You can take cash out of a credit card, but it is not the same as using the card to buy something

A cash advance is when you withdraw money directly from your credit card's available balance, either at an ATM, a bank teller, or sometimes through a convenience check the card issuer sends you. The money goes into your pocket or bank account as actual cash, not a purchase credit. This is different from a regular purchase because the card company treats it as a loan to you when ready, not a transaction you can dispute later.

The catch is that cash advances cost significantly more than regular purchases. You pay an upfront fee (usually 3 to 5 percent of the amount withdrawn), a higher interest rate than your purchase APR, and interest starts accruing the moment you withdraw the money — there is no grace period like there is for purchases. If you need cash, a personal loan, a debit card withdrawal, or even a payday loan from a credit union will almost always be cheaper.

Key Takeaways

  • Cash advances charge an upfront fee of 3 to 5 percent plus a higher interest rate than purchases, with interest starting when ready.
  • You can withdraw cash at ATMs using your PIN, at bank tellers with your card and ID, or through convenience checks mailed by your issuer.
  • The interest rate for cash advances is typically 5 to 10 percentage points higher than your purchase APR and varies by card and issuer.
  • Your available cash advance limit is often lower than your total credit limit and is set separately by the card issuer.
  • If you need cash regularly, a personal loan or credit union line of credit will cost far less over time.

How to withdraw cash from your credit card

The most common method is using an ATM. Insert your credit card, enter your PIN (which you may need to set up first if you have never done a cash advance), and select the withdrawal amount. The ATM will dispense cash and charge your credit card account when ready. Most card issuers allow ATM withdrawals up to your cash advance limit, which is often $500 to $2,500 but varies by card and your account history.

You can also visit a bank branch — yours or any bank that accepts your card — and ask a teller for a cash advance. Bring your card and a photo ID. The teller will process the withdrawal and give you cash on the spot. Some card issuers also mail convenience checks that you can write like regular checks to yourself or deposit into a bank account. These checks work like a cash advance but let you move the money to your checking account instead of withdrawing it as cash.

Before you attempt any withdrawal, call the customer service number on the back of your card or log into your online account to confirm your cash advance limit. This limit is separate from your overall credit limit and is often much lower. If you try to withdraw more than your limit allows, the ATM or teller will decline the transaction.

What fees and interest rates you will pay

Every cash advance comes with an upfront fee charged to your account when ready. This fee is typically 3 to 5 percent of the amount withdrawn, though some cards charge a flat fee (like $10) if that is higher. A $500 cash advance at 4 percent costs $20 in fees alone, before any interest.

The interest rate is where the real cost accumulates. Cash advances carry a separate, higher APR than purchases — often 5 to 10 percentage points above your purchase rate. If your purchase APR is 18 percent, your cash advance APR might be 25 percent. Unlike purchases, which have a grace period (usually 21 to 25 days before interest starts), interest on cash advances begins accruing the day you withdraw the money. There is no grace period.

The math adds up quickly. A $500 cash advance at 25 percent APR costs about $10 in interest per month if you pay only the minimum. If you carry the balance for six months, you will have paid roughly $60 in interest plus the original $20 fee — $80 total on a $500 withdrawal. A personal loan for the same amount would cost far less.

Your cash advance limit versus your credit limit

Your card issuer sets a cash advance limit that is separate from your overall credit limit. This limit is often 20 to 50 percent of your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $1,500. The issuer decides this limit based on your credit history, income, and account performance.

When you take a cash advance, it counts against both your cash advance limit and your overall credit limit. A $500 cash advance reduces your available credit by $500 on both counts. This means you cannot use that $500 for purchases until you pay back the cash advance.

You can request a higher cash advance limit by calling customer service, but the issuer is not required to grant it. Some issuers will increase it if you have a good payment history; others will not increase it at all. Check your account online or call to find out what your current limit is before you need cash.

Cheaper ways to get cash when you need it

A personal loan from a bank or credit union is almost always cheaper than a cash advance. Personal loans have a fixed interest rate (often 8 to 15 percent for borrowers with good credit), no upfront fee, and a set repayment schedule. You know exactly what you will pay each month. A $500 personal loan at 12 percent over 12 months costs about $32 in interest — far less than the $80 you would pay for a credit card cash advance.

If you have a checking account, ask your bank about a line of credit or overdraft protection. Some banks offer small lines of credit tied to your account at rates lower than credit card cash advances. A credit union, if you are a member, often has even lower rates on personal loans and lines of credit.

If you need cash for an emergency and have no other option, a payday loan from a credit union (not a payday lender) is regulated and capped at lower rates than a cash advance in many states. Still, avoid both if you can. The best option is to build an emergency fund so you do not have to borrow at all.

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

A cash advance does not directly hurt your credit score, but it can indirectly damage it in two ways. First, it increases your credit utilization ratio — the percentage of your available credit you are using. If you have a $5,000 limit and take a $500 cash advance, your utilization jumps from 0 percent to 10 percent. High utilization (above 30 percent) can lower your score. Second, if you carry the balance and miss payments, late payments will damage your score significantly.

The hard inquiry the issuer may run to increase your cash advance limit (if you request one) can also lower your score by a few points, though the effect is temporary. Paying off the cash advance quickly — within a month or two — minimizes the damage to your score and keeps interest costs low.

Frequently Asked Questions

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

Most ATMs that accept Visa or Mastercard will process a cash advance, but not all. ATMs owned by your card issuer's bank are most reliable. Out-of-network ATMs may charge an additional fee on top of your card's cash advance fee. Check your card's terms or call customer service to confirm which ATMs accept your card.

What is the difference between a cash advance and a balance transfer?

A cash advance gives you actual cash and charges high fees and interest when ready. A balance transfer moves debt from one credit card to another, usually at a lower promotional rate for a set period. Balance transfers are for moving existing debt; cash advances are for getting cash in hand.

Do I have to pay back a cash advance before my regular purchases?

No. Your payment goes toward your entire balance, but the cash advance portion accrues interest faster because there is no grace period. Paying the cash advance off first makes sense because it costs more in interest, but your card issuer will not force you to do so.

Can I take a cash advance if I have a zero balance on my card?

Yes, as long as you have available credit and your cash advance limit allows it. The cash advance creates a new balance on your card, which then accrues interest when ready.

What happens if I cannot pay back a cash advance?

If you miss payments, the issuer will charge late fees, your interest rate may increase, and the missed payment will appear on your credit report and lower your score. The debt will not go away and will continue to accrue interest. Contact your card issuer when ready if you cannot pay to discuss options like a hardship plan.