Getting cash from a credit card is called a cash advance, and it costs more than a regular purchase
A cash advance lets you withdraw money from your credit card account at an ATM, bank, or through a cash-back transaction at a store. The money comes from your available credit, not from a separate account. You pay it back like any other credit card balance—but with higher fees and interest rates than you would on regular purchases.
Most credit cards charge a cash advance fee (usually 3 to 5 percent of the amount withdrawn) and a higher interest rate (often 5 to 10 percentage points above your regular purchase rate). Interest starts accruing when ready, with no grace period. Because of these costs, a cash advance should be a last resort, not a routine way to get spending money.
Key Takeaways
- Cash advances charge a separate fee (typically 3 to 5 percent) plus a higher interest rate that begins accruing right away.
- You can withdraw cash at an ATM using your PIN, at a bank teller window, or through a cash-back purchase at a store.
- Your credit card issuer sets a cash advance limit, which may be lower than your overall credit limit.
- Paying back a cash advance should be your priority because the interest rate is significantly higher than on regular purchases.
Three ways to draw cash from your credit card
The method you choose depends on where you are and how much cash you need. All three routes use the same credit line and carry the same fees and interest rates.
ATM withdrawal: Insert your credit card and enter your PIN at any ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover). The machine will dispense cash and charge your credit card account. This works 24/7 but usually has the lowest withdrawal limit per transaction—often $200 to $500.
Bank teller: Walk into a bank branch (yours or any bank) with your credit card and photo ID. Tell the teller you want a cash advance. They will process it on the spot, though some banks charge an additional fee for teller-assisted advances. This method has higher per-transaction limits, sometimes $1,000 or more, and you can ask questions about fees before you proceed.
Cash back at a store: Use your credit card to make a purchase and ask the cashier for cash back. The store will add the cash amount to your total charge. This has no separate fee beyond your regular cash advance fee, and it works at most grocery stores, pharmacies, and retailers. The limit is usually $20 to $100 per transaction, depending on the store's policy.
Know your cash advance limit before you go
Your credit card issuer sets a separate cash advance limit, which is often much lower than your overall credit limit. You might have a $5,000 credit limit but only a $500 cash advance limit. This limit protects the card issuer because cash advances are riskier than purchases.
Call the number on the back of your card or log into your online account to find your cash advance limit. Some card issuers let you increase this limit by request, though doing so signals to them that you plan to use cash advances regularly. If you hit your limit, you cannot withdraw more until you pay down the balance.
What fees and interest you will pay
A cash advance costs money in two ways: an upfront fee and a higher interest rate.
| Cost | Typical Range | When It Applies |
|---|---|---|
| Cash advance fee | 3 to 5 percent of amount withdrawn | Charged when ready when you withdraw |
| Cash advance interest rate | 5 to 10 points higher than purchase rate | Accrues daily from the withdrawal date |
| ATM operator fee | $1 to $3 per withdrawal | Only if you use an out-of-network ATM |
If you withdraw $300 at a 4 percent cash advance fee, you owe $12 when ready. If your cash advance rate is 24 percent and you carry the balance for one month, you will owe roughly $6 in interest. The total cost is $18 on a $300 withdrawal—6 percent of what you borrowed.
By contrast, a regular purchase at 15 percent interest costs about $3.75 in interest over the same month. This is why paying back a cash advance quickly matters far more than paying back a regular purchase quickly.
How to minimize the cost of a cash advance
If you must take a cash advance, these steps will reduce what you pay.
Withdraw only what you need. Every dollar you advance costs you a fee plus interest. If you need $200, do not withdraw $300. The extra $100 will cost you $4 upfront plus interest.
Pay it back as fast as possible. Unlike a regular purchase, there is no grace period on cash advances. Interest starts accruing the day you withdraw. Paying back even half the balance within a week will cut your interest cost in half. If you can pay the full amount within a few days, do it.
Use a bank teller instead of an ATM if the amount is large. A teller can tell you the exact fee before you proceed, and you avoid out-of-network ATM fees. If you are withdrawing $500 or more, the teller route usually costs less.
Avoid repeated small withdrawals. Each withdrawal triggers a separate fee. If you need $500, withdraw it once, not five times at $100 each. Five withdrawals at 4 percent each cost you $20 in fees; one withdrawal costs $20 total, but you pay it once instead of five times.
When a cash advance makes sense and when it does not
A cash advance is appropriate in narrow situations: you need cash urgently, you have no other source (no savings, no ATM card, no access to a loan), and you can pay it back within days or a week. Examples include a car breakdown in a town where you do not bank, a medical copay that only accepts cash, or a security deposit for an emergency rental.
A cash advance does not make sense if you are using it to fund regular spending, to cover a shortfall you cannot close quickly, or because you do not want to use a debit card. If you are carrying a balance on your credit card already, a cash advance will make your debt problem worse because the interest rate is higher. If you are considering a cash advance to pay another debt, explore a personal loan or balance transfer instead—both usually cost less.
Frequently Asked Questions
Can I get a cash advance if my credit card is maxed out?
No. A cash advance draws from your available credit, so you need unused credit to withdraw. If your card is at its limit, you cannot advance cash. You would need to pay down the balance first or request a credit limit increase from your issuer.
Does a cash advance hurt my credit score?
A single cash advance does not directly damage your score, but carrying a high balance does. If you withdraw $500 and pay it back within a week, the impact is minimal. If you carry the balance for months, your credit utilization ratio rises and your score may drop. Paying on time matters more than the type of transaction.
What if I forget my PIN for my credit card?
Call the number on the back of your card and ask the issuer to reset or send you a new PIN. This usually takes a few business days. In the meantime, you can still get a cash advance at a bank teller by showing your card and ID—you do not need a PIN for that method.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is expensive. You pay the cash advance fee and high interest rate on top of the debt you are moving. A balance transfer (moving debt from one card to another) or a personal loan usually costs less. Check whether your issuer offers a 0 percent balance transfer rate before you resort to a cash advance.
Is there a daily limit on how much I can withdraw?
Yes. Your issuer sets a daily ATM withdrawal limit (often $200 to $500) separate from your overall cash advance limit. You can withdraw multiple times in a day up to your daily limit, but each withdrawal triggers a separate fee. Bank tellers may allow larger single withdrawals; ask before you go.