The main ways to get cash from a credit card
A credit card can give you access to cash in three ways: a cash advance, a balance transfer, or a credit card loan (sometimes called a personal line of credit). Each one works differently, costs different amounts, and makes sense in different situations.
A cash advance lets you withdraw money from an ATM or get cash back at a store using your credit card PIN. A balance transfer moves debt from one card to another, usually at a lower interest rate for a set period. A credit card loan is a separate borrowing product some issuers offer to existing cardholders — you borrow a fixed amount and repay it on a schedule, separate from your card balance.
The method you choose depends on what you need the money for, how much you need, and how quickly you can repay it. Cash advances are fastest but most expensive. Balance transfers work only if you have existing debt to move. Credit card loans take longer to set up but often cost less than cash advances.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, starting when ready with no grace period.
- Balance transfers move debt from one card to another and may offer 0 percent interest for 6 to 21 months, but only work if you already carry a balance elsewhere.
- Credit card loans are a separate product some issuers offer; they charge fixed interest rates and require a separate repayment schedule.
- ATM cash advances are available when ready but are the most expensive way to borrow on a credit card.
- All three methods add to your total debt and affect your credit utilization ratio, which impacts your credit score.
Cash advances: how they work and what they cost
A cash advance is the fastest way to get money from your credit card. You can withdraw cash at any ATM that accepts your card, or ask a cashier at a store for cash back. The money appears in your bank account or your hand within minutes.
The cost is steep. Most issuers charge a cash advance fee of 3 to 5 percent of the amount you withdraw — so a $500 cash advance costs $15 to $25 just to get the money out. On top of that, the interest rate on a cash advance is usually 2 to 3 percentage points higher than your regular purchase APR, and it starts accruing when ready. There is no grace period like there is for regular purchases. If your purchase APR is 18 percent, your cash advance APR might be 21 or 22 percent.
Because of the fee and the high interest rate, a cash advance should be a last resort — use it only if you need cash urgently and have no other option. If you carry the balance for more than a month or two, the interest will compound quickly and become expensive.
Balance transfers: moving debt to a lower rate
A balance transfer moves an existing debt from one credit card (or sometimes a loan) to a new card, usually one with a promotional 0 percent interest rate for a set period. This works only if you already owe money on another card or line of credit.
The benefit is the interest-free period, which typically lasts 6 to 21 months depending on the card and the issuer's current offer. During that time, any payment you make goes entirely toward the principal, not interest. This can save you hundreds of dollars if you have a large balance.
The catch is the balance transfer fee, usually 3 to 5 percent of the amount transferred. So if you move a $5,000 balance, you pay $150 to $250 upfront. After the promotional period ends, any remaining balance reverts to the card's regular APR, which is often 16 to 24 percent. A balance transfer makes sense only if you can pay down the debt significantly during the interest-free window, or if the savings from the lower rate outweigh the transfer fee.
Credit card loans and personal lines of credit
Some issuers offer credit card loans or personal lines of credit to cardholders in good standing. These are separate from your credit card balance — you borrow a fixed amount, receive it as a lump sum, and repay it on a set schedule, usually 24 to 60 months.
The interest rate is fixed and usually lower than a cash advance rate but higher than a regular purchase rate. You know exactly what you owe each month and when the loan will be paid off. There is no fee to set up the loan, though some issuers charge an origination fee of 1 to 2 percent.
This option is worth considering if you need a larger amount of money and can afford a monthly payment. It is cheaper than a cash advance and more predictable than a balance transfer, because the rate and term do not change. However, you have to be approved for the loan, and the issuer will check your credit and income before offering one.
How cash advances and balance transfers affect your credit score
Both cash advances and balance transfers increase your credit utilization ratio — the amount of available credit you are using. If you have a $5,000 credit limit and you take a $2,000 cash advance, your utilization jumps to 40 percent. A higher utilization ratio can lower your credit score, sometimes by 10 to 50 points depending on how high it goes.
The impact is usually temporary. Once you pay down the balance, your utilization drops and your score recovers. However, if you carry the balance for months, the lower score can affect your ability to get approved for new credit or loans at good rates.
A balance transfer can also hurt your score in the short term because it counts as a new account inquiry and a new line of credit. But if it helps you pay down debt faster because of the 0 percent period, it can improve your score over time.
Comparing the three methods side by side
| Method | Speed | Cost | Best for |
|---|---|---|---|
| Cash advance | Minutes | 3–5% fee + high APR (21–25%) | Emergency cash needs only |
| Balance transfer | 3–7 days | 3–5% fee, then 0% APR for 6–21 months | Paying down existing debt |
| Credit card loan | 1–3 days | 0–2% origination fee + fixed APR (8–18%) | Larger amounts with predictable payments |
Alternatives to borrowing from your credit card
Before you take a cash advance or balance transfer, consider whether you have other options. A personal loan from a bank or credit union often has a lower interest rate than a credit card cash advance and a fixed repayment term. A line of credit from your bank may also be cheaper.
If you need cash urgently, ask friends or family, negotiate a payment plan with the person or business you owe money to, or look into whether you have any assets you can sell. These options cost nothing and do not add to your debt.
If you are considering a balance transfer to pay down debt, first look at whether you can increase your income, cut expenses, or use savings to pay the balance faster. The interest-free period is valuable only if you use it to actually reduce what you owe.
Frequently Asked Questions
Can I take a cash advance on a credit card I just opened?
Yes, most issuers allow cash advances on new cards when ready, though some require you to set a PIN first. However, new cardholders sometimes have lower cash advance limits than their overall credit limit, so you may not be able to withdraw as much as you think.
What happens if I can't pay back a cash advance?
The balance stays on your card and accrues interest at the cash advance rate. If you miss payments, your issuer will report it to the credit bureaus, your credit score will drop, and the issuer may charge late fees. After 180 days of missed payments, the issuer may close your account and send the debt to a collection agency.
Is a 0 percent balance transfer really free?
No. You pay a balance transfer fee upfront (3 to 5 percent), and after the promotional period ends, any remaining balance is charged interest at the regular APR. The 0 percent rate applies only to the amount transferred during the promotional window.
Can I transfer a balance from one card to the same issuer's other card?
Most issuers do not allow balance transfers between their own cards. You can usually transfer only from a competitor's card or from a non-credit-card debt like a personal loan. Check your card's terms or call the issuer to confirm.
Does taking a cash advance hurt my credit score?
Yes, temporarily. It increases your credit utilization ratio and may trigger a hard inquiry. Your score usually recovers once you pay the balance down. However, if you carry the cash advance balance for months, the damage to your score can last longer.