Yes, you can pull cash off a credit card, but it is not the same as using it to buy something

You can withdraw cash from a credit card at an ATM, through a bank teller, or sometimes at a store checkout. The transaction is called a cash advance. The moment you do it, your credit card company charges you a fee — usually 3 to 5 percent of the amount you withdraw — and starts charging you interest right away, with no grace period like you get on purchases. This means a $200 cash advance can cost you $6 to $10 just to take it out, plus interest that starts accruing when ready.

The reason it costs more is that the credit card company sees a cash advance as riskier than a purchase. When you buy something, the merchant guarantees the transaction. When you withdraw cash, there is no may provide — you could spend it on anything, lose it, or be unable to repay it. So the company protects itself by charging higher fees and interest rates.

Key Takeaways

  • A cash advance charges a fee (usually 3 to 5 percent) the moment you withdraw the money, plus interest that starts when ready with no grace period.
  • The interest rate on a cash advance is typically higher than the rate on regular purchases, sometimes by 5 to 10 percentage points.
  • You can get a cash advance at an ATM using your credit card PIN, at a bank teller, or sometimes at a store checkout.
  • If you need cash, a debit card, personal loan, or credit card purchase (which has a grace period) are usually cheaper options.

Where the money comes from and how fast you get it

When you withdraw cash from an ATM using your credit card, you are borrowing from your credit card company's cash reserve, not from your bank account. The money appears in your hand when ready, just like a debit card withdrawal. The credit card company then adds the amount to your credit card balance, along with the cash advance fee.

If you go to a bank teller instead of an ATM, the process is the same — you hand over your credit card, they give you cash, and the amount plus fee gets added to your balance. Some stores also offer cash back at checkout when you use a credit card, though this is less common and depends on the store's policy.

The fees and interest rates that make cash advances expensive

A cash advance fee is charged the moment you take the money out. Most credit card companies charge either a flat fee (like $5 or $10) or a percentage of the amount (usually 3 to 5 percent), whichever is higher. So if you withdraw $100, you might pay $5 flat or 3 percent ($3), whichever costs more. If you withdraw $500, you pay either $5 flat or 5 percent ($25), whichever is higher — so you pay $25.

The interest rate on a cash advance is separate from your regular purchase rate. While a purchase might have an interest rate of 15 to 20 percent, a cash advance might be 20 to 30 percent. More importantly, interest on a cash advance starts the day you withdraw it — there is no grace period. On a purchase, you typically have 21 to 25 days before interest kicks in. On a cash advance, interest starts when ready.

This means if you withdraw $200 and pay it back in full the next month, you will still owe interest for that entire month, plus the upfront fee. The total cost could easily be $30 to $50 for borrowing $200 for 30 days.

How a cash advance affects your credit score

A cash advance counts toward your credit utilization ratio — the percentage of your available credit that you are using. If you have a $5,000 credit limit and take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization can lower your credit score, even if you pay the balance off quickly.

The cash advance itself does not show up separately on your credit report. It is just part of your credit card balance. But if you carry the balance for several months, the interest charges will make the balance grow, which keeps your utilization high and keeps dragging down your score.

When a cash advance might make sense

A cash advance is rarely the cheapest way to borrow money, but there are situations where it might be your only option. If you need cash when ready and have no other way to get it, a cash advance is faster than a personal loan (which takes days to process). If you are in an emergency and the fee is smaller than the cost of not having cash, it might be worth it.

But before you take a cash advance, consider the alternatives. A personal loan from a bank or credit union usually has a lower interest rate and no upfront fee. A debit card withdrawal costs nothing if you have money in your checking account. A credit card purchase has a grace period and a lower interest rate if you do carry a balance. Even a payday loan, which is expensive, might be cheaper than a cash advance if you repay it within two weeks.

How to take a cash advance if you decide to do it

To withdraw cash at an ATM, insert your credit card and enter your PIN (the same PIN you use for your debit card, or one you set up with your credit card company). Select "cash withdrawal" or "cash advance" and enter the amount. The ATM will show you the fee before you confirm, so you can see the total cost before you proceed.

To get a cash advance from a bank teller, go to any branch of your credit card company's bank (or a partner bank) during business hours, hand over your credit card and ID, and tell them you want a cash advance. They will process it on the spot and give you cash. To get cash back at a store, use your credit card at checkout and ask for cash back — the amount gets added to your purchase total.

After you take the cash advance, the amount and fee show up on your credit card statement within a few days. The interest starts accruing when ready, so the sooner you pay it back, the less interest you will owe.

Frequently Asked Questions

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

No. A cash advance counts toward your credit limit, so you can only withdraw up to your available credit. If your limit is $5,000 and you have already charged $4,800, you can only take a $200 cash advance. Some credit card companies set a separate cash advance limit that is lower than your total credit limit.

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

The balance stays on your credit card and interest keeps accruing at the higher cash advance rate. If you miss payments, the credit card company can report it to the credit bureaus, which damages your credit score. They can also charge late fees and eventually take legal action to collect the debt.

Is a cash advance the same as a balance transfer?

No. A balance transfer moves debt from one credit card to another (usually to a card with a lower interest rate). A cash advance withdraws cash from your credit card. Balance transfers also have fees and higher interest rates, but they are a different transaction.

Can I use a credit card to withdraw cash from my own bank account?

No. A credit card is a borrowing tool, not a debit card. If you want to access your own money, use your debit card or go to an ATM with your debit card. Using a credit card always means you are borrowing money from the credit card company.