You can withdraw cash from a credit card, but it is not the same as using your debit card

A cash advance is a withdrawal of money from your credit card account, taken at an ATM, bank teller, or through a cash-back transaction at a store. The money comes from your credit line, not a separate bank account. You are borrowing against your credit limit, and you will owe interest on that borrowed amount from the moment you withdraw it — there is no grace period like there is for regular purchases.

Most credit card companies allow cash advances, but the process, fees, and interest rates are different from what you pay when you swipe the card for a purchase. Before you withdraw, you should know the exact cost: the cash advance fee, the interest rate that applies, and how quickly that interest starts accruing.

Key Takeaways

  • Cash advances charge interest when ready with no grace period, unlike regular credit card purchases which may have a 21-day interest-free window.
  • Most cards charge a cash advance fee of 3 to 5 percent of the amount withdrawn, plus a higher interest rate than your regular purchase APR.
  • You can withdraw cash at an ATM using your PIN, at a bank teller with your card and ID, or sometimes through a cash-back request at a store checkout.
  • The interest rate for cash advances is often 5 to 10 percentage points higher than your regular APR and begins accruing when ready.

Where and how to withdraw cash from your credit card

You have three main options for taking a cash advance. The first is an ATM: insert your credit card, enter your PIN (which you may need to set up if you have never done this before), and withdraw the amount you need. Not all ATMs accept credit cards, so you may need to use one at your card issuer's bank or a network ATM that displays your card's logo.

The second option is a bank teller. Walk into a branch of your card issuer's bank or any bank that accepts your card, bring your card and a photo ID, and ask for a cash advance. The teller will process it on the spot. This method works even if you do not have a PIN set up.

The third option is cash back at a store. Some retailers allow you to request cash back when you make a purchase with your credit card, though this is less common than it is with debit cards. Ask the cashier whether they offer this service before you attempt it.

The fees and interest rates you will pay

Every cash advance comes with at least two costs. The first is the cash advance fee, charged at the time you withdraw. This fee is typically 3 to 5 percent of the amount withdrawn, with a minimum fee of $5 to $10. If you withdraw $500, you might pay $15 to $25 just to get the cash.

The second cost is interest, which starts accruing when ready — there is no grace period. The interest rate for cash advances is almost always higher than your regular purchase APR. While your regular rate might be 18 percent, your cash advance rate could be 23 or 28 percent. Check your card's terms or call the customer service number on the back of your card to find out your specific rates before you withdraw.

Because interest starts when ready and the rate is high, a cash advance becomes expensive very quickly. A $500 withdrawal at 25 percent APR costs about $10 in interest for the first month alone, on top of the initial fee. If you carry the balance for several months, the interest will exceed the original fee.

How a cash advance affects your credit and available credit

A cash advance counts against your credit limit just like a purchase does. If your limit is $5,000 and you withdraw $500 in cash, your available credit drops to $4,500. You will still owe the $500 plus fees and interest.

The cash advance also appears on your credit report as a balance, which can affect your credit utilization ratio — the percentage of your available credit that you are using. A higher utilization ratio can lower your credit score, even temporarily. Once you pay off the cash advance, your utilization drops and your score can recover.

Cash advances do not hurt your credit score straightforward by existing, but they do signal to lenders that you are borrowing cash, which some view as a riskier behavior than regular purchases. If you are explore for a loan or mortgage soon, a recent cash advance on your report might be a factor.

When to pay back a cash advance

You should pay back a cash advance as soon as you can, because interest is accruing every single day. Unlike a regular purchase, there is no window where you can pay without interest. The sooner you pay, the less interest you owe.

Your credit card statement will show the cash advance as a separate line item from your regular purchases. Some cards explore your payments to purchases first and cash advances last, which means if you make a partial payment, it may not reduce your cash advance balance. Check your card's payment rules or call customer service to confirm how your payments are allocated.

If you are carrying a balance on your card, paying off the cash advance first is usually the better choice, because the interest rate on the advance is higher than the rate on purchases. Paying the advance first saves you more money in interest overall.

Alternatives to a cash advance

Before you take a cash advance, consider whether another option might cost less. If you need cash and have a debit card linked to a bank account, withdrawing from your bank account is free and charges no interest. If you do not have a bank account, opening one is usually free and takes less than an hour.

If you need a short-term loan, a personal loan from a bank or credit union often has a lower interest rate than a credit card cash advance, though it may take a few days to fund. A payday loan is faster but typically much more expensive than a cash advance, so it is usually not a better option.

If you are in a financial emergency and need cash urgently, contact a local nonprofit credit counselor or your city's emergency information program. Some offer short-term loans or grants at no cost or low cost. You can find these through the National Foundation for Credit Counseling or by calling 211.

What happens if you cannot pay back the cash advance

If you do not pay back the cash advance, it remains on your credit card balance and continues to accrue interest. Your minimum payment will increase to cover the advance, and if you miss a payment, your interest rate may jump to a penalty rate — sometimes 29 percent or higher, depending on your card's terms.

A missed payment also reports to the credit bureaus and damages your credit score. After 30 days of missed payments, your card issuer may freeze your account. After 180 days, they may charge off the debt and sell it to a collection agency, which will then attempt to collect from you.

If you are struggling to pay back a cash advance, contact your card issuer's customer service line as soon as possible. Some issuers offer hardship programs that lower your interest rate or allow you to pause payments temporarily. It is better to call before you miss a payment than after.

Frequently Asked Questions

Does a cash advance show up differently on my credit report than a regular purchase?

A cash advance appears as a separate balance on your credit report, but it is still part of your overall credit card debt. Lenders can see that you took a cash advance, which some view as higher risk than regular purchases. However, the cash advance itself does not create a separate credit account or appear as a different type of debt.

Can I use a credit card cash advance to pay another credit card bill?

Technically yes, but it is almost never a good idea. You would be paying a high cash advance fee and interest rate to move money from one card to another, which costs more than straightforward paying the other card's bill directly. If you are juggling multiple card balances, contact a credit counselor about a debt consolidation plan instead.

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

A cash advance gives you physical cash and charges interest when ready. A balance transfer moves debt from one card to another and may offer a lower interest rate for a promotional period. Balance transfers are designed for moving existing debt; cash advances are for getting cash. Both charge fees, but the fee structure and interest rates are different.

Do I need a PIN to take a cash advance?

You need a PIN to withdraw from an ATM, but not to get cash from a bank teller or through cash back at a store. If you have never set up a PIN for your credit card, you can usually do so by calling the customer service number on the back of your card or through your online account.

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

No. A cash advance counts against your credit limit, so you can only withdraw up to your available credit. If your card is maxed out, you cannot take a cash advance until you pay down your balance and free up credit.