The three ways to take cash out of a credit card
You can get cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer to move debt from one card to another, or a convenience check that comes with your card. Each one charges you differently and affects your credit in different ways.
A cash advance is the most direct method. You go to an ATM, insert your credit card, and withdraw cash just like you would from a debit card. The money hits your account when ready. But the cost is steep: you pay a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than you pay on regular purchases — often 25 to 30 percent. Interest starts accruing the moment you withdraw the cash, with no grace period.
A balance transfer lets you move debt from one card to another, usually one with a lower interest rate or an introductory 0 percent period. This is useful if you already owe money on a card and want to reduce what you pay in interest, but it does not put cash in your pocket. A convenience check works like a paper check attached to your credit card account — you write it to yourself or someone else, and the amount becomes a cash advance on your card, subject to the same fees and rates.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent plus interest rates of 25 to 30 percent, with no grace period before interest starts.
- Interest on a cash advance accrues when ready, making it far more expensive than a regular purchase on the same card.
- Balance transfers move debt between cards and may offer a lower rate or temporary 0 percent period, but do not give you new cash.
- Convenience checks function as cash advances and carry the same fees and interest rates as ATM withdrawals.
- Cash advances can lower your credit score because they increase your overall debt and may trigger a hard inquiry.
Why cash advances cost so much more than regular purchases
The interest rate on a cash advance is separate from your card's regular purchase rate. Even if you have a card with a 15 percent purchase APR, a cash advance on that same card might charge 28 percent. The card issuer treats cash advances as riskier because you are borrowing money directly rather than making a purchase that has a physical item or service attached to it.
The fee itself is not the biggest cost — it is the interest. If you take out $500 as a cash advance at a 5 percent fee, you pay $25 upfront. But if you carry that $500 for a month at 28 percent APR, you owe roughly $11.67 in interest that month alone. Over six months, the interest alone could exceed $35. This is why cash advances are meant to be short-term solutions, not ongoing borrowing.
Some cards offer a lower cash advance rate if you have excellent credit, but this is rare. Check your card's terms or call the issuer to find out what rate and fee explore to you specifically — they vary by cardholder.
How a cash advance affects your credit score
Taking a cash advance can lower your credit score in two ways. First, it increases your overall debt, which raises your credit utilization ratio — the percentage of your total available credit you are using. If you have a $5,000 limit and you take a $1,000 cash advance, your utilization jumps to 20 percent. Credit scoring models penalize high utilization, so your score may drop when ready.
Second, some card issuers perform a hard inquiry when you request a cash advance, especially if you are using a new card or requesting a large amount. A hard inquiry can lower your score by a few points and stays on your credit report for up to two years.
The impact is usually temporary — your score recovers as you pay down the balance and your utilization drops. But if you are planning to explore for a mortgage, car loan, or other credit in the next few months, a cash advance can work against you.
When a balance transfer makes more sense than a cash advance
If you already carry a balance on a credit card at a high interest rate, a balance transfer can save you money without the cash advance fees. You move the debt to a new card, often one with a 0 percent introductory APR for 6 to 21 months. During that period, you pay no interest, only the balance transfer fee (usually 3 to 5 percent).
The catch is that you must pay down the balance before the introductory period ends. Once it expires, the regular APR kicks in — often 15 to 25 percent. If you still owe money at that point, you start paying interest again. Balance transfers work best if you have a concrete plan to pay off the debt within the promotional window.
Balance transfers also affect your credit score similarly to cash advances — they increase your utilization and may trigger a hard inquiry. But the long-term savings on interest can outweigh the temporary score dip if you use the time wisely.
Alternatives to taking cash from your credit card
Before you use a cash advance, consider whether you actually need a credit card for this. If you need cash for an emergency, a personal loan from a bank or credit union usually charges less interest than a cash advance. Personal loans typically have APRs of 6 to 36 percent, depending on your credit, compared to 25 to 30 percent for a cash advance. You also pay a one-time origination fee rather than ongoing interest with no grace period.
A payday loan is faster but far more expensive — APRs can exceed 400 percent. A cash advance from your credit card is usually cheaper than a payday loan, but both should be last resorts.
If you need cash for a planned expense, a 0 percent introductory purchase APR card might work better. You charge the purchase to the card and pay no interest for 6 to 21 months, giving you time to pay it off without the cash advance fee. This only works if the expense is something you can charge directly — groceries, medical bills, travel — rather than cash itself.
How to request a cash advance and what to expect
To get a cash advance at an ATM, insert your credit card and select "cash advance" or "withdraw cash." You will be asked to enter your PIN — the same one you use for debit transactions. The ATM will show you the fee before you confirm. The money appears in your account when ready, but the transaction posts to your credit card statement within one to three business days.
You can also request a cash advance at a bank branch or through your card issuer's website or app. Some issuers let you transfer cash directly to your bank account, which takes one to two business days. The fee and interest rate are the same regardless of method.
Check your card's terms to find out your cash advance limit — it is often lower than your overall credit limit. If you have a $5,000 card limit, your cash advance limit might be $1,500. This limit exists to reduce the issuer's risk.
What happens if you cannot pay back a cash advance
If you carry a cash advance balance month to month, the interest compounds quickly. A $500 cash advance at 28 percent APR costs about $11.67 per month in interest alone. If you only make minimum payments, most of that payment goes toward interest, not the principal, so the balance shrinks slowly.
Unpaid cash advances also affect your credit score. After 30 days of missed payments, the issuer reports the delinquency to the credit bureaus. Your score drops significantly. After 60 days, the issuer may increase your interest rate further. After 180 days, they may charge off the account and sell the debt to a collection agency.
If you are struggling to repay, contact your card issuer before you miss a payment. Some issuers offer hardship programs that lower your interest rate or allow you to pause payments temporarily. This is better than letting the debt spiral.
Frequently Asked Questions
Can I use a credit card to withdraw cash at any ATM?
Yes, you can use your credit card at most ATMs that display your card's logo. However, some ATMs charge an additional fee on top of your card issuer's cash advance fee — sometimes $2 to $5 per transaction. Bank ATMs are usually cheaper than ATMs in convenience stores or bars.
Is there a limit to how much cash I can withdraw?
Yes. Your card issuer sets a cash advance limit, which is often lower than your overall credit limit. You can find this limit in your card's terms or by calling the issuer. Some cards allow you to request a higher limit, but this may trigger a hard inquiry.
What is the difference between a cash advance and a regular purchase?
A regular purchase has a grace period — usually 21 to 25 days — before interest accrues. A cash advance has no grace period; interest starts the day you withdraw the cash. The interest rate is also higher on cash advances. This makes cash advances far more expensive for the same amount of money.
Can I pay off a cash advance faster to reduce interest?
Yes. Any payment you make goes toward your entire balance, including the cash advance. If you pay more than the minimum, more of your payment goes toward principal rather than interest. Paying off a cash advance within a few weeks rather than months can save you significant interest.
Will a cash advance hurt my credit if I pay it back quickly?
A cash advance will lower your score temporarily because it increases your utilization ratio. But once you pay it off, your utilization drops and your score recovers — usually within a few months. The impact is smaller if you pay it back within a few weeks rather than carrying it for months.