You can withdraw cash from a credit card, but it costs more than a regular purchase
A cash advance is a withdrawal of money from your credit card account. Unlike a purchase, which goes on your card's balance, a cash advance puts cash in your hand or bank account. You can get one at an ATM, a bank teller, or sometimes through a money transfer service. The catch: cash advances charge higher fees and interest rates than regular purchases, and interest starts accruing when ready — there is no grace period like there is for purchases.
Most people use cash advances only when they have no other option, because the cost adds up fast. If you need cash regularly, a debit card or a bank withdrawal is almost always cheaper. But if you are in a situation where a cash advance is your only choice, understanding how it works and what it costs will help you minimize the damage.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than purchases, starting when ready with no grace period.
- You can withdraw cash at an ATM using your credit card PIN, at a bank teller with your card and ID, or through a money transfer service like MoneyGram.
- The total cost of a cash advance depends on how much you withdraw, your card's fee and interest rate, and how long you carry the balance.
- Paying off a cash advance should be your priority because interest accrues daily and the rate is typically 5 to 10 percentage points higher than your purchase rate.
The three ways to withdraw cash from a credit card
ATM withdrawal is the most common method. You insert your credit card into an ATM, enter your PIN, and withdraw cash just as you would from a debit card. Most ATMs accept credit cards, though some may charge an additional ATM operator fee on top of your card's cash advance fee. You can withdraw up to your card's cash advance limit, which is usually lower than your total credit limit — often 20 to 50 percent of it.
Bank teller withdrawal is another option. Walk into a bank branch where your credit card is issued (or sometimes any branch of that bank), bring your card and a photo ID, and ask for a cash advance. The teller will process it on the spot. This method avoids ATM operator fees, though your card's cash advance fee still applies.
Money transfer services like MoneyGram or Western Union also offer cash advances. You can initiate the transfer online or in person at a participating location, and the money goes into your bank account or is available for pickup. These services charge their own fees on top of your card's cash advance fee, making them the most expensive option. Use them only if you need the money sent somewhere specific or if ATMs and banks are not available to you.
What a cash advance actually costs you
A cash advance has three costs: the cash advance fee, the interest rate, and the daily interest accrual. The cash advance fee is a one-time charge, usually 3 to 5 percent of the amount you withdraw. If you withdraw $500 at a 4 percent fee, you pay $20 when ready. This fee is added to your balance.
The interest rate on a cash advance is higher than your purchase rate — often 5 to 10 percentage points higher. If your purchase APR is 18 percent, your cash advance APR might be 28 percent. Unlike purchases, which have a grace period (usually 21 to 25 days before interest starts), cash advances begin accruing interest the moment you withdraw the money. There is no grace period.
To see the real cost, imagine you withdraw $500 at a 4 percent fee and 28 percent APR, and you pay it back over three months. The fee costs $20. The interest costs roughly $35. Your total cost is $55 — more than 11 percent of what you borrowed. If you carry it longer, the interest compounds and the cost climbs.
How to find your cash advance limit and fee
Your credit card statement or online account shows your cash advance limit and fee. Log into your card's website or app, go to the account details or terms section, and look for "cash advance limit" and "cash advance fee." You can also call the number on the back of your card and ask the representative directly.
Your cash advance limit is separate from your credit limit. If your credit limit is $5,000 and your cash advance limit is $1,500, you can only withdraw $1,500 in cash, even though you have more available credit. Some cards let you request a higher cash advance limit, but most issuers do not increase it easily.
Why paying off a cash advance should be your priority
Because cash advances charge interest from day one and at a higher rate than purchases, they should be your first target when you are paying down your card. If you have both purchases and a cash advance on your card, your payment goes toward the purchase first (by law), but you should still prioritize the cash advance in your budget.
Interest on a cash advance compounds daily. A $500 advance at 28 percent APR costs about $3.85 per day in interest alone. After 30 days, you owe roughly $115 in interest and fees combined — even if you have not spent anything else. The longer you carry it, the faster the balance grows.
If you can, pay off the cash advance in full before the next billing cycle. If you cannot, make the largest payment you can afford and treat it as a debt to clear as quickly as possible.
Alternatives to a cash advance
Before you use a cash advance, consider whether another option exists. A personal loan from a bank or credit union usually has a lower interest rate and no cash advance fee. A payday loan is faster but often more expensive than a cash advance, so compare the total cost first. A balance transfer to a card with a 0 percent introductory rate does not help you get cash, but if you need to move debt, it can save you money on interest.
If you need cash for an emergency, ask whether you can borrow from family or friends, use a bank overdraft (if your account allows it), or delay the expense until you can pay with a debit card or savings. These options cost nothing or less than a cash advance.
If you find yourself needing cash advances regularly, that is a sign your budget does not match your income. Consider meeting with a nonprofit credit counselor (through the National Foundation for Credit Counseling or a similar organization) to work through a spending plan. Many offer free or low-cost sessions.
How cash advances affect your credit score
A cash advance itself does not hurt your credit score directly — the withdrawal does not show up on your credit report as a separate item. However, a cash advance increases your credit card balance, which raises your credit utilization ratio (the percentage of your available credit you are using). A higher utilization ratio can lower your score slightly.
If you miss a payment on the cash advance, that missed payment will be reported to the credit bureaus and will damage your score. So the real credit risk is not the cash advance itself, but the difficulty of paying it back quickly.
Frequently Asked Questions
Can I use a credit card to withdraw money from my bank account?
No. A credit card is not connected to your bank account. A cash advance borrows from your credit limit, not from your checking or savings account. If you want to withdraw from your bank account, use your debit card or visit a bank teller.
What is the difference between a cash advance and a balance transfer?
A cash advance puts cash in your hand and charges a fee plus high interest. A balance transfer moves debt from one card to another and may have a lower or 0 percent introductory rate. Balance transfers do not give you cash — they move existing debt.
Will my credit card issuer let me withdraw my full credit limit as cash?
No. Your cash advance limit is usually much lower than your total credit limit — often 20 to 50 percent of it. You can only withdraw up to that cash advance limit, even if you have more credit available for purchases.
Can I get a cash advance if I have a bad credit score?
Yes. A cash advance is a withdrawal from your existing credit card, not a new credit decision. As long as your account is open and in good standing, you can withdraw up to your cash advance limit regardless of your current score.
How long does a cash advance take to show up in my account?
An ATM withdrawal is when ready. A bank teller withdrawal is also when ready. A money transfer service may take one to three business days to deposit the money into your bank account, depending on the service and your bank.