Yes, you can pull cash from a credit card, but it works differently than a debit card withdrawal
When you withdraw cash using your credit card at an ATM, you are borrowing money from your credit card issuer the same way you borrow when you make a purchase. The bank gives you the cash immediately, but you owe that money back just like any other credit card balance. The key difference from a regular purchase is that cash advances start charging interest right away — there is no grace period like there usually is for things you buy.
Most credit cards let you do this, but the terms vary by card and by bank. You will need your credit card and your PIN (the same four-digit code you use at an ATM with a debit card). If you do not have a PIN set up, you can usually request one from your card issuer before you go to the ATM.
Key Takeaways
- Cash advances charge interest from the moment you withdraw the money, with no grace period like regular purchases have.
- The interest rate on cash advances is typically higher than the rate on regular purchases, sometimes 3 to 5 percentage points more.
- Most card issuers charge an upfront fee of 3 to 5 percent of the amount you withdraw, in addition to the interest.
- You can withdraw only up to your cash advance limit, which is usually lower than your total credit limit and is set by your bank.
- The money you owe from a cash advance is treated as a separate balance and may take longer to pay off if you only make minimum payments.
The fees that come with a cash advance
When you take out a cash advance, you pay two costs right away: a cash advance fee and interest. The fee is charged as a percentage of the amount you withdraw — typically 3 to 5 percent, though some cards charge a flat dollar amount instead. If you withdraw $300 and your card charges a 5 percent fee, you owe $15 just for taking out the cash.
Interest starts accruing the same day you withdraw the money. Unlike a regular purchase, which may have a grace period (usually 21 to 25 days before interest kicks in), a cash advance has no grace period. The interest rate is also higher than your regular purchase rate. If your card charges 18 percent APR on purchases, the cash advance rate might be 23 or 24 percent. That higher rate applies only to the cash advance balance, not to purchases you make on the same card.
The total cost adds up fast. A $300 cash advance with a 5 percent fee ($15) and a 24 percent annual interest rate costs you about $6 in interest after one month if you do not pay it back. After three months, you have paid roughly $18 in interest alone, plus the original $15 fee.
How much you can withdraw and where
Your card issuer sets a cash advance limit that is separate from your regular credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. Some banks set it at 20 to 30 percent of your total credit limit; others use a different formula. You can find your cash advance limit by calling the number on the back of your card or logging into your online account.
You can withdraw cash at any ATM that displays your card's logo (Visa, Mastercard, American Express, or Discover). You can also get a cash advance at a bank teller window or at some retail stores that offer cash back. The process is the same as using a debit card at an ATM — insert your card, enter your PIN, select the amount, and take your cash.
Some ATMs charge an additional fee for using an out-of-network machine, on top of the cash advance fee your card issuer charges. If you use an ATM that is not run by your bank, you might pay $2 to $3 just for the transaction, plus your card's cash advance fee.
Why the interest rate is higher for cash advances
Credit card issuers charge more for cash advances because they see them as riskier than regular purchases. When you buy something with your card, the merchant has a record of what you bought and can dispute the charge if something goes wrong. With cash, there is no record of what you spent it on, so the bank has less protection if you cannot pay it back.
The higher rate also reflects the fact that people who take cash advances are statistically more likely to miss payments or carry a balance. Banks use pricing to manage that risk — they charge more because they expect some customers will not pay on time.
How a cash advance shows up on your bill and how to pay it
Your cash advance appears as a separate line item on your credit card statement. If you made a $300 cash advance and charged $200 in purchases, your statement shows both amounts. The cash advance balance and the purchase balance may have different interest rates and different payment schedules.
When you make a payment toward your credit card, the payment is usually applied to the balance with the lowest interest rate first — which means your regular purchases get paid down before your cash advance does. This is called the payment hierarchy, and it varies by card issuer. Some cards apply payments to the highest-rate balance first instead. Check your card's terms or call the issuer to find out how your payments are applied.
If you want to pay off a cash advance faster, you can request that your payment go toward that specific balance. Some card issuers let you do this online or by phone; others require a written request. The sooner you pay off a cash advance, the less interest you pay overall.
When a cash advance makes sense and when it does not
A cash advance is expensive and should be a last resort, not a regular way to get cash. If you need cash for an emergency and have no other option, a cash advance might be necessary. But if you can use an ATM with a debit card, withdraw cash from a bank teller, or borrow from a friend, those options cost less or nothing.
A cash advance also makes sense only if you can pay it back quickly — ideally within a month. The longer you carry the balance, the more interest you pay. If you are considering a cash advance to cover an ongoing expense (like rent or utilities), that is a sign you need a different solution, such as a personal loan, a payment plan with the creditor, or financial counseling.
Some people use cash advances to pay off other debts, but this usually backfires. You are replacing one debt with a more expensive one, and you end up paying more in total interest. A balance transfer to a card with a lower rate, or a personal loan, is almost always cheaper.
What happens if you cannot pay back a cash advance
If you do not pay your cash advance by the due date, the unpaid amount is treated like any other late credit card payment. Your interest rate may increase, a late fee is added to your bill, and the missed payment is reported to the credit bureaus. This can lower your credit score and make it harder to borrow money in the future.
If you fall behind on multiple payments, your card issuer may close your account or send your debt to a collection agency. At that point, you may face calls from collectors and legal action to recover the debt.
Frequently Asked Questions
Can I use a cash advance to pay another credit card bill?
Technically yes, but it is almost never a good idea. You are replacing one debt with a more expensive one — the cash advance rate and fees are higher than your regular purchase rate. You end up paying more in total interest and fees. A balance transfer or personal loan is cheaper if you need to move debt between cards.
Does a cash advance hurt my credit score?
Taking a cash advance itself does not hurt your score, but it can indirectly. A cash advance increases your credit utilization (the amount of your available credit you are using), which can lower your score. If you miss a payment, that definitely hurts your score. Paying on time and keeping your utilization low protects your score.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a higher interest rate and an upfront fee. A balance transfer moves debt from one card to another and usually has a lower introductory rate (sometimes 0 percent for a set period). Balance transfers are cheaper if you are moving existing debt, but they do not give you cash.
Can I get a cash advance if I have a low credit limit?
Your cash advance limit is set separately from your credit limit and is usually lower. Even if your credit limit is $500, your cash advance limit might be $100 or $200. Call your card issuer to find out what your cash advance limit is. If it is too low, you can ask them to increase it, though they may say no.
Is there a way to get cash without paying a fee?
Yes — use an ATM with a debit card, withdraw cash from a bank teller, or ask a retailer for cash back when you make a purchase. Those options are free or nearly free. A credit card cash advance always costs you a fee and interest, so it is the most expensive way to get cash.