Yes, you can get cash from a credit card, but it costs more than a regular purchase
A cash advance is when you withdraw money directly from your credit card's available credit, either at an ATM, a bank teller, or through a convenience check. The money goes into your bank account or your pocket, not toward a purchase. Unlike a regular purchase, a cash advance starts charging interest when ready — there is no grace period — and the interest rate is usually higher than your card's regular purchase rate.
The three main ways to get cash are: use your PIN at an ATM, ask a bank teller to withdraw cash against your card, or deposit a convenience check (a check your card issuer mails you) into your bank account. Each method works the same way financially: you are borrowing against your credit limit, and you owe it back with interest and fees.
Key Takeaways
- Cash advances charge interest from day one with no grace period, and the interest rate is typically 3 to 5 percentage points higher than your purchase rate.
- Most card issuers charge a flat fee (usually 3 to 5 percent of the amount withdrawn) or a minimum fee, whichever is larger.
- A $200 cash advance can cost $10 to $15 in fees alone, plus interest that begins accruing when ready.
- The cash advance counts against your credit limit, so withdrawing $500 leaves you with $500 less available credit for purchases.
How much a cash advance actually costs you
When you take a cash advance, you pay two separate charges: a cash advance fee and interest. The fee is charged once, upfront. The interest is charged every day until you pay the balance back.
The cash advance fee is usually between 3 and 5 percent of the amount you withdraw, with a minimum fee of $2 to $10. So if you withdraw $200, you might pay $6 to $10 in fees (5 percent of $200 is $10). If you withdraw $50, you might still pay the $5 minimum fee, making the fee 10 percent of your withdrawal. The fee is added to your balance when ready.
Interest starts accruing the same day. If your card's cash advance rate is 24 percent annual percentage rate (APR) and you withdraw $200, you owe roughly $0.13 per day in interest (24 percent divided by 365 days, times $200). After 30 days, that is about $4 in interest. After 60 days, about $8. The longer you carry the balance, the more interest you pay.
A $200 cash advance at a 5 percent fee plus 24 percent APR costs you $10 in fees plus roughly $12 in interest over two months — $22 total, or 11 percent of the amount you borrowed. A personal loan or payday loan may be cheaper, depending on your situation.
Where you can withdraw cash and what each option requires
Your card issuer determines which methods are available to you. Most cards offer at least one or two of these options.
ATM withdrawal: You use your card's PIN at any ATM, usually any ATM in the card issuer's network (often nationwide). You get cash when ready. You need to know your PIN; if you do not have one, you can call the number on the back of your card to set one up. Some ATMs charge an additional ATM operator fee ($2 to $3) on top of your card issuer's cash advance fee.
Bank teller withdrawal: You go to a branch of your card issuer's bank (or sometimes any bank) with your card and ID, and ask for a cash advance. The teller processes it like a withdrawal. This method is slower than an ATM but may avoid the ATM operator fee. Not all banks offer this; call ahead to confirm.
Convenience checks: Your card issuer mails you blank checks that draw against your credit line. You write a check to yourself or to someone else, deposit it, and the funds appear in your bank account in a few business days. This method is useful if you need to transfer money to your bank account rather than carry cash. Convenience checks sometimes have different fees or rates than ATM withdrawals — read the terms carefully.
How a cash advance affects your credit and available credit
A cash advance reduces your available credit dollar-for-dollar. If your credit limit is $2,000 and you withdraw $500 in cash, your available credit drops to $1,500. You cannot use that $500 for purchases until you pay it back. This matters if you rely on your card for emergencies or regular spending.
The cash advance itself does not show up separately on your credit report — it appears as part of your overall credit card balance. However, if the cash advance causes your balance to rise and your credit utilization (the percentage of your limit you are using) climbs above 30 percent, it can lower your credit score slightly. The effect is temporary and reverses once you pay the balance down.
Missing a cash advance payment has the same consequences as missing any credit card payment: late fees, a higher interest rate on your entire card balance, and damage to your credit score if the payment is 30 days or more overdue.
When a cash advance makes sense and when it does not
A cash advance is expensive, so it makes sense only in specific situations. Use one if you need cash urgently and have no other option — for example, if an ATM is broken and you need cash for a medical copay, or if you are traveling and your debit card is lost. In these cases, the convenience may be worth the fee.
A cash advance does not make sense if you are trying to pay off debt, cover a shortfall in your budget, or get cash to lend to someone else. In those situations, the interest and fees add up quickly and make your financial situation worse. If you are short on money regularly, a cash advance is a sign that you need to address your budget or find a lower-cost loan.
If you are considering a cash advance to pay another bill or debt, explore these alternatives first: a personal loan from a bank or credit union (usually 6 to 36 percent APR, depending on your credit), a payday loan (expensive but sometimes cheaper than a cash advance if you repay it within two weeks), or asking the creditor for a payment plan or extension.
How to repay a cash advance and pay the least interest
A cash advance balance is part of your overall credit card balance. When you make a payment, your card issuer applies it to your balance in a specific order set by law: first to the highest-interest debt (usually the cash advance), then to lower-interest debt (usually purchases). This is good news — your payment goes toward the expensive cash advance first.
To minimize interest, pay the cash advance back as quickly as you can. Every dollar you pay reduces the daily interest charge. If you withdrew $200 at 24 percent APR, paying it back in one week costs roughly $1 in interest; paying it back in a month costs roughly $4. The difference is small in dollar terms but adds up if you take multiple cash advances.
If you cannot pay the full balance when ready, pay as much as you can toward the cash advance portion. Ask your card issuer for an itemized statement showing how much of your balance is the cash advance and how much is purchases, so you know exactly what you are paying down.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
Not directly. The cash advance itself does not appear on your credit report. However, if it raises your credit utilization above 30 percent, your score may drop slightly. The effect is temporary — your score recovers as you pay the balance down. Missing a payment on a cash advance does hurt your score.
Can I get a cash advance if my credit is bad?
Yes. A cash advance is a feature of your existing card, so your credit score does not matter. You can withdraw cash as long as you have available credit. However, if your credit is bad, your card's interest rate is probably already high, making a cash advance even more expensive.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another (usually to a card with a lower interest rate). A cash advance withdraws cash against your credit line. Balance transfers have their own fees and rates, but they are designed for moving existing debt, not for getting cash.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is usually a bad idea. You would pay a cash advance fee on top of the interest, making the debt more expensive, not less. A balance transfer to a card with a 0 percent introductory rate is a better option if you are trying to move debt between cards.
What happens if I do not pay back a cash advance?
It becomes part of your credit card debt. You owe interest every day, late fees if you miss a payment, and your credit score drops if the payment is 30 days overdue. The debt can go to collections and affect your credit for seven years.