Yes, you can take cash out with a credit card, but it costs more than a regular purchase
A cash advance is when you use your credit card to withdraw cash from an ATM or ask a bank teller for cash instead of making a purchase. The money comes from your credit line, just like a purchase does. But unlike a purchase, a cash advance charges you fees and interest that start immediately — there is no grace period where you pay nothing if you pay on time.
Most credit cards allow cash advances, but the terms vary by card and by bank. Before you take one out, you should know what it will cost you and what your options are.
Key Takeaways
- A cash advance charges a fee (usually 3 to 5 percent of the amount) plus interest that starts the day you withdraw the cash, with no grace period.
- You can get a cash advance at an ATM using your PIN, at a bank teller window, or sometimes through a convenience check your card issuer sends you.
- The interest rate on a cash advance is typically higher than the rate on regular purchases, sometimes by several percentage points.
- Your credit limit covers both purchases and cash advances combined, so a large advance reduces what you can spend on regular purchases.
- Other ways to get cash — a personal loan, a line of credit, or borrowing from a friend — often cost less than a cash advance.
What fees and interest you pay on a cash advance
When you take a cash advance, your card issuer charges you two separate costs. The first is an upfront fee, usually between 3 and 5 percent of the amount you withdraw. If you take out $500, you might pay $15 to $25 just to get the cash. This fee is added to your balance immediately.
The second cost is interest, which starts the day you withdraw the cash. Unlike a purchase, there is no grace period — you do not get 21 days or 30 days to pay it back interest-free. Interest accrues every single day until you pay off the advance. The interest rate on a cash advance is usually 2 to 5 percentage points higher than the rate on regular purchases. If your purchase rate is 18 percent, your cash advance rate might be 23 percent.
To see what your card charges, check your cardholder agreement or call the number on the back of your card. The issuer must tell you the cash advance fee and the interest rate before you take one out.
Where you can withdraw cash with your credit card
You have three main ways to get cash. The first is an ATM — you insert your card, enter your PIN, and withdraw cash just as you would with a debit card. Most ATMs accept credit cards, though some charge an additional ATM operator fee on top of your card issuer's fee.
The second way is to visit a bank teller at your card issuer's bank or at any bank that accepts your card. You hand over your card and ID, tell the teller how much cash you want, and they give it to you. This method does not charge an ATM operator fee, but your card issuer's cash advance fee still applies.
The third way is through a convenience check — a check your card issuer mails to you that you can deposit or cash. When you cash it, the amount is treated as a cash advance. This method is less common now, but some card issuers still offer it.
How a cash advance affects your credit limit and credit score
Your credit card has a single credit limit that covers both purchases and cash advances combined. If your limit is $5,000 and you take a $2,000 cash advance, you have only $3,000 left to spend on regular purchases. This matters because if you use too much of your available credit, it can lower your credit score.
A cash advance also appears on your credit report as a balance you owe, just like a purchase does. Paying it off quickly helps your score; carrying it for months hurts it. The interest charges make it more expensive to carry a balance, so the longer you wait to pay it back, the more you owe.
When a cash advance makes sense and when it does not
A cash advance is expensive, so you should use it only when you have no better option. It makes sense if you need cash urgently and you have no other way to get it — for example, if an emergency happens while you are traveling and you have no access to your bank account. In that case, paying 3 to 5 percent plus interest is worth it to solve the problem.
A cash advance does not make sense if you have other options. If you can wait a day or two, transfer money from your savings account or ask your bank for a short-term loan — both usually cost less. If you need cash regularly, a personal line of credit or a personal loan from a bank typically charges lower interest than a cash advance. Even asking a friend or family member to lend you money costs nothing.
If you are considering a cash advance because you cannot pay a bill or buy something you need, that is a sign to pause and think about your budget. A cash advance does not solve a money problem — it adds to it by charging you fees and interest.
How to pay back a cash advance
A cash advance appears on your credit card statement as a separate line item from your regular purchases. When you make a payment to your card, the payment is usually applied to the balance with the highest interest rate first — which is your cash advance. This is good: it means your payment goes toward the most expensive debt.
Pay back the cash advance as quickly as you can. Every day you carry the balance, interest accrues. If you took out $500 at a 23 percent interest rate, you are paying roughly $3.15 per day in interest alone, on top of the upfront fee you already paid. Paying it back in one or two months instead of six months saves you a significant amount of money.
Alternatives to a cash advance
Before you use your credit card to get cash, consider these other options. A personal loan from a bank or credit union usually charges 6 to 36 percent interest, which is often lower than a cash advance rate. The loan is a fixed amount with a set repayment schedule, so you know exactly what you owe and when.
A line of credit works like a credit card but usually charges lower interest. You borrow only what you need and pay interest only on the amount you use. A debit card withdrawal from your own bank account costs nothing if you have the money available. A payday loan is expensive and should be a last resort, but it is still worth comparing to a cash advance to see which costs less in your situation.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
It can, because it increases the amount of credit you are using. If you use a large portion of your available credit, your score may drop. Paying the advance back quickly helps limit the damage. The advance itself does not hurt your score — only carrying a high balance does.
Can I take a cash advance if I have a low credit limit?
Yes, as long as you have available credit. If your limit is $1,000 and you have used $600 on purchases, you can take a $400 cash advance. But remember that the advance counts against your total limit, so you will have less room to make purchases.
What happens if I cannot pay back the cash advance?
The balance stays on your credit card and interest keeps accruing. If you miss payments, your credit score drops and the card issuer may raise your interest rate or close your account. If the debt goes unpaid for a long time, the issuer may send it to a collection agency.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Most card issuers set a cash advance limit that is lower than your total credit limit — often 20 to 50 percent of your credit limit. Check your cardholder agreement or call your issuer to find out your specific limit.
Can I take a cash advance with a rewards credit card?
Yes, but you do not earn rewards on the cash advance. You earn rewards only on purchases. This is another reason cash advances are expensive — you get no benefit from the rewards program while paying higher fees and interest.