Yes, most credit cards let you withdraw cash, but it costs more than a purchase

You can get cash from a credit card at an ATM or by asking a cashier at a store or bank. The card works like a loan: the cash advance appears on your bill just like a purchase would. But cash advances are not the same as the cash back rewards you earn on purchases. A cash advance charges you interest immediately—there is no grace period like there is for regular purchases—and it usually costs a separate fee on top of that.

If you need cash and have a credit card, you have options. Understanding how each one works helps you pick the cheapest way to get the money you need.

Key Takeaways

  • A cash advance from an ATM or bank charges interest right away, plus a fee of 3 to 5 percent of the amount you withdraw.
  • Cash back at a store checkout is free when you use a debit card, but costs the same fees as an ATM cash advance if you use a credit card.
  • Credit card cash back rewards are separate from cash advances—they are money you earn back on purchases you make, not money you borrow.
  • The interest rate on a cash advance is usually higher than the rate on regular purchases, sometimes by several percentage points.
  • If you need cash regularly, a debit card or a bank account with free ATM access costs far less than repeated credit card cash advances.

How a credit card cash advance actually works

When you withdraw cash using your credit card, the card issuer treats it as a loan to you. You owe that money back, and you start paying interest on it immediately. There is no 21-day grace period like there is when you buy something with the card.

The fee for a cash advance is usually 3 to 5 percent of the amount you take out. So if you withdraw $200, you might pay $6 to $10 in fees alone, before any interest. That fee appears on your next bill.

The interest rate on cash advances is also typically higher than the rate on regular purchases. If your card charges 18 percent APR on purchases, the cash advance rate might be 22 or 25 percent. That higher rate applies from the day you withdraw the cash.

Where you can get a cash advance

You can withdraw cash from your credit card at any ATM that displays your card's logo—Visa, Mastercard, American Express, or Discover. You enter your PIN, select the cash advance option, and the money comes out. The ATM may charge its own fee on top of your card issuer's fee, usually $2 to $3.

You can also get a cash advance at a bank branch, even if it is not your bank. Walk in, tell the teller you want a cash advance on your credit card, and they will process it. This route usually avoids the ATM operator fee, but your card issuer's fee and interest still apply.

Some stores let you get cash back when you make a purchase with a credit card. You tell the cashier you want cash back, they add that amount to your bill, and you get the cash at checkout. This is convenient, but it still counts as a cash advance—you pay the same fees and interest as an ATM withdrawal.

Cash back rewards versus cash advances

These are two completely different things, and the names can be confusing. Cash back rewards are money your card issuer gives you back based on purchases you make. If your card offers 1 percent cash back, you earn $1 for every $100 you spend. That money is yours to keep—you do not owe it back, and there is no fee or interest.

A cash advance is money you borrow against your credit limit. You have to pay it back with interest and fees. Getting a cash advance does not earn you cash back rewards on that transaction.

If you want to use your cash back rewards, you usually request a statement credit (which reduces your bill) or a deposit to your bank account. You cannot typically withdraw cash back rewards as physical cash from an ATM.

Why a cash advance costs so much

The fees and interest on a cash advance add up fast. Suppose you withdraw $300 at an ATM. Your card charges a 4 percent cash advance fee ($12), the ATM operator charges $3, and your card's interest rate on cash advances is 24 percent APR. If you pay back the $300 in one month, you owe roughly $18 in fees and interest combined. That is 6 percent of the money you borrowed.

If you carry the balance longer, the interest compounds. After three months, you could owe $27 or more in fees and interest alone. The longer you hold the cash advance, the more expensive it becomes.

Credit card companies charge these high fees and rates because cash advances are riskier for them—they have no merchant involved to verify the transaction, and borrowers who need cash advances are statistically more likely to miss payments.

Cheaper ways to get cash when you need it

If you have a debit card linked to a checking account, use that instead. Debit card cash withdrawals at ATMs are usually free or cost only $1 to $2. You are not borrowing money, so there is no interest or advance fee.

If you do not have a debit card, open a basic checking account. Most banks offer free checking with no monthly fee, and you get a debit card and access to ATMs at no cost. This is far cheaper than repeated credit card cash advances.

If you have a credit card but need cash regularly, that is a sign you should look at your budget. Borrowing cash on a credit card is expensive and usually means you are spending more than you have coming in. A financial counselor at a nonprofit credit counseling agency can help you work through this for free.

What happens if you cannot pay back a cash advance

A cash advance is a debt, just like any other credit card balance. If you do not pay it back, it damages your credit score and the interest keeps growing. Your card issuer can raise your interest rate, freeze your account, or send the debt to a collection agency.

If you are struggling to pay back a cash advance, contact your card issuer right away. Some will work with you on a payment plan or temporarily lower your interest rate. The longer you wait, the harder it becomes to catch up.

Frequently Asked Questions

Can I get a cash advance if I have a low credit limit?

Yes. Your cash advance limit is usually a portion of your credit limit—often 20 to 30 percent. So if your credit limit is $500, you might be able to withdraw $100 to $150 in cash. You can call your card issuer to ask what your cash advance limit is.

Do I have to use my PIN to get a cash advance?

At an ATM, yes. At a bank teller window, usually no—you just show your card and ID. At a store, you do not need a PIN for cash back; you just swipe or insert your card like a regular purchase.

What is the difference between a cash advance and a balance transfer?

A balance transfer moves debt from one card to another. A cash advance borrows new money against your credit limit. Both charge fees and interest, but balance transfers sometimes offer a lower introductory rate for a few months. Cash advances never do.

Can I dispute a cash advance if I did not authorize it?

Yes. If someone else used your card to get a cash advance, report it to your card issuer as fraud. You are not responsible for unauthorized charges, but you need to report it within 60 days of the statement date to get full protection.

Will getting a cash advance hurt my credit score?

Not directly. But if you carry the balance and miss payments, it will hurt your score. A cash advance also uses up part of your available credit, which can lower your score slightly if you already have high balances on other cards.