Yes, you can get a cash advance on most credit cards, but it costs more than a regular purchase
A cash advance lets you borrow money against your credit card's available credit and receive it as cash. You can get it at an ATM using your card's PIN, at a bank teller's window, or through a cash advance check that comes with your card. The money appears in your account within one to three business days, depending on your bank.
The catch is that cash advances carry higher costs than purchases. You pay a cash advance fee (usually 3 to 5 percent of the amount withdrawn, with a minimum fee of $5 to $10), a higher interest rate than your purchase APR, and interest starts accruing immediately — there is no grace period like there is for regular purchases. If you borrow $500, you might pay $15 to $25 just to get the cash, plus interest from day one.
Key Takeaways
- Cash advances charge a fee (typically 3 to 5 percent) plus a higher interest rate than purchases, with no grace period.
- You can withdraw cash at an ATM, bank branch, or through a cash advance check, and the money usually arrives within one to three business days.
- Your credit card's cash advance limit may be lower than your overall credit limit, so you cannot always borrow the full amount available to you.
- Cash advances count toward your credit utilization ratio and can lower your credit score if they push your total balance too high.
Where to get a cash advance and how the process works
The easiest method is an ATM. Insert your credit card, enter your PIN (which you may need to set up first if you have never used it), and withdraw the amount you need. The transaction posts to your account immediately, though the funds may take a day or two to appear in your bank account if you are using a different bank's ATM.
You can also visit a bank branch in person. Bring your credit card and a photo ID, tell the teller you want a cash advance, and they will process it on the spot. Some card issuers also mail cash advance checks with your account — you write one to yourself or a payee, deposit it like a regular check, and the amount is charged to your card as a cash advance.
A few card issuers offer cash advance transfers, where you can move money directly to your bank account through their website or app. Check your card's terms or call the number on the back to see which methods your issuer supports.
Cash advance fees and interest rates
The fee structure varies by card and issuer. Most cards charge a transaction fee of 3 to 5 percent of the amount withdrawn, with a floor of $5 to $10 — so if you withdraw $100, you might pay $5 (the minimum), but if you withdraw $500, you pay $15 to $25. Some cards charge a flat fee instead, like $10 per advance regardless of amount.
The interest rate on a cash advance is almost always higher than your purchase APR. If your card's purchase rate is 18 percent, the cash advance rate might be 25 or 28 percent. Unlike purchases, which often have a 21-day grace period before interest kicks in, cash advances accrue interest from the moment you withdraw the money. A $500 advance at 25 percent APR costs about $3.42 per day in interest.
Interest on the cash advance is calculated separately from interest on purchases, so paying down your balance does not automatically reduce the cash advance interest. You need to pay off the cash advance itself to stop the clock.
Cash advance limits and how they affect your credit
Your card issuer sets a cash advance limit that is usually lower than your total credit limit. If your card's credit limit is $5,000, your cash advance limit might be $1,500 or $2,000. You cannot borrow more than this limit, even if you have unused credit available. Check your card's terms or log into your account online to find your specific limit.
A cash advance counts toward your credit utilization ratio, which is the percentage of your available credit that you are using. If you have a $5,000 limit and a $1,000 cash advance, your utilization jumps to 20 percent. High utilization (above 30 percent) can lower your credit score, so a large cash advance may hurt your score temporarily. The impact fades once you pay the balance down.
When a cash advance makes sense and when it does not
A cash advance is rarely the best option for everyday cash needs — a debit card or ATM withdrawal from your bank account is cheaper and faster. Cash advances make sense only in specific situations: you need cash urgently and have no other way to get it, you are confident you can pay it back within a few days (before interest compounds), or you are comparing it to an even more expensive option like a payday loan or overdraft fee.
A cash advance does not make sense if you are already carrying a credit card balance, because the high interest rate will make your debt worse. It also does not make sense if you are short on money and cannot pay it back quickly — the interest will keep growing, and you will end up paying far more than you borrowed.
Alternatives to a credit card cash advance
If you need cash but want to avoid the fees and high interest, consider these options first. A personal loan from a bank or credit union typically has a lower interest rate and lets you borrow a larger amount. A balance transfer to a card with a 0 percent introductory APR can give you breathing room if you need to move debt. A line of credit from your bank may offer better terms than a cash advance.
If you have a 401(k) or similar retirement account, some plans allow you to borrow against your balance at a lower rate than a cash advance. If you own a home, a home equity line of credit (HELOC) typically has a much lower rate. Even a short-term loan from a friend or family member, if that is an option, is usually cheaper than a cash advance.
How to pay back a cash advance quickly
The faster you pay off a cash advance, the less interest you pay. Make a plan to repay it within a few days if possible. When you make a payment to your card, the issuer applies it first to the balance with the highest interest rate — usually the cash advance — so your payment goes directly toward reducing what you owe.
If you have multiple balances on your card (purchases and a cash advance), call your card issuer and ask them to apply your payment specifically to the cash advance. Some issuers will do this if you request it. Paying the cash advance off before the next billing cycle means you avoid most of the interest.
Frequently Asked Questions
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a costly move. You pay the cash advance fee and high interest rate on the money you withdraw, then use it to pay another card. You end up paying more in fees and interest than if you had just let the other card's balance sit. Most people in this situation are better off contacting their card issuer about a lower rate or a payment plan.
Does a cash advance show up differently on my credit report?
No, a cash advance appears as part of your overall credit card balance and does not show separately on your credit report. However, it does affect your credit utilization ratio, which can impact your score. Once you pay it off, the utilization drops and your score may recover.
What happens if I cannot pay back the cash advance?
The unpaid balance stays on your card and continues to accrue interest at the high cash advance rate. If you miss payments, your card issuer may report it to the credit bureaus, which will damage your credit score. After 30 days of missed payments, the issuer may freeze your account or send the debt to a collection agency.
Can I get a cash advance if my card is maxed out?
No. Your cash advance limit is separate from your purchase limit, but you still cannot borrow more than your available credit. If your card is maxed out, you have no available credit left for a cash advance. You would need to pay down your balance first.
Is there a limit to how many cash advances I can take?
Most card issuers do not limit the number of cash advances you can take, as long as you stay within your cash advance limit. However, taking multiple advances in a short time may trigger fraud alerts or cause the issuer to review your account. Some issuers may also lower your limit or close your account if they see a pattern of frequent cash advances.