Yes, you can get cash from a credit card, but it costs more than a regular purchase

You can withdraw cash using your credit card at an ATM, through a bank teller, or sometimes at a store checkout. The transaction is called a cash advance. Unlike swiping your card to buy something, a cash advance charges you a fee upfront and starts charging interest when ready — there is no grace period like there is for regular purchases.

The catch is that cash advances are expensive. You pay a fee (usually 3 to 5 percent of the amount you withdraw), plus a higher interest rate than you pay on regular purchases. If you need cash, it is almost always cheaper to use your debit card, withdraw from your own bank account, or borrow from someone you know than to take a cash advance.

Key Takeaways

  • A cash advance charges you a fee (typically 3 to 5 percent) plus a higher interest rate that starts when ready, with no grace period.
  • You can get a cash advance at an ATM, a bank teller, or sometimes at a store, but your credit card company sets a limit on how much you can withdraw.
  • Interest on a cash advance accrues from the day you withdraw it, so the longer you carry the balance, the more you pay.
  • Using your debit card, visiting your bank, or borrowing from a friend is cheaper than a cash advance in almost every situation.

How much does a cash advance cost

The cost has two parts: a one-time fee and ongoing interest. The fee is usually a percentage of the amount you withdraw — most cards charge between 3 and 5 percent. Some cards set a minimum fee (like $5 or $10) so that even a small withdrawal costs you something. A few cards charge a flat dollar amount instead of a percentage.

The interest rate on a cash advance is separate from your regular purchase rate and is almost always higher. Where a regular purchase might charge 18 percent APR, a cash advance might charge 25 or 28 percent. That rate applies from the moment you withdraw the cash, not from your statement date. If you carry the balance for a month, you pay roughly one-twelfth of that annual rate on top of the fee you already paid.

Example: You withdraw $300 from an ATM using your credit card. Your card charges a 4 percent fee ($12) and a 25 percent APR on cash advances. You owe $312 when ready. If you pay it back in 30 days, you owe roughly $312 plus $6.25 in interest — a total of about $318.25 for borrowing $300 for a month.

Where you can withdraw cash with a credit card

An ATM is the most common place. Your credit card company has a network of ATMs you can use, usually the same network your debit card uses. You insert the card, enter your PIN, and withdraw cash just like you would from a checking account. The ATM will tell you the fee before you confirm the transaction — some ATMs charge an additional fee on top of your card's cash advance fee.

You can also visit a bank branch in person and ask a teller for a cash advance. This avoids the ATM fee, though you still pay your card's cash advance fee and interest. Some grocery stores and retailers let you get cash back at checkout when you make a purchase, though this is less common with credit cards than with debit cards.

Your credit card company sets a cash advance limit that is separate from your regular credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. Check your card's terms or call the number on the back to find out what your limit is before you try to withdraw.

Why interest starts right away on a cash advance

When you make a regular purchase with your credit card, you get a grace period — usually 21 to 25 days — before interest starts. During that time, if you pay your full balance, you owe nothing extra. A cash advance does not get this grace period. Interest starts accruing the day you withdraw the cash.

This is why a cash advance is so much more expensive than a purchase, even if the interest rates were the same. If you carry a $300 cash advance for 30 days at 25 percent APR, you pay about $6.25 in interest. If you made a $300 purchase and paid it off after 30 days, you would pay zero interest because you stayed within the grace period. The same $300 costs you $6.25 more just because of how the interest is calculated.

What happens if you do not pay back the cash advance

The balance rolls over to your next statement and keeps charging interest at the cash advance rate. If you make new purchases, those go on your card too, but your payment goes toward the lowest-interest debt first — which means your cash advance keeps accruing interest while you pay down regular purchases.

If you miss a payment, your card issuer reports it to the credit bureaus, which damages your credit score. You may also face a late fee and a higher interest rate on your entire balance. If the debt goes unpaid long enough, the card issuer may close your account or send the debt to a collection agency.

Cheaper ways to get cash when you need it

If you have a debit card linked to a checking account, use that instead. There is no fee and no interest — you are just withdrawing your own money. If you do not have a checking account, visit your bank or credit union in person and withdraw from your savings account.

If you need money urgently and do not have cash on hand, ask a friend or family member to lend you the amount. Even if you pay them back with interest, it will almost certainly be less than a credit card cash advance. Some employers offer paycheck advances or loans to employees. Some nonprofits and community organizations offer emergency loans at low rates.

If you are considering a cash advance because you are short on money regularly, that is a sign to look at your budget. A cash advance is a short-term fix that makes the problem worse by adding fees and interest. If you need help with budgeting or financial counseling, the National Foundation for Credit Counseling offers free or low-cost sessions.

Frequently Asked Questions

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

You can use your card at ATMs in your card's network, which your issuer lists in your cardholder agreement or online. Using an out-of-network ATM usually adds an extra fee on top of your card's cash advance fee. Call the number on your card to find in-network ATMs near you.

Do I have to pay back a cash advance right away?

No, but you should. Interest starts when ready and compounds daily. The longer you carry the balance, the more you pay. If you can pay it back within a few days, the total cost is lower, but it is still more expensive than using a debit card.

What if my cash advance limit is lower than my credit limit?

Your card issuer sets the cash advance limit separately from your spending limit. You cannot withdraw more than that limit, even if you have available credit. You can call your issuer and ask them to raise it, but they may decline or charge you a fee.

Does a cash advance hurt my credit score?

Taking a cash advance itself does not hurt your score, but carrying a high balance does. If your cash advance pushes your total balance close to your credit limit, your credit utilization goes up, which can lower your score. Paying it off quickly keeps the damage minimal.

Can I get a cash advance from a credit card I just opened?

Usually yes, but some issuers restrict cash advances on new accounts or set a very low limit. Check your cardholder agreement or call the number on your card to find out what your cash advance limit is.