funds. It also does not make sense if you already carry a high balance on the card, because the new cash advance will accrue interest at a higher rate than your existing purchases.

How cash advances affect your credit score

A cash advance itself does not appear on your credit report as a separate item. However, it increases your credit utilization—the percentage of your available credit you are using. If you have a $5,000 credit limit and you withdraw a $1,000 cash advance, your utilization jumps to 20 percent. Higher utilization can lower your credit score.

The effect is temporary. Once you pay off the cash advance, your utilization drops and your score recovers. However, if you carry the cash advance balance for months, the ongoing high utilization will continue to drag down your score.

A cash advance does not trigger a hard inquiry into your credit (the withdrawal itself does not), but requesting a higher cash advance limit might. That hard inquiry can lower your score by a few points for a few months.

Alternatives to a cash advance

Before you use a cash advance, consider other ways to get cash. A personal loan from a bank or credit union usually has a lower interest rate and no upfront fee. A payday loan is faster but often more expensive than a cash advance. Borrowing from family or friends costs nothing if they agree. Selling items you no longer need, asking your employer for an advance on your paycheck, or visiting a local assistance program may also be options depending on your situation.

If you have multiple credit cards, compare their cash advance terms. Some cards offer lower fees or interest rates than others, though this is rare. If you must take a cash advance, use the card with the lowest rate and fee.

Frequently Asked Questions

Can I use a credit card to withdraw cash at any ATM?

You can use your card at most ATMs, but not all. ATMs operated by your card issuer's bank usually have no surcharge. ATMs operated by other banks or independent operators charge a fee (typically $2 to $3) on top of your card issuer's cash advance fee. Check your card's terms to see which ATMs are fee-free.

What is 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 may offer a lower introductory rate for a set period. Both are expensive, but a balance transfer can save money if you pay off the transferred balance before the promotional rate ends.

Do I have to set up a PIN to use a cash advance?

Yes, most issuers require a PIN for ATM withdrawals. If you have never set one up, call the customer service number on your card or log into your online account to create one. Some issuers allow you to use your debit card PIN if you have one, but credit card PINs are separate.

What happens if I cannot pay back a cash advance?

If you do not pay, the balance accrues interest and fees each month. After 30 days of non-payment, the issuer may report it to the credit bureaus, damaging your credit score. After 180 days, the account may be charged off and sold to a debt collector. Contact your issuer immediately if you cannot pay to discuss hardship options.

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

Most secured cards allow cash advances, though the limit is often lower than on unsecured cards. Check your card's terms or call customer service to confirm whether cash advances are available and what the fees and rates are.