The main ways to get cash from 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 cash-like purchase using special checks or apps. Each one costs differently and affects your balance in different ways.

A cash advance is the most direct method. You go to an ATM, insert your credit card, and withdraw money just like you would from a debit card. The money hits your account when ready, but the credit card company charges you a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases — often 20 to 30 percent. That interest starts accruing right away, with no grace period like you get on regular purchases.

A balance transfer moves an existing balance from one credit card to another card that offers a lower rate, usually 0 percent for a set period (typically 6 to 21 months). This does not give you cash in hand, but it can save you money if you are paying interest on another card. Balance transfers also charge a fee, usually 3 to 5 percent of the amount transferred.

Cash-like purchases include convenience checks mailed by your card issuer or peer-to-peer payment apps like Venmo or PayPal. These feel like spending money rather than borrowing it, but they are treated as cash advances and carry the same fees and interest rates.

Key Takeaways

  • Cash advances charge a fee of 3 to 5 percent upfront and interest rates of 20 to 30 percent with no grace period, making them expensive compared to regular credit card purchases.
  • Interest on a cash advance starts accruing when ready, so the longer you carry the balance, the more you pay in interest charges.
  • Balance transfers move debt from one card to another and may offer 0 percent interest for a limited time, but they also charge a transfer fee.
  • Convenience checks and payment apps that function as cash advances carry the same fees and interest rates as ATM withdrawals.
  • If you need cash, a personal loan or borrowing from a friend or family member is usually cheaper than a credit card cash advance.

Why cash advances are expensive

A cash advance costs more than a regular credit card purchase in three ways. First, there is an upfront fee — usually 3 to 5 percent of the amount you withdraw. On a $500 cash advance, that is $15 to $25 before you even use the money.

Second, the interest rate is higher. While a regular purchase might carry an interest rate of 15 to 25 percent, a cash advance often jumps to 25 to 30 percent or higher. Your card issuer sets this rate, and it does not change based on your credit score or payment history the way purchase rates sometimes do.

Third, and most important, interest starts accruing when ready. With a regular purchase, you get a grace period — usually 21 to 25 days — where no interest charges if you pay the full balance by the due date. A cash advance has no grace period. Interest starts the day you withdraw the money. If you carry a $500 cash advance for one month at 25 percent annual interest, you will owe roughly $10 in interest alone, plus the original fee.

How a balance transfer works and when it makes sense

A balance transfer moves money you already owe from one credit card to another. You do not receive cash — instead, the new card issuer pays off your old card's balance, and you now owe the new card instead. The point is to move your debt to a card with a lower interest rate, usually 0 percent for a promotional period.

Balance transfers make sense if you are carrying a high-interest balance and want to pause interest charges while you pay it down. If you owe $3,000 on a card charging 24 percent interest, and you move it to a card offering 0 percent for 12 months, you save roughly $720 in interest during that year — assuming you do not add new charges to either card.

The catch is the transfer fee. Most cards charge 3 to 5 percent of the amount transferred. On a $3,000 balance, that is $90 to $150 upfront. You also need to pay down the balance before the promotional period ends, or the remaining balance will jump to the card's regular interest rate, which is often 20 to 30 percent. If you transfer $3,000 and pay down only $1,000 in 12 months, the remaining $2,000 will suddenly start accruing interest at the higher rate.

Alternatives that cost less than a cash advance

Before you use a cash advance, consider these cheaper options. A personal loan from a bank or credit union usually charges 6 to 36 percent interest, depending on your credit score and the lender. Even at the high end, that is cheaper than a cash advance, and you get a fixed repayment schedule so you know exactly when you will be debt-free.

A payday loan is faster than a personal loan but often more expensive, with fees that can equal 15 to 30 percent of the loan amount. Still, if you need money for just two weeks, a payday loan might cost less than a cash advance you carry for a month.

Borrowing from a friend or family member costs nothing if they do not charge interest, though it can strain the relationship if you do not repay on time. If you do borrow from someone you know, put the agreement in writing — how much you are borrowing, when you will repay it, and whether interest applies. This protects both of you.

If you have a 401(k) or similar retirement account, some plans allow you to borrow against your own balance. The interest rate is usually prime plus 1 or 2 percent — currently around 8 to 9 percent — and you repay yourself rather than a bank. The downside is that if you leave your job, you usually have to repay the loan within 60 days or face taxes and penalties.

How to minimize the cost if you do take a cash advance

If you have no other option, these steps will reduce what you pay. First, withdraw only what you need. Every dollar you withdraw costs you a fee plus interest, so taking $100 instead of $200 cuts your costs in half.

Second, repay it as fast as possible. Interest on a cash advance accrues daily, so every day you carry the balance costs you money. If you can repay the full amount within a week, the interest charge will be small. If you carry it for three months, the interest will be substantial.

Third, check whether your card offers a lower cash advance rate than the standard rate. Some cards charge different rates for different types of transactions. Call the customer service number on the back of your card and ask what the cash advance rate is before you withdraw.

Fourth, do not add new purchases to the card while you are paying off the cash advance. Most card issuers explore your payment to the lowest-interest balance first, so new purchases will be paid off before the cash advance. This means your cash advance sits unpaid longer, accruing more interest.

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

A cash advance does not directly hurt your credit score the way a missed payment does. However, it can indirectly lower your score in two ways. First, it increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 credit limit and take a $2,000 cash advance, your utilization jumps to 40 percent. High utilization signals to lenders that you are relying heavily on credit, and it can lower your score by 10 to 50 points depending on how high your utilization goes.

Second, if you carry the cash advance balance and make only minimum payments, you will eventually miss a payment or fall behind. A missed payment stays on your credit report for seven years and causes a much larger drop in your score — often 100 points or more.

The cash advance itself does not appear separately on your credit report. It shows up as part of your credit card balance, just like a regular purchase. What matters to your score is whether you pay it on time and how much of your available credit you are using.

Frequently Asked Questions

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

Technically yes, but it is a bad idea. You would be paying off one high-interest debt with another high-interest debt, plus you would pay a cash advance fee on top. The only scenario where this makes sense is if you are moving a balance to a 0 percent promotional card and using a cash advance to pay off the old card when ready — but even then, a balance transfer is cheaper because the fee is the same but you avoid the higher cash advance interest rate.

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

A cash advance gives you money in hand but charges a higher interest rate and has no grace period. A balance transfer moves an existing balance to a new card and usually offers 0 percent interest for a set time, but you do not receive cash. Use a cash advance if you need money now. Use a balance transfer if you are paying interest on an existing balance and want to pause that interest while you pay it down.

Do I have to pay the cash advance fee even if I repay it right away?

Yes. The fee is charged when you withdraw the money, not when you repay it. If you take out $500 and repay it the next day, you still owe the $15 to $25 fee plus one day of interest. This is why a cash advance is expensive even for short-term borrowing.

Will taking a cash advance hurt my credit score?

Not directly, but it can indirectly lower your score by increasing your credit utilization. If you carry the balance and make only minimum payments, you risk missing a payment, which will significantly hurt your score. The cash advance itself does not appear on your credit report — only your total credit card balance does.

What if I cannot repay the cash advance?

Contact your card issuer and explain your situation. Many will work with you on a payment plan or hardship program rather than let the account go to collections. Missing payments will damage your credit score and can lead to legal action, so reaching out early is important. You can also explore a personal loan or credit counseling through a nonprofit agency.