Yes, but it works differently than a debit card
You can get cash back on a credit card, but not at the checkout counter like you would with a debit card. Instead, you use a cash advance — a feature that lets you borrow money against your credit limit, just like a purchase. The card issuer gives you the cash, and you pay it back with interest.
The catch is that cash advances are expensive. You pay a fee upfront (usually 3 to 5 percent of the amount you withdraw) plus a higher interest rate than you would on regular purchases — often 20 to 30 percent, depending on your card and issuer. That interest starts accruing immediately; there is no grace period like there is for purchases. If you carry a balance, the cash advance interest gets charged every single day until you pay it off.
Because of these costs, a cash advance should be a last resort, not a convenient way to get spending money. If you need cash regularly, a debit card or ATM withdrawal from your bank account is almost always cheaper.
Key Takeaways
- A cash advance lets you withdraw cash using your credit card, but you pay an upfront fee (typically 3 to 5 percent) plus a higher interest rate than purchases.
- Interest on cash advances starts immediately with no grace period, so the longer you carry the balance, the more you pay.
- You can get a cash advance at an ATM, bank teller, or through a cash advance check from your card issuer.
- Cash advances should be used only when you have no other option, because the fees and interest make them one of the most expensive ways to borrow money.
How to get a cash advance
There are three main ways to get cash from a credit card. The first is to visit an ATM that accepts your card — most do — and withdraw cash as you would with a debit card. You will see the cash advance fee and interest rate on your next statement.
The second way is to go to a bank branch (yours or any other bank) and ask a teller for a cash advance. You will need your card and a photo ID. The teller will process it like a withdrawal and hand you the cash.
The third way is to use a cash advance check — a special check that your card issuer mails to you. You write it like a regular check and deposit it into your bank account or cash it at a store. The amount counts as a cash advance on your credit card, subject to the same fees and interest.
What the fees and interest actually cost
Let's say you take a $500 cash advance on a card with a 4 percent fee and a 25 percent interest rate. You pay $20 upfront just to get the cash. If you pay it back over three months, you will pay roughly $31 in interest on top of that fee — a total of $51 to borrow $500.
The longer you carry the balance, the worse it gets. If you take six months to pay back that same $500, you will pay about $65 in interest plus the $20 fee. That is $85 total, or 17 percent of the amount you borrowed.
Compare that to a personal loan from a bank, which might charge 10 to 15 percent interest with no upfront fee, or a payday loan (which is also expensive but sometimes cheaper than a credit card cash advance). Even a credit card purchase, which has a grace period and no upfront fee, is cheaper than a cash advance on the same card.
Your credit limit and cash advance limits
A cash advance counts against your overall credit limit. If your limit is $2,000 and you take a $500 cash advance, you have $1,500 left to spend on purchases.
Many card issuers also set a separate cash advance limit — a cap on how much you can withdraw at one time, even if you have more available credit. This limit might be $500, $1,000, or some other amount set by your issuer. You can call the customer service number on the back of your card to find out what your cash advance limit is.
When a cash advance makes sense
A cash advance is rarely the right choice, but there are a few situations where it might be your only option. If you need cash for an emergency and have no access to an ATM, a bank, or a personal loan, a cash advance is better than nothing.
If you do take one, pay it back as fast as you can. The interest clock starts immediately, so every day you carry the balance costs you money. If you can pay it off within a week or two, the total cost might be manageable. If you are going to carry it for months, the fees and interest will add up quickly.
Before you take a cash advance, ask yourself whether there is a cheaper way to get the money: a personal loan, a payday loan (despite its bad reputation, it is sometimes cheaper), borrowing from family, or using a debit card to withdraw from your own bank account.
How a cash advance affects your credit score
Taking a cash advance does not directly hurt your credit score, but it can indirectly. A cash advance counts toward your credit utilization — the percentage of your available credit that you are using. If you take a large cash advance, your utilization goes up, and a higher utilization can lower your score.
The bigger risk is carrying the balance. If you cannot pay off the cash advance quickly, you will start paying interest, and if you miss a payment, your score will drop. The best way to protect your score is to treat a cash advance like a short-term loan: get the cash, use it for what you need, and pay it back within a few weeks.
Frequently Asked Questions
Can I get a cash advance if I have a bad credit score?
Yes. A cash advance is a loan against your existing credit limit, so the card issuer has already decided you are creditworthy enough to have the card. Your score does not matter for getting the cash advance itself, only for how much you can borrow (which is capped by your credit limit and cash advance limit).
What is the difference between a cash advance and a balance transfer?
A cash advance gives you actual cash. A balance transfer moves debt from one card to another, usually at a lower interest rate. Balance transfers are meant for moving existing balances; cash advances are for getting new cash. Both count against your credit limit and both have fees.
Will my bank charge me a fee if I use an out-of-network ATM for a cash advance?
Your credit card issuer will charge you the cash advance fee (usually 3 to 5 percent). Your bank may also charge an out-of-network ATM fee on top of that. So you could pay two fees for one withdrawal. Using an ATM from your own bank or the card issuer's bank avoids the second fee.
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a bad idea. You are borrowing at a high interest rate (the cash advance rate) to pay off debt at a potentially lower rate (your other card's purchase rate). You also pay the cash advance fee upfront. It is almost always better to make a regular payment from your bank account instead.
What happens if I cannot pay back a cash advance?
The balance stays on your card and interest keeps accruing. If you miss payments, your credit score drops and the card issuer may close your account or take you to collections. If you are struggling to pay, contact your card issuer to discuss a payment plan before you fall behind.