What a cash advance is and how it works
A cash advance is a short-term loan against your credit card's available balance. You withdraw cash from an ATM, bank teller, or convenience store using your card, and the amount borrowed appears on your statement as a separate charge from your regular purchases. The card issuer treats it differently than a purchase: you start paying interest when ready (no grace period), the interest rate is usually higher, and you may owe an upfront fee.
The process itself is straightforward. You insert your card into an ATM or visit a bank branch, enter your PIN, and request the amount you need. The cash comes out, and the transaction posts to your account within one to three business days. Some card issuers let you request a cash advance by phone or through their mobile app, though this is less common.
Cash advances are meant for emergencies when you need physical money fast. They are not a long-term borrowing tool—the cost of interest and fees makes them expensive compared to regular purchases or personal loans.
Key Takeaways
- Cash advances charge interest from day one with no grace period, unlike purchases, and the interest rate is typically 3 to 5 percentage points higher than your purchase APR.
- Most card issuers charge an upfront fee of 3 to 5 percent of the amount withdrawn, with a minimum fee of $2 to $10.
- You can withdraw cash at ATMs, bank branches, or convenience stores using your card and PIN, or request an advance by phone or app.
- Your available credit limit for cash advances may be lower than your overall card limit, and some cards do not offer cash advances at all.
- Paying off a cash advance quickly reduces the total interest you owe, since interest accrues daily from the moment you withdraw the funds.
Where to get a cash advance
The easiest place to withdraw a cash advance is an ATM that displays your card network's logo (Visa, Mastercard, American Express, or Discover). Insert your card, enter your PIN, select "cash advance" or "withdrawal," and choose your amount. The ATM will show you the fee before you confirm, so you know the total cost upfront.
If you do not have a PIN or prefer not to use an ATM, visit a bank branch that accepts your card. Bring your card and a photo ID, tell the teller you want a cash advance, and they will process it at the counter. This method works even if the bank is not your card issuer—most major banks accept Visa and Mastercard cash advances from customers of other institutions.
Some convenience stores and grocery stores offer cash advances at their registers. You may be able to get cash back when you make a purchase, or request a standalone advance. Fees at these locations are often higher than ATMs, so check before you proceed.
You can also call your card issuer's customer service number (on the back of your card) and request a cash advance by phone. They will ask how much you need and where you want the funds sent. This method takes longer—typically one to three business days—but works if you cannot reach an ATM or branch.
Fees and interest rates you will owe
Every cash advance comes with two costs: an upfront transaction fee and interest charges.
The transaction fee is usually 3 to 5 percent of the amount you withdraw, with a minimum of $2 to $10 and sometimes a maximum cap. If you withdraw $500, expect to pay $15 to $25 in fees alone. This fee is added to your balance when ready and appears on your statement.
Interest begins accruing the day you withdraw the cash—there is no grace period like there is for purchases. The cash advance APR (annual percentage rate) is typically 3 to 5 percentage points higher than your purchase APR. If your purchase rate is 18 percent, your cash advance rate might be 23 percent. Interest compounds daily, so the longer you carry the balance, the more you owe.
To see your card's specific cash advance fee and APR, check your card's terms and conditions document (usually available on the issuer's website) or call customer service. Rates and fees vary by card and by issuer, so comparing before you take an advance can save you money if you have time to do so.
Your cash advance limit versus your credit limit
Your card issuer may set a separate cash advance limit that is lower than your overall credit limit. For example, you might have a $5,000 credit limit but only a $1,500 cash advance limit. This means you can only withdraw up to $1,500 in cash, even though you could charge $5,000 in purchases.
You can find your cash advance limit by logging into your online account, calling customer service, or checking your most recent statement. Some issuers show it clearly; others require you to ask directly.
If you need to increase your cash advance limit, contact your card issuer and request a raise. They may grant it on the spot or ask you to wait while they review your account. There is no may provide they will approve an increase, especially if you have missed payments or carry high balances.
Some cards—particularly charge cards and certain premium rewards cards—do not offer cash advances at all. If your card does not have a cash advance feature, you will need to use a different card or explore other options like a personal loan or line of credit.
How to minimize the cost of a cash advance
Because cash advances are expensive, the best strategy is to pay them off as quickly as you can. Interest accrues daily, so every day you carry the balance costs you money. If you can repay the advance within a week or two, the total interest will be much lower than if you carry it for months.
When you make a payment on your card, most issuers explore it to your lowest-interest balance first (usually purchases) and your cash advance last. This means your cash advance interest keeps growing even as you pay down the card. To minimize this, make a payment specifically toward the cash advance, or ask your issuer if they will let you direct payments to it.
Avoid taking a cash advance unless you truly need physical cash. A regular purchase or a balance transfer (if available on your card) will cost you less. If you need money for an emergency, a personal loan from a bank or credit union often has a lower interest rate than a cash advance, even though it takes a few days to process.
If you find yourself taking cash advances regularly, that is a sign your budget needs attention or you need a different borrowing tool. A line of credit or personal loan is cheaper for ongoing needs.
What happens if you cannot pay back a cash advance
If you do not pay back a cash advance by the due date, the unpaid balance stays on your card and continues to accrue interest at your cash advance APR. Late payments trigger additional fees and can damage your credit score if they are reported to the credit bureaus (usually after 30 days past due).
The longer the balance sits, the more interest you owe. A $500 cash advance at 23 percent APR costs about $96 in interest over a year if you make no payments. That same advance paid back in three months costs roughly $23 in interest.
If you are struggling to repay a cash advance, contact your card issuer as soon as possible. Some issuers offer hardship programs that lower your interest rate or waive fees temporarily. You will not know what options exist unless you ask.
Alternatives to a cash advance
Before you take a cash advance, consider whether another option might cost less or work better for your situation.
A balance transfer (if your card offers it) lets you move debt from another card to your current card at a lower promotional rate, usually 0 percent for 6 to 21 months. This does not give you cash, but if you need to borrow money and can use a debit card or check instead, a balance transfer avoids the high cash advance fees and interest.
A personal loan from a bank, credit union, or online lender typically has a lower interest rate than a cash advance and a fixed repayment schedule. The downside is it takes a few days to a week to receive the funds, so it does not work for same-day emergencies. Interest rates range from 6 to 36 percent depending on your credit score and the lender.
A line of credit from your bank or credit union works like a cash advance but usually at a lower rate. You draw what you need and pay interest only on what you use. Approval takes longer than a cash advance, but if you know you might need emergency cash, setting up a line of credit in advance is cheaper than relying on your credit card.
If you need cash for a true emergency and have no other option, a cash advance is faster than a loan. But if you have a few days, exploring a personal loan or line of credit will almost always save you money.
Frequently Asked Questions
Can I take a cash advance if I have a bad credit score?
Yes. If you already have a credit card, you can take a cash advance on it regardless of your current credit score. Your card issuer has already approved you for credit, so they will not re-check your score for a cash advance. However, if you do not yet have a card, a lower credit score makes it harder to get approved for one in the first place.
Does a cash advance show up on my credit report?
A cash advance itself does not appear as a separate item on your credit report. However, if you do not pay it back and the account goes to collections, that will show up. Regular on-time payments help your credit; missed payments hurt it.
What is the difference between a cash advance and a payday loan?
A cash advance uses your existing credit card limit and charges interest plus a fee. A payday loan is a short-term loan from a lender that you repay in full on your next payday, usually with a flat fee instead of interest. Payday loans often have much higher effective costs and are meant to be repaid within weeks, not months.
Can I use a cash advance to pay another credit card bill?
Technically yes, but it is a bad idea. You would be borrowing at a high cash advance rate to pay off a purchase that might have a lower rate. You also pay the cash advance fee on top of the interest. It is better to make a regular payment from your bank account or transfer the balance instead.
How long does it take to get a cash advance?
At an ATM or bank branch, you get the cash when ready. If you request a cash advance by phone or app, it typically takes one to three business days for the funds to reach your account. Some issuers offer faster processing for an additional fee.