Yes, you can take cash out of a credit card, but it costs more than a regular purchase
A cash advance lets you withdraw money from an ATM or get cash back at a bank using your credit card. The money comes from your credit limit, just like a purchase does. But unlike buying something, a cash advance charges you a fee upfront and starts charging interest immediately — there is no grace period where you pay nothing.
Most credit card companies charge between 3% and 5% of the amount you withdraw, plus a flat fee of $2 to $10 per transaction. If you take out $500, you might pay $15 to $25 in fees alone before interest kicks in. The interest rate on cash advances is usually higher than the rate on regular purchases — often 2% to 3% higher — and it starts accruing the day you withdraw the money.
Because of these costs, a cash advance should be a last resort, not a regular way to get spending money. But if you need cash urgently and have no other option, understanding how it works helps you make the decision with open eyes.
Key Takeaways
- Cash advances charge an upfront fee (usually 3% to 5% of the amount) plus a higher interest rate than regular purchases, with no grace period.
- You can withdraw cash at an ATM, get it from a bank teller, or request it at a store, depending on what your card issuer allows.
- The interest starts accruing immediately, so the longer you carry the balance, the more you pay in total.
- Paying off a cash advance quickly is critical because the interest rate is steep and compounds daily.
Where and how to withdraw cash from your credit card
The most common way is to use an ATM. Insert your credit card, enter your PIN (which you may need to set up first if you have never taken a cash advance), and withdraw the amount you need. Your card issuer sets a daily limit on how much you can withdraw — this is often lower than your total credit limit and varies by card.
You can also visit a bank branch and ask a teller for a cash advance. Bring your credit card and a photo ID. Some banks charge an extra fee for this service on top of the cash advance fee your card issuer charges.
A few card issuers allow you to request cash back at a store when you make a purchase, though this is less common with credit cards than with debit cards. Check your card's terms or call the customer service number on the back to see what methods your specific card supports.
Understanding the fees and interest that apply
The cash advance fee is charged the moment you withdraw the money. It is calculated as a percentage of the amount withdrawn — typically 3% to 5% — with a minimum fee (often $2 to $5) and sometimes a maximum. A $200 withdrawal at 4% costs $8 in fees. A $1,000 withdrawal at 3% costs $30.
The interest rate on a cash advance is separate from the rate on purchases. While a purchase might carry an APR of 18%, a cash advance on the same card might be 21% or 22%. This higher rate applies only to the cash advance balance, not to other purchases on the card.
Interest accrues daily from the moment you withdraw the cash. If you take out $500 at 21% APR, you are charged roughly $2.88 per day in interest. After 30 days without paying it back, you owe about $86 in interest alone, on top of 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 take out a $1,000 cash advance, you have $4,000 left to use. The cash advance also appears on your credit report as a balance owed, which can raise your credit utilization ratio — the percentage of your available credit you are using.
A higher utilization ratio can lower your credit score slightly, especially if you are already using a large portion of your limit. The effect is temporary and reverses as you pay down the balance, but it is worth knowing if you are planning to apply for a loan or another credit card soon.
The cash advance itself does not show up separately on your credit report — it is just part of your overall credit card balance. But the fact that you owe money on the card is reported, and the higher interest rate means the balance grows faster if you do not pay it off quickly.
Why paying off a cash advance quickly matters
Because the interest rate is high and starts immediately, every day you carry a cash advance balance costs you money. A $500 cash advance at 21% APR costs about $2.88 per day in interest. Over three months, that is roughly $259 in interest charges — more than half the original amount.
If you have other credit card balances, your payment goes to the lowest-interest balance first (by law). This means if you have a regular purchase at 18% APR and a cash advance at 21% APR, your payment reduces the purchase balance first, leaving the cash advance to accrue interest longer. Pay the cash advance balance separately and in full as soon as you can.
If you cannot pay it back within a few weeks, a cash advance is not the right tool. A personal loan from a bank or credit union, a payment plan with a creditor, or borrowing from family are all cheaper options.
Alternatives to a cash advance
If you need cash but want to avoid the high fees and interest, consider these options first:
- A personal loan from a bank or credit union usually has a lower interest rate than a cash advance and charges no upfront fee. The approval process takes a few days to a week.
- A payday loan is fast but expensive — often more expensive than a cash advance. Use this only if you will repay it within two weeks and have no other option.
- Borrowing from family or friends costs nothing if you agree on terms and stick to them. Put the agreement in writing to avoid misunderstandings.
- A line of credit from your bank, if you have an existing relationship with them, may offer a lower rate than a cash advance.
- Selling something you own or picking up extra work for a few weeks avoids debt altogether.
What happens if you cannot pay back the cash advance
If you carry the balance unpaid, interest compounds daily and the debt grows. After 30 days, your card issuer may report the account as delinquent to the credit bureaus, which damages your credit score. After 60 days, they may freeze your card. After 180 days, they may charge off the account and sell the debt to a collection agency.
Once a collection agency owns the debt, they can contact you by phone and mail to demand payment. If you ignore them, they may file a lawsuit. A judgment against you can lead to wage garnishment or a bank account levy, depending on your state's laws.
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 pause interest temporarily. It is not a may provide, but asking costs nothing.
Frequently Asked Questions
What is the difference between a cash advance and a regular purchase?
A regular purchase has a grace period — usually 21 to 25 days — where you pay no interest if you pay the full balance by the due date. A cash advance charges a fee immediately and starts charging interest the same day, with no grace period. The interest rate is also higher.
Can I use a credit card to withdraw cash from any ATM?
Most ATMs accept credit cards, but your card issuer may charge an extra fee if the ATM is not owned by your bank. Check your card's terms to see if there are restrictions. Some issuers limit the number of cash advances you can make per day or month.
Does a cash advance show up differently on my credit report?
No, a cash advance appears as part of your overall credit card balance. It does not show up as a separate line item. But the balance itself is reported, which affects your credit utilization ratio and your credit score.
What if I need cash but do not have a PIN for my credit card?
You can set up a PIN by calling your card issuer or logging into your online account. The process usually takes a few minutes. Once you have a PIN, you can use an ATM. If you need cash before the PIN arrives, visit a bank branch and ask a teller for a cash advance instead.
Is there a limit to how much I can withdraw?
Yes. Your card issuer sets a daily cash advance limit, which is often lower than your total credit limit. This limit varies by card and by issuer. Check your card's terms or call customer service to find out what your limit is.