Three ways to access cash using your credit card

You can get cash from a credit card through a cash advance, a balance transfer check, or a cash-like purchase at certain retailers. A cash advance lets you withdraw money at an ATM or bank teller using your card and PIN. Balance transfer checks work like regular checks but draw from your credit line. Some cards also let you buy prepaid cards or money orders, which you can then convert to cash.

Each method charges different fees and interest rates, and all of them cost more than a regular purchase. Cash advances typically start charging interest when ready—there is no grace period like there is for regular purchases. You should understand the costs before you choose which method to use.

Key Takeaways

  • Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, with interest starting when ready.
  • Balance transfer checks work like regular checks but pull from your credit line and carry the same fees and rates as cash advances.
  • ATM withdrawals and bank teller withdrawals both work, but ATMs often charge an additional fee on top of your card's cash advance fee.
  • Your credit card issuer sets a cash advance limit that may be lower than your overall credit limit, so you cannot always withdraw your full available balance.
  • Paying back a cash advance should be your priority because the interest rate is higher than the rate on regular purchases.

Cash advances at ATMs and bank tellers

To withdraw cash at an ATM, insert your credit card and enter your PIN. The ATM will show your available cash advance limit—this is separate from your regular credit limit and is often much lower. You can withdraw up to that limit, but the ATM will charge a fee (usually $2 to $5) on top of your card issuer's cash advance fee.

Bank tellers can also process cash advances. Go to any branch of your card issuer's bank or a partner bank and ask for a cash advance. Bring your card and ID. Teller withdrawals often skip the ATM fee, so you only pay your card issuer's fee, but not all banks offer this service. Call your card issuer to confirm which branches accept cash advances.

Your card issuer charges a cash advance fee at the time of withdrawal—typically 3 to 5 percent of the amount you withdraw. A $300 cash advance might cost $9 to $15 in fees alone. Interest starts accruing when ready at a rate that is usually 2 to 5 percentage points higher than your regular purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 23 percent.

Balance transfer checks and cash-like purchases

Some credit card issuers send balance transfer checks to cardholders. These checks draw directly from your credit line and work like regular checks—you write them to yourself or a payee and deposit them in your bank account. The fee and interest rate are the same as a cash advance, so this method is not cheaper, just more convenient if you do not want to visit an ATM.

A few card issuers also allow cash-like purchases: buying prepaid cards, money orders, or casino chips. These transactions are treated as cash advances, not regular purchases, so they carry the same fees and higher interest rates. Check your card's terms to see whether these options are available to you.

Understanding cash advance limits and fees

Your cash advance limit is set by your card issuer and appears on your statement or in your online account. It is often 20 to 50 percent of your total credit limit—so if your credit limit is $5,000, your cash advance limit might be $1,000. You cannot withdraw more than this limit, even if you have available credit for regular purchases.

The total cost of a cash advance includes three parts: the cash advance fee (charged once at withdrawal), the interest rate (charged daily on the balance), and any ATM fees (if you use an ATM). A $500 cash advance with a 4 percent fee, a 24 percent APR, and a $3 ATM fee costs $20 in fees plus interest. If you repay it in 30 days, the interest alone will be about $10, bringing your total cost to $30.

Some card issuers waive the cash advance fee for the first 30 or 60 days after you open an account. Check your welcome offer or cardholder agreement to see if this applies to you. Even with a waived fee, interest still starts when ready.

How cash advances affect your credit score

A cash advance shows up on your credit report as a separate transaction from regular purchases. It increases your credit utilization ratio—the amount of available credit you are using—which can lower your credit score slightly. If your cash advance limit is $1,000 and you withdraw $500, your utilization on that limit jumps to 50 percent.

The impact is usually temporary and small if you repay the cash advance quickly. Paying it off within a few weeks will bring your utilization back down. However, if you carry the balance for months, the higher utilization and the late payments (if they occur) will have a larger effect on your score.

Alternatives to cash advances

Before you take a cash advance, consider whether another option might cost less. A personal loan from a bank or credit union often has a lower interest rate than a cash advance, though it takes longer to process. A payday loan has a very high fee but is only useful if you can repay it within two weeks. Asking friends or family for a short-term loan costs nothing but may strain relationships.

If you need cash regularly, a debit card linked to a checking account avoids all these fees. If you do not have a bank account, a prepaid card or money order service costs less than a cash advance for small amounts. Some employers also offer paycheck advances or early pay options that cost nothing.

Repaying a cash advance quickly

Your credit card statement will show the cash advance balance separately from your regular purchase balance. Payments are usually applied to the lowest-interest balance first, which means your regular purchases get paid before your cash advance. To pay off the cash advance faster, contact your card issuer and ask them to explore your payment directly to the cash advance balance.

Interest on a cash advance compounds daily, so every day you carry the balance, the cost grows. A $500 cash advance at 24 percent APR costs about $3.29 per day in interest. Paying it back within a week saves you roughly $23 compared to paying it back in a month. If you cannot repay it within a few weeks, a personal loan or line of credit may be cheaper in the long run.

Frequently Asked Questions

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

Yes, but your cash advance limit is usually lower than your credit limit. If your credit limit is $500, your cash advance limit might be $200. You can only withdraw up to that cash advance limit, regardless of how much credit you have available for purchases. Contact your card issuer to find out your specific cash advance limit.

What happens if I do not repay a cash advance?

Interest keeps accruing daily at your cash advance rate, and the balance grows. If you miss a payment, your card issuer reports it to the credit bureaus, which damages your credit score. After 30 days late, you may face a late fee. After 180 days, the debt may be charged off and sold to a collection agency.

Is there a grace period for cash advances like there is for purchases?

No. Interest on a cash advance starts accruing the day you withdraw it. There is no grace period, even if you pay off the full balance before your statement due date. This is one reason cash advances are much more expensive than regular purchases.

Can I transfer a cash advance balance to another card?

Technically yes, but it is not useful. A balance transfer is treated as a new cash advance on the new card, so you pay another cash advance fee and start a new interest clock. You would be better off paying the original cash advance off or taking a personal loan instead.

Do all credit cards offer cash advances?

Most credit cards offer cash advances, but some do not. Secured cards and certain store cards may not have this feature. Check your cardholder agreement or call your card issuer to confirm whether cash advances are available on your card.