A cash advance lets you withdraw money using your credit card, but it costs more than a regular purchase

A cash advance is a withdrawal of cash from your credit card account, treated as a loan rather than a purchase. You can get one at an ATM using your card's PIN, at a bank teller, or through a cash advance check mailed by your issuer. The money appears in your account within one to three business days.

Cash advances are expensive. Your issuer charges an upfront fee (typically 3 to 5 percent of the amount withdrawn), and the interest rate on the advance is usually higher than your purchase APR — often 5 to 10 percentage points above it. Interest begins accruing when ready, with no grace period. A $500 cash advance at 5 percent fee plus 25 percent APR costs you $25 upfront and roughly $10 in interest per month if you carry the balance.

Most people use cash advances only when they have no other option: they need cash when ready and cannot use a debit card, bank transfer, or personal loan. If you are considering one, compare the total cost against alternatives first.

Key Takeaways

  • Cash advances charge an upfront fee of 3 to 5 percent plus a higher interest rate than purchases, making them one of the most expensive ways to borrow on a credit card.
  • You can withdraw cash at an ATM using your card's PIN, at a bank teller, or by depositing a cash advance check — each method takes one to three business days to post.
  • Interest on a cash advance starts when ready with no grace period, so the longer you carry the balance, the more you pay in fees and interest combined.
  • Your credit card issuer sets a cash advance limit, which is often lower than your overall credit limit and may require a separate request to increase.
  • Paying off a cash advance should be your priority because the interest rate is higher than almost any other form of credit available to you.

How to request a cash advance from your card issuer

Before you withdraw cash, contact your issuer to confirm your cash advance limit — the maximum amount you can borrow this way. This limit is separate from your overall credit limit and is often much lower. You can find it in your account online, in your cardholder agreement, or by calling the number on the back of your card.

If you do not have a PIN set up yet, you will need one to use an ATM. Request a PIN from your issuer by phone or through your online account. Some issuers mail it to you; others generate one when ready that you can use right away. This step can take a few days, so do it before you need the cash.

Once you have your PIN and know your limit, you can withdraw cash at any ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover). The ATM will show you the fee charged by that machine — usually $2 to $5 — on top of your issuer's cash advance fee.

Where and how to withdraw the cash

An ATM is the fastest method. Insert your card, enter your PIN, select "cash advance" or "withdrawal," and choose your amount. The transaction posts within one business day, though some issuers process it the same day. You pay both the ATM operator's fee and your issuer's fee.

A bank teller can also process a cash advance if you visit a branch in person. Bring your card and a photo ID. The teller will verify your identity, confirm your limit, and hand you cash when ready. This method avoids ATM fees but requires a trip during business hours.

Some issuers mail cash advance checks — checks drawn against your credit card account. You can deposit these into your bank account or cash them at a check-cashing service. This method is slower (five to seven business days for the check to arrive, then one to three days for the deposit to clear) but useful if you need to transfer money to another account rather than carry physical cash.

Understanding the fees and interest you will pay

Your issuer charges a cash advance fee upfront, calculated as a percentage of the amount withdrawn. This fee ranges from 3 to 5 percent at most issuers, though some charge a flat minimum (like $10) if the percentage would be less. A $500 advance at 4 percent costs $20. A $100 advance at 3 percent with a $10 minimum costs $10.

The cash advance APR is the interest rate applied to the balance. It is typically 5 to 10 percentage points higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 25 percent. This rate applies from the day you withdraw the money — there is no grace period like there is for purchases.

Interest accrues daily on the outstanding balance. If you withdraw $500 at 25 percent APR and pay nothing for a month, you owe roughly $10 in interest ($500 × 0.25 ÷ 12). If you carry it for three months, you owe roughly $31. The longer you wait to pay it back, the more interest compounds.

When you make a payment to your card, most issuers explore it first to purchases, then to cash advances. This means if you have both a purchase balance and a cash advance balance, your payment reduces the cheaper debt first, leaving the expensive cash advance to accrue interest longer.

How to pay back a cash advance quickly

Treat a cash advance as a debt to eliminate as fast as possible. Make a payment as soon as you can — ideally before the next billing cycle closes — to minimize interest charges. Even a partial payment reduces the daily interest you owe.

If you have the cash available, pay the full amount including the fee in one lump sum. If you must carry a balance, pay more than the minimum payment. A $500 advance at 25 percent APR with a minimum payment of $25 per month will take you 23 months to pay off and cost you $75 in interest alone — on top of the $20 fee you already paid.

Some issuers allow you to request a lower cash advance limit or disable cash advances on your account entirely. If you do not plan to use this feature, disabling it removes the temptation and protects you if your card is lost or stolen.

When a cash advance makes sense versus alternatives

A cash advance is rarely the cheapest option. Before you use one, consider these alternatives: a personal loan from a bank or credit union (typically 6 to 36 percent APR with no upfront fee), a payday loan from a licensed lender (expensive but sometimes faster), a balance transfer to a 0 percent introductory card (if you have time to open a new account), or a short-term loan from family or friends.

A cash advance makes sense only if you need cash when ready, have no other borrowing options available, and can pay it back within a month or two. If you are using it to cover an ongoing shortfall in your budget, that is a sign you need a different solution — a personal loan, a side income, or help with your expenses.

If your card offers a rewards rate on cash advances (rare, but some do), that benefit does not offset the fee and interest. The cost of borrowing far outweighs any points or cash back you earn.

How cash advances affect your credit score

A cash advance does not directly hurt your credit score the way a late payment does. However, it increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 credit limit and take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization (above 30 percent) can lower your score slightly.

The bigger risk is that a cash advance can trap you in a cycle of debt. If you cannot pay it back quickly, the interest and fees compound, your balance grows, and you may miss payments — which will damage your score significantly. Avoid this by treating a cash advance as a short-term emergency tool only, not a regular source of spending money.

Frequently Asked Questions

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

Your cash advance limit is separate from your credit limit and is often lower. If your credit limit is $2,000, your cash advance limit might be $500. You can request an increase by calling your issuer, but approval depends on your account history and creditworthiness. Some issuers will not increase it.

What happens if I do not pay back a cash advance?

Interest and fees continue to accrue. If you miss a payment, your issuer reports it to the credit bureaus and your score drops. After 30 days, you may face a late fee. After 180 days, the account may be charged off and sent to a collection agency, which can damage your credit for years.

Can I use a cash advance to pay another credit card?

Technically yes, but it is a bad idea. You are borrowing at a high rate (the cash advance APR) to pay off debt at a lower rate (your other card's purchase APR). You also pay the cash advance fee on top. A balance transfer to a 0 percent card is cheaper if you may have access to.

Is there a limit to how much I can withdraw?

Yes. Your issuer sets a cash advance limit, which you can find in your account or cardholder agreement. This limit is usually much lower than your overall credit limit. Some issuers also cap daily ATM withdrawals at $500 or $1,000 per day, so a large advance may require multiple transactions.

Do I pay the ATM fee even if I use a bank teller?

No. If you visit a branch and ask a teller to process the advance, you pay only your issuer's cash advance fee, not the ATM operator's fee. This saves you $2 to $5 per transaction, though it requires a trip during business hours.