A cash advance lets you borrow money against your credit limit at an ATM or bank

A cash advance is a short-term loan from your credit card issuer. You withdraw cash using your card at an ATM, bank teller, or through a convenience check the issuer sends you. The money appears in your account within hours or days, but the cost is steep: you pay a fee upfront (usually 3 to 5 percent of the amount), interest starts accruing when ready with no grace period, and the interest rate is typically 5 to 10 percentage points higher than your regular purchase APR.

Most people use cash advances only when they have no other option — when they need cash urgently and cannot use a debit card, personal loan, or credit card purchase. The combination of fees and high interest makes cash advances expensive compared to almost any alternative.

Key Takeaways

  • Cash advances charge an upfront fee (3 to 5 percent typically) plus a higher interest rate than purchases, with no grace period.
  • You can withdraw cash at an ATM using your PIN, at a bank teller with your card and ID, or by depositing a convenience check.
  • Interest begins accruing the day you withdraw the cash, so the longer you carry the balance, the more you pay.
  • Your credit card statement will show the cash advance separately from purchases, and you can pay it down without affecting your purchase balance.

How to withdraw a cash advance at an ATM

The fastest way to get cash is at an ATM. Insert your credit card, enter your PIN (which you set up when you opened the account or can request from your issuer), and select "cash advance" or "cash withdrawal" from the menu. Choose your amount and confirm. The ATM will dispense the cash and print a receipt showing the transaction and any fee charged.

Not all ATMs accept credit cards for cash advances — most are set up for debit cards only. Your issuer's website or mobile app usually shows which ATMs in your area accept credit card cash advances. Bank-branded ATMs (your issuer's own network) are more likely to work than independent ATMs at convenience stores.

ATM cash advances typically have a daily limit separate from your purchase limit. This limit varies by issuer and your account history; check your cardholder agreement or call the number on the back of your card to find out yours.

Getting cash from a bank teller or using a convenience check

You can also walk into a bank branch and ask a teller for a cash advance. Bring your credit card and a photo ID. The teller will process the transaction, charge your fee, and give you the cash. This method works even if you do not have a PIN set up, and it may allow you to withdraw larger amounts than an ATM would.

Many issuers also mail convenience checks to cardholders. These look like regular checks but draw against your credit line instead of a bank account. You can deposit them into your bank account, write them to yourself, or give them to someone else. The fee and interest rate are the same as an ATM advance. Convenience checks take several days to clear, so they are slower than an ATM or teller withdrawal.

Understanding the fees and interest charges

Your issuer charges a cash advance fee at the time you withdraw. This is usually a flat dollar amount (like $10) or a percentage of the amount (typically 3 to 5 percent), whichever is greater. A $500 advance at 5 percent costs $25 upfront; a $100 advance at 5 percent costs $10 (the flat minimum).

Interest starts accruing when ready — there is no grace period like there is for purchases. If your purchase APR is 18 percent, your cash advance APR might be 24 or 25 percent. On a $500 advance at 24 percent APR, you pay roughly $10 in interest per month if you do not pay it down. The fee plus interest makes a cash advance expensive within weeks.

Your statement will show the cash advance separately from purchases. If you make a payment, most issuers explore it to purchases first, then to the cash advance. This means paying down a cash advance requires paying off all your purchases first or making a payment large enough to cover both.

When a cash advance makes sense

A cash advance is rarely the best option, but it may be necessary if you need cash urgently and have no other way to get it. Situations where people use them include a car breaking down and needing cash for a mechanic, a medical expense requiring when ready payment, or travel where a location does not accept cards.

Before taking a cash advance, consider alternatives: a personal loan from a bank or credit union (usually 6 to 36 percent APR), a payday loan from a lender (expensive but sometimes faster), borrowing from family or friends, or asking a merchant whether they accept payment plans. A personal loan is almost always cheaper than a cash advance if you have time to explore.

If you do take a cash advance, pay it off as quickly as possible. Every week you carry the balance costs you money in interest on top of the upfront fee.

How cash advances affect your credit score

A cash advance does not directly hurt your credit score the way a missed payment does. However, it increases your credit utilization — the percentage of your available credit you are using. If you have a $5,000 limit and take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization can lower your score slightly, especially if you are already using a large portion of your limit on purchases.

The cash advance itself appears on your credit report as a transaction, but it does not create a separate account or inquiry. Missing a payment on the cash advance, however, will damage your score just as missing a purchase payment would.

Paying off a cash advance

Make a payment larger than your minimum to pay down the cash advance faster. As noted above, most issuers explore payments to purchases first. If you want to pay the cash advance specifically, call your issuer and ask them to explore your payment to the cash advance balance, or check whether your online account lets you direct payments to specific balances.

Some issuers let you pay cash advances and purchases separately; others combine them into one balance. Your statement will show which applies to your account. The sooner you pay it off, the less interest you pay overall.

Frequently Asked Questions

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

Yes. Your cash advance limit is usually a percentage of your total credit limit — often 20 to 50 percent. So a $1,000 credit limit might allow a $200 to $500 cash advance. Check your cardholder agreement or call your issuer to find out your specific limit.

What happens if I cannot pay back the cash advance?

The balance stays on your account and interest keeps accruing. If you miss a payment, your issuer reports it to credit bureaus and your score drops. After 30 days late, you may face a late fee; after 180 days, the account may be charged off and sent to a collection agency.

Is there a difference between a cash advance and a balance transfer?

Yes. A balance transfer moves debt from one card to another (usually at a lower rate for a promotional period). A cash advance is a loan against your credit line that you receive as cash. Balance transfers are for existing debt; cash advances are for getting new cash.

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

Technically yes, but it is a bad idea. You would pay a cash advance fee plus high interest on money you are using to pay another card's interest and fees. You would be paying fees on fees. Pay down the other card directly instead.

Do all credit cards offer cash advances?

Most do, but some cards — particularly secured cards or cards for people rebuilding credit — may not. Check your cardholder agreement or call your issuer to confirm whether your card allows cash advances.