Yes, you can withdraw cash from a credit card, but it works differently than a debit card withdrawal
When you withdraw cash from a credit card, you are borrowing money from the card issuer just like you do when you make a purchase. The difference is that the cash goes directly into your pocket instead of paying a merchant. This is called a cash advance.
The money you withdraw is not your own funds — it is a loan that you will owe back to the credit card company. Interest starts accruing immediately, usually at a higher rate than your regular purchase APR. You also pay an upfront fee, typically 3 to 5 percent of the amount withdrawn, charged right away.
Because of these costs, withdrawing cash from a credit card should be a last resort, not a regular habit. But if you need cash and have no other option, knowing how to do it and what it will cost you matters.
Key Takeaways
- A cash advance is a loan from your credit card issuer, not a withdrawal of your own money, and interest begins charging immediately.
- You pay an upfront fee (usually 3 to 5 percent) plus a higher interest rate than you pay on purchases, making cash advances expensive.
- You can get a cash advance at an ATM using your PIN, at a bank teller window, or through a convenience check from your card issuer.
- The cash advance amount counts toward your credit limit, so withdrawing $500 leaves you with $500 less available credit to use.
- Paying back a cash advance should be your priority because the interest rate is typically the highest charge on your card.
The three ways to withdraw cash from your credit card
The most common method is using an ATM. You insert your credit card, enter your PIN (which you may need to set up first if you have never done a cash advance), and withdraw the amount you need. The ATM will show you the fee before you confirm the transaction.
You can also visit a bank branch in person and ask a teller for a cash advance. Bring your credit card and a form of ID. The teller will process the transaction and hand you cash. This method works even if the bank is not the one that issued your card, though some banks charge an additional fee for this service.
A third option is a convenience check. Your credit card issuer may send you blank checks that draw from your credit line. You write the check to yourself, deposit it in your bank account, and withdraw the cash from there. This method takes longer because of the deposit and clearing time, but it avoids ATM fees.
What the costs actually are
Every cash advance comes with two charges: a fee and interest. The cash advance fee is a percentage of the amount you withdraw, usually between 3 and 5 percent. If you withdraw $200 and the fee is 5 percent, you owe $10 immediately. Some card issuers set a minimum fee (like $5) or a maximum fee (like $50), so the percentage may not apply to very small or very large withdrawals.
The interest rate on a cash advance is almost always higher than the rate on purchases. While a purchase APR might be 18 percent, a cash advance APR could be 25 percent or more. Unlike purchases, there is no grace period — interest starts accruing the day you withdraw the cash. If you withdraw $200 and do not pay it back for a month, you will owe roughly $4 in interest on top of the $10 fee.
Because of these two charges stacking together, a $200 cash advance can easily cost you $15 to $20 by the time you pay it back within a month. That is 7 to 10 percent of the money you borrowed.
How a cash advance affects your credit limit and credit score
The amount you withdraw counts against your credit limit immediately. If your card has a $1,000 limit and you withdraw $300 in cash, you now have only $700 available to spend on purchases. The cash advance does not reduce your limit permanently — once you pay back the $300, that $700 becomes available again.
A cash advance can affect your credit score in two ways. First, it increases your credit utilization ratio, which is how much of your available credit you are using. If you were using 30 percent of your limit before the cash advance and now you are using 60 percent, that higher ratio can lower your score slightly. Second, the cash advance itself appears on your credit report as a separate transaction type, which some scoring models view less favorably than regular purchases.
The impact is usually temporary. Once you pay off the cash advance, your utilization drops and the score recovers. But if you carry the balance for months, the damage to your score can last longer.
Why paying back a cash advance should come first
If you carry a balance on your credit card, you should prioritize paying off the cash advance before paying off regular purchases. The reason is simple: the cash advance interest rate is higher. Every dollar you put toward the cash advance saves you more money than a dollar put toward a purchase.
When you make a payment to your card, the issuer typically applies it to the lowest-interest balance first (usually purchases), then to higher-interest balances. This means your cash advance interest keeps growing while you pay down cheaper debt. To avoid this, call your card issuer and ask if you can direct your payment specifically to the cash advance. Some issuers allow this; others do not. If yours does not, paying down the entire balance faster is your best option.
When a cash advance makes sense and when it does not
A cash advance makes sense only in specific situations. If you have an emergency that requires cash and no other way to get it — no debit card, no savings account, no access to a loan — then a cash advance is better than nothing. The cost is real, but it is temporary if you pay it back quickly.
A cash advance does not make sense if you have other options. A debit card withdrawal costs nothing. A personal loan from a bank or credit union usually has a lower interest rate. Borrowing from a friend or family member costs nothing. Even a payday loan, which is expensive, is often cheaper than a credit card cash advance when you factor in both the fee and the interest rate.
Do not use a cash advance to pay another debt, to fund a purchase you cannot afford, or as a regular way to get spending money. Each use adds cost and can trap you in a cycle of borrowing.
How to avoid needing a cash advance
The best protection is having a small emergency fund — even $500 to $1,000 set aside in a savings account. This covers most unexpected cash needs without borrowing. If you do not have savings yet, start by putting aside whatever you can each month, even $25 or $50.
Keep your debit card with you and know your PIN. Most debit card withdrawals are free or cost only $1 to $3 at out-of-network ATMs, far cheaper than a cash advance. If you use a bank that has many ATM locations, you can usually withdraw cash for free.
If you find yourself needing a cash advance regularly, that is a sign your income and expenses are out of balance. Consider whether you can reduce spending, increase income, or both. A credit counselor can help you work through a budget if you are stuck.
Frequently Asked Questions
What is the difference between a cash advance and a regular credit card purchase?
A purchase is a transaction with a merchant that you pay back later. A cash advance is money you borrow directly from the card issuer and withdraw as cash. Cash advances charge a fee upfront and a higher interest rate, with no grace period. Purchases usually have a grace period before interest starts.
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is almost never a good idea. You pay a 3 to 5 percent fee on the cash advance, then use that cash to pay another card. You end up paying more in fees and interest than if you transferred the balance directly or paid down the original card with money from your paycheck.
Does a cash advance hurt my credit score?
It can, temporarily. The cash advance increases your credit utilization ratio, which can lower your score by a few points. Once you pay it off, your score usually recovers. However, if you carry the cash advance balance for months, the damage lasts longer and the interest costs add up significantly.
What happens if I cannot pay back a cash advance?
The unpaid balance stays on your credit card and keeps accruing interest at the higher cash advance rate. If you do not pay it, it will eventually be reported as a late payment, damage your credit score, and may result in collection action. Contact your card issuer as soon as you know you cannot pay to discuss options.
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. Your card issuer can tell you your specific cash advance limit. You cannot withdraw more than that amount, and you cannot exceed your total credit limit.