The main ways to get cash from a credit card

You can get cash from a credit card in three ways: a cash advance at an ATM or bank, a balance transfer check, or a cash-like payment (such as buying a money order or gift card). Each method charges different fees and interest rates, and each one costs more than a regular purchase. A cash advance is the fastest but most expensive. A balance transfer check takes longer to arrive but may have a lower interest rate. Buying money orders or gift cards with your card avoids the "cash advance" label but still counts as a cash-like transaction with the same high fees.

The reason all three cost more is that credit card issuers treat cash differently from purchases. When you buy something, you get a grace period — usually 21 to 25 days — before interest starts. Cash advances and cash-like transactions start charging interest the moment you take the money, with no grace period. The interest rate on cash advances is also typically higher than your purchase rate, sometimes by 5 percentage points or more.

Key Takeaways

  • Cash advances charge interest from day one with no grace period, and the interest rate is usually 5 to 10 percentage points higher than your purchase rate.
  • A typical cash advance fee is 3 to 5 percent of the amount withdrawn, charged upfront, on top of the interest.
  • Balance transfer checks arrive by mail and may have a lower interest rate than ATM cash advances, but still charge an upfront fee of 3 to 5 percent.
  • Buying money orders, gift cards, or other cash-like items with your credit card counts as a cash advance and carries the same fees and rates.
  • The cheapest way to get cash is usually a personal loan from a bank or credit union, which charges less interest and no upfront fee.

Cash advances at an ATM or bank branch

A cash advance is the fastest way to get money from your credit card. You go to an ATM that accepts your card, enter your PIN, and withdraw cash. You can also walk into a bank branch and ask the teller for a cash advance. The money is in your hand within minutes.

The cost is steep. You pay an upfront fee — usually 3 to 5 percent of the amount you withdraw — charged to your card when ready. If you withdraw $500, you might pay $15 to $25 in fees alone. On top of that, interest starts accruing the same day at your cash advance rate, which is often 5 to 10 percentage points higher than your purchase rate. If your purchase rate is 18 percent, your cash advance rate might be 23 or 24 percent. That interest compounds daily and is added to your balance each month.

Your credit card issuer sets the cash advance limit separately from your credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your card's terms or call the issuer to find out what yours is.

Balance transfer checks

Balance transfer checks are mailed to you by your credit card issuer and work like regular checks, except they draw from your credit card account instead of a bank account. You write the check to yourself or to someone else, deposit it in your bank account, and the amount is added to your credit card balance. The whole process takes 5 to 10 business days from the time you request the checks.

Balance transfer checks often have a lower interest rate than cash advances — sometimes 0 percent for a promotional period of 6 to 12 months, though that rate applies only to the balance transfer check amount, not to other balances on the card. They still charge an upfront fee, usually 3 to 5 percent, but because the interest rate may be lower, the total cost can be less than a cash advance if you pay off the balance before the promotional period ends.

The catch is timing. If you need cash today, balance transfer checks will not help. They also only work if your issuer offers them — not all cards do. Check your card's website or call the issuer to ask whether balance transfer checks are available on your account.

Money orders, gift cards, and other cash-like purchases

Some people try to avoid the "cash advance" label by buying money orders, gift cards, or prepaid cards with their credit card instead. This does not work. Credit card issuers classify these purchases as cash-like transactions, which means they are treated the same as cash advances: interest starts when ready, no grace period, and the interest rate is the cash advance rate, not the purchase rate. You also pay the same upfront fee.

The only difference is that you have a physical item (a money order or gift card) instead of cash in your wallet. The cost to you is identical. If you are considering this route, a cash advance at an ATM is simpler and gets you actual cash instead of a card you have to spend at a specific store.

How cash advances affect your credit score

A cash advance shows up on your credit report as a balance on your credit card, just like a purchase does. It increases your credit utilization ratio — the amount of your credit limit you are using — which can lower your credit score temporarily. If you have a $5,000 limit and take a $1,000 cash advance, your utilization jumps to 20 percent. The higher your utilization, the more your score drops.

The impact is usually temporary. Once you pay off the cash advance, your utilization drops and your score recovers. However, if you carry the balance for months while interest compounds, your score will stay lower for longer. Paying off a cash advance as quickly as possible protects your credit score and saves you money on interest.

Cheaper alternatives to cash advances

Before you take a cash advance, consider whether you actually need cash or whether you need money. If you need money to pay a bill or buy something, you might be able to use your credit card directly instead of withdrawing cash. If the merchant does not accept credit cards, a debit card or bank transfer costs nothing.

If you genuinely need cash, a personal loan from a bank or credit union is usually cheaper than a cash advance. Personal loans charge interest but no upfront fee, and the interest rate is typically lower than a credit card cash advance rate. A $500 personal loan at 12 percent interest costs less than a $500 cash advance at 24 percent with a 5 percent upfront fee. You can also ask family or friends for a short-term loan, or look into whether a local nonprofit offers emergency loans at low or no interest.

A line of credit from your bank — sometimes called a personal line of credit — is another option. It works like a credit card but usually charges lower interest and no upfront fee for withdrawals. If you have an existing relationship with a bank, ask whether you may have access to.

How to minimize the cost if you do take a cash advance

If a cash advance is your only option, you can reduce the damage by withdrawing only what you need and paying it back as fast as possible. Every dollar you pay off stops accruing interest at that high cash advance rate.

Some cards offer a lower cash advance fee for the first withdrawal in a calendar year, or waive the fee for cardholders with a high credit score or long account history. Call your issuer and ask whether any fee waivers explore to you before you withdraw.

Also check whether your bank offers cash advances without a fee. Some banks will advance cash on your debit card or checking account for a flat fee or no fee at all, which is cheaper than a credit card cash advance. If you have a relationship with a bank, this is worth asking about.

Frequently Asked Questions

What is the difference between a cash advance and a regular purchase?

A regular purchase has a grace period of 21 to 25 days before interest starts. A cash advance charges interest from day one. The interest rate on a cash advance is also higher — usually 5 to 10 percentage points above your purchase rate. A cash advance also charges an upfront fee of 3 to 5 percent, while purchases do not.

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

Technically yes, but it is expensive. The cash advance fee and high interest rate make it a costly way to move debt. A balance transfer — moving the balance directly from one card to another without withdrawing cash — is cheaper if both cards are from issuers that allow it. A personal loan is usually the cheapest option.

Do cash advances have a credit limit?

Yes. Your issuer sets a separate cash advance limit, which is often lower than your overall credit limit. You might have a $5,000 credit limit but only a $1,500 cash advance limit. Check your card's terms or call the issuer to find out what yours is.

How long does it take to get a cash advance?

An ATM cash advance is when ready. A cash advance at a bank branch takes a few minutes. Balance transfer checks take 5 to 10 business days to arrive by mail. If you need cash today, an ATM is your only option.

Will a cash advance hurt my credit score?

It can temporarily lower your score because it increases your credit utilization ratio. The impact is usually small and temporary — your score recovers once you pay off the balance. Carrying a cash advance for months while interest compounds will keep your score lower for longer.