Yes, you can get cash back on a credit card, but it costs you money

Most credit card issuers let you withdraw cash using your card at an ATM or ask a cashier for cash back when you make a purchase. The catch: you pay a fee for the withdrawal, and the interest rate on that cash is usually higher than your regular purchase rate. The cash advance starts accruing interest when ready — there is no grace period like there is for regular purchases.

Cash back at checkout (when you buy something and ask for extra cash) is cheaper than an ATM withdrawal because you avoid the ATM operator's fee. But both routes cost more than straightforward using your debit card or paying with the credit card itself.

Key Takeaways

  • Cash back at a store checkout costs less than an ATM withdrawal because you skip the ATM fee, but both charge you interest when ready with no grace period.
  • Your credit card issuer charges a cash advance fee (usually 3 to 5 percent of the amount) plus a higher interest rate than your regular purchase APR.
  • ATM operators charge their own fee on top of your card issuer's fee, making ATM withdrawals the most expensive option.
  • Cash advances count toward your credit limit and can hurt your credit score if they push your overall balance too high.

How cash back at checkout works

When you buy something at a store and ask the cashier for cash back, the transaction works like this: the store adds the cash amount to your purchase total, you pay the whole thing with your credit card, and the store gives you the cash. Your credit card statement shows the full amount (purchase plus cash) as a single charge.

The store does not charge you a fee for this service. Your credit card issuer does. That fee is typically 3 to 5 percent of the cash amount you withdrew, though some cards charge a flat fee instead (often $2 to $5 per transaction). Check your card's terms to know which applies to yours.

Interest on the cash portion starts the day you withdraw it. Unlike a regular purchase, which has a grace period (usually 21 to 25 days before interest kicks in), cash advances begin charging interest when ready. The interest rate is also higher — often 5 to 10 percentage points above your regular APR.

How ATM withdrawals work and why they cost more

Using your credit card at an ATM works the same way as using a debit card: you insert the card, enter your PIN, and withdraw cash. Your credit card issuer charges you a cash advance fee (the same 3 to 5 percent or flat fee as checkout cash back). But the ATM operator — whether it is your bank, another bank, or an independent ATM network — also charges you a fee, typically $2 to $3.

You pay both fees. If you withdraw $100, you might pay $5 from your card issuer plus $3 from the ATM operator, for a total of $8 in fees before interest. That is why ATM withdrawals are the most expensive way to get cash from a credit card.

Interest still starts when ready and at the higher cash advance rate. The only advantage of an ATM withdrawal over checkout cash back is convenience — you do not need to make a purchase first.

What happens to your credit score when you take a cash advance

A cash advance counts toward your credit limit just like a regular purchase does. If your limit is $5,000 and you take a $1,000 cash advance, you now have $4,000 available to borrow. This affects your credit utilization ratio — the percentage of your total credit limit you are using.

Credit scoring models treat cash advances as higher-risk borrowing than regular purchases. A high cash advance balance relative to your limit can hurt your credit score more than the same dollar amount in regular purchases would. If you already carry a high balance, adding a cash advance can push your utilization into the danger zone (above 30 percent) and damage your score.

The cash advance also shows up on your credit report as a separate transaction type, which some lenders view as a sign of financial stress. If you are explore for a mortgage or car loan soon, a recent cash advance can work against you.

When a cash advance makes sense

A cash advance is expensive, so you should use it only when you have no other option. The situations where it might make sense are rare: you need cash when ready, you have no access to your debit card or bank account, and you cannot wait for a transfer or ATM visit to your own bank.

Even then, consider alternatives first. A personal loan from your bank or a credit union usually has a lower interest rate than a credit card cash advance. A payday loan (though also expensive) might be cheaper if you can repay it within two weeks. Asking a friend or family member for a short-term loan costs nothing.

If you do take a cash advance, pay it back as fast as you can. Because interest starts when ready and the rate is high, every day you carry the balance costs you more than a regular purchase would.

How to find your cash advance limit and terms

Your credit card issuer sets a separate cash advance limit, which may be lower than your overall credit limit. You can find this limit in your card's terms and conditions, on your statement, or by calling the customer service number on the back of your card.

The same call should tell you your card's specific cash advance fee (percentage or flat amount) and your cash advance APR. These details vary by card and by issuer, so do not assume they are the same as another card you own. Write them down so you know the true cost before you withdraw.

Some cards offer a 0 percent introductory APR on purchases but not on cash advances — the cash advance rate applies when ready at the full rate. Others have no cash advance option at all. Check before you need the cash.

Frequently Asked Questions

Can I use a credit card to withdraw cash from my own bank's ATM?

Yes, but your bank will still treat it as a cash advance, not a regular ATM withdrawal. You will pay your card issuer's cash advance fee plus potentially your bank's ATM fee if you use an out-of-network machine. Using your debit card at your own bank's ATM is free and should be your first choice.

What if I cannot pay back a cash advance right away?

The balance will accrue interest at your cash advance rate every day until you pay it off. Minimum payments go toward your lowest-rate debt first, so a cash advance balance can sit and grow while you pay off regular purchases. Pay the cash advance balance before anything else to minimize the interest cost.

Does taking a cash advance hurt my credit score when ready?

The withdrawal itself does not hurt your score, but the balance does. If it pushes your overall credit utilization above 30 percent, your score will drop. The damage is temporary — your score will recover once you pay the balance down — but it happens right away.

Can I get cash back without paying a fee?

Not from a credit card. Every cash advance charges a fee from your issuer, and ATM withdrawals add a second fee from the ATM operator. Your only fee-free option is to use your debit card or to pay with your credit card and let the store keep the money.

Is a cash advance the same as a balance transfer?

No. A balance transfer moves debt from one card to another (usually with a fee and a promotional rate). A cash advance gives you physical cash and charges interest when ready at your card's cash advance rate. They are different transactions with different costs.