Getting cash from your credit card costs more than you might expect
You can withdraw cash from a credit card at an ATM, but it is not the same as using your card to buy something. The bank charges you a cash advance fee — usually 3% to 5% of the amount you withdraw — right away. You also start paying interest when ready, with no grace period like you get on purchases. The interest rate on cash advances is often higher than your regular purchase rate. If you withdraw $500, you might pay $15 to $25 in fees alone, plus interest from day one.
Before you use this option, understand what it actually costs and what the alternatives are. Most people find that a personal loan, a balance transfer, or even a payday loan from a lender (not your card) costs less money in the long run.
Key Takeaways
- Cash advances charge a fee of 3% to 5% upfront, plus interest that starts accruing when ready with no grace period.
- The interest rate on cash advances is typically higher than your purchase rate, sometimes by 5 percentage points or more.
- You can withdraw cash at any ATM using your credit card's PIN, which you may need to set up first with your card issuer.
- Alternatives like personal loans, balance transfers, or borrowing from friends often cost less than a cash advance.
- If you need cash regularly, a debit card or a line of credit from your bank may be a better fit than repeated cash advances.
How to withdraw cash at an ATM
Insert your credit card into any ATM that displays your card's logo — Visa, Mastercard, American Express, or Discover. Enter your PIN. If you have never set a PIN for your credit card, you will need to do that first by calling the number on the back of your card or logging into your online account.
Select "Withdrawal" or "Cash Advance" from the menu. Enter the amount you want. The ATM will show you the fee before you confirm. Take your card, your cash, and your receipt. The transaction posts to your account within one business day, and the fee appears on your next statement.
Some ATMs charge an additional operator fee on top of your card issuer's fee — you will see this warning on the screen before you complete the transaction. Bank-owned ATMs usually do not charge this extra fee if you use them at your own bank.
What fees and interest rates you will pay
The cash advance fee is a percentage of the amount you withdraw, charged once. A $500 withdrawal with a 4% fee costs $20. A $1,000 withdrawal costs $40. This fee appears on your statement as a separate charge, not rolled into the amount you owe.
Interest starts accruing the moment you withdraw the cash — there is no interest-free period. If your card's cash advance rate is 24% and you withdraw $500, you owe about $10 in interest for the first month if you do not pay it back. The longer you carry the balance, the more interest compounds. After six months, that same $500 balance costs you roughly $60 in interest alone, plus the original $20 fee.
Your cash advance rate is often 3 to 5 percentage points higher than your purchase rate. If your purchase rate is 18%, your cash advance rate might be 23% or 24%. Check your card's terms or call the issuer to find out your specific rate before you withdraw.
Where you can get cash advances
You can withdraw cash at any ATM that accepts your card brand. This includes bank ATMs, credit union ATMs, and independent ATMs in convenience stores, bars, and gas stations. ATMs at your own bank or credit union typically charge only your card issuer's fee. ATMs owned by other banks or independent operators usually add their own fee on top — often $2 to $3 per transaction.
You can also get a cash advance at a bank branch or credit union branch by asking a teller. Bring your card and a photo ID. The teller will process the transaction the same way an ATM does, but you avoid the ATM operator fee. Some branches may have limits on how much you can withdraw in one day.
You cannot get a cash advance at a store checkout or through a peer-to-peer payment app like Venmo or PayPal. Those services only accept credit cards for purchases, not cash advances.
Comparing cash advances to other ways to borrow
A personal loan from a bank or online lender usually has a lower interest rate than a cash advance — often 6% to 36% depending on your credit score — and no upfront fee. If you need $500 and your credit is decent, a personal loan might cost you $30 to $50 in interest over six months, compared to $20 in fees plus $60 in interest for a cash advance.
A balance transfer moves debt from one card to another. If you have a high-interest credit card balance and transfer it to a card with a 0% introductory rate, you pay no interest for 6 to 21 months (depending on the card). You do pay a balance transfer fee of 3% to 5%, but if you pay off the balance before the intro period ends, you come out ahead. This only works if you already have debt on another card.
A line of credit from your bank works like a credit card but usually has a lower interest rate. You draw money as you need it and pay interest only on what you use. If your bank offers this, it is worth comparing to a cash advance.
Borrowing from a friend or family member costs nothing if they do not charge interest, but it can strain the relationship if you cannot pay back on time. A written agreement about repayment helps both of you.
When a cash advance might make sense
A cash advance is rarely the cheapest option, but there are situations where it is the fastest one. If you need cash today and have no other way to get it, a cash advance takes minutes. A personal loan takes days or weeks to process. A balance transfer takes a week or more to post.
If you are in a true emergency — your car broke down and you need $200 for a repair to get to work — a cash advance might be worth the cost. You pay the fee and interest, but you solve the problem when ready. Just do not make it a habit. If you find yourself taking cash advances regularly, that is a sign you need a different borrowing tool or a change to your budget.
If your credit score is very low and you cannot get a personal loan, a cash advance might be your only option. It is not ideal, but it is available. In that case, withdraw only what you absolutely need and pay it back as fast as you can to minimize interest.
How to avoid needing a cash advance
Keep a small emergency fund — even $500 to $1,000 — in a savings account. When something unexpected happens, you can use that money instead of borrowing. This costs you nothing and actually earns you a small amount of interest.
If you do not have a savings account, open one at your bank or credit union. Most accounts have no minimum balance and pay interest, even if it is small. Set up automatic transfers of $25 or $50 per paycheck if you can. Over time, this builds a cushion.
Use your debit card for everyday cash needs instead of withdrawing from a credit card. A debit card pulls money directly from your checking account with no fees or interest. If you do not have a debit card, ask your bank to issue one.
If you need cash regularly for work or other reasons, talk to your employer or bank about a direct deposit or paycheck advance. Some employers offer this at no cost.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is expensive. You pay the cash advance fee and interest rate on the money you withdraw, then use it to pay another card. You are paying two interest rates at once. A balance transfer is cheaper because you move the debt directly without withdrawing cash.
What happens if I cannot pay back a cash advance?
The balance stays on your credit card and keeps accruing interest. If you do not pay at least the minimum payment, your credit score drops and the card issuer may charge you a late fee. After 30 days late, the issuer reports it to the credit bureaus. After 180 days, they may close the account or send it to a collection agency.
Do I need a PIN to get a cash advance?
Yes, for ATM withdrawals. If you do not have a PIN set up, call the number on the back of your card or log into your online account to create one. At a bank branch, you only need your card and photo ID — no PIN required.
Is there a limit to how much I can withdraw?
Yes. Your card issuer sets a cash advance limit, which is often lower than your credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. Check your card agreement or call the issuer to find out your limit.
Does a cash advance hurt my credit score?
Not directly. The withdrawal itself does not appear on your credit report. But if you carry the balance and it raises your credit utilization — the percentage of your credit limit you are using — your score may drop slightly. Paying it off quickly keeps this impact small.