Taking cash from a credit card costs more than you think
You can take cash from a credit card at an ATM, bank teller, or through a cash advance at a store. But a cash advance is not the same as a purchase. The moment you withdraw the money, your card issuer charges a cash advance fee — usually 3% to 5% of the amount — and starts charging interest when ready, with no grace period. A $300 cash advance can cost $9 to $15 in fees alone, plus interest that accrues every single day until you pay it back.
Most people should avoid cash advances. If you need cash, a debit card, personal loan, or credit from a friend or family member will cost you far less. But if you have no other option, here is how the process works and what it will actually cost you.
Key Takeaways
- Cash advances charge a fee of 3% to 5% upfront, plus interest that starts accruing when ready with no grace period.
- You can get a cash advance at an ATM using your PIN, at a bank teller with your card and ID, or at some retail stores.
- The interest rate on a cash advance is usually higher than the rate on regular purchases, and it stays on your bill until you pay the full amount back.
- Paying back a cash advance takes longer than paying back a purchase because your card issuer applies your payment to purchases first.
- A $300 cash advance at 5% fee plus 25% interest costs at least $15 in fees and $6.25 per month in interest if you carry the balance.
Getting cash at an ATM with your credit card
Most credit cards work at ATMs if you have set up a PIN. Call the number on the back of your card and ask your issuer what your PIN is, or request a new one if you do not have one. Then go to any ATM that displays your card's logo — Visa, Mastercard, American Express, or Discover.
Insert your card, enter your PIN, select "Withdrawal" or "Cash Advance," and choose the amount. The ATM will show you the fee before you confirm. The fee is charged to your credit card account when ready, and interest begins accruing right away. Some ATMs charge an additional operator fee on top of your card issuer's fee, so you may pay twice.
ATMs owned by your card issuer's bank usually charge no operator fee. ATMs owned by other banks or independent operators often charge $2 to $5 on top of your card issuer's percentage fee. Check the ATM screen before you complete the transaction — it will tell you the total cost.
Getting cash from a bank teller
You can walk into any bank branch and ask a teller for a cash advance on your credit card. Bring your credit card and a photo ID. The teller will process the transaction the same way an ATM does: they will charge your card issuer's cash advance fee and begin accruing interest when ready.
Bank tellers do not charge an additional operator fee the way ATMs sometimes do, so this route may cost slightly less than an ATM at an independent operator. However, you are still paying the card issuer's fee and interest, so the savings are small. The teller will give you cash and a receipt showing the fee and the amount charged to your account.
Getting cash at a store or through a convenience check
Some retail stores and gas stations will give you cash back when you use your credit card at the register, but this is treated as a purchase, not a cash advance — so no cash advance fee applies. However, not all stores offer this, and the amount is usually limited to $20 to $100. Ask the cashier whether your card is accepted for cash back.
Some card issuers also send convenience checks in the mail. These look like regular checks and work like a cash advance: you write one to yourself or to someone else, deposit it or cash it, and the amount is charged to your credit card with a cash advance fee and interest. Do not use convenience checks unless you have no other option. Treat them the same way you would treat an ATM cash advance.
Understanding the fees and interest you will pay
A cash advance has three costs: the upfront fee, the interest rate, and the time it takes to pay back. Here is how they add up.
The cash advance fee is charged once, when you withdraw the money. It ranges from 3% to 5% of the amount, depending on your card issuer and your account. A $300 advance costs $9 to $15. Some cards charge a flat fee instead of a percentage — for example, $10 per advance — so check your card's terms.
The interest rate on a cash advance is usually 2% to 5% higher than the rate on purchases. If your purchase APR is 20%, your cash advance APR might be 25% or higher. Interest starts accruing the day you withdraw the money, with no grace period. On a $300 advance at 25% APR, you pay about $6.25 per month in interest if you do not pay it back.
The payoff timeline is longer than you might expect. When you make a payment on your credit card, your card issuer applies it to purchases first, then to cash advances. If you have both a $500 purchase and a $300 cash advance on your card, and you pay $400, that $400 goes toward the purchase. The cash advance stays on your bill, accruing interest, until the purchase is paid off.
Comparing the real cost of a cash advance
| Amount | Cash Advance Fee (4%) | Interest per Month (25% APR) | Total Cost if Paid Back in 3 Months |
|---|---|---|---|
| $200 | $8 | $4.17 | $20.50 |
| $300 | $12 | $6.25 | $30.75 |
| $500 | $20 | $10.42 | $51.25 |
These numbers assume you pay back the full amount in three months. If you carry the balance longer, the interest compounds and the total cost rises. A $300 cash advance that takes six months to pay back costs roughly $50 to $60 in fees and interest combined.
Alternatives that cost less
Before you take a cash advance, consider these options:
- Debit card withdrawal. If you have a debit card linked to a checking account, you can withdraw cash from your own money at any ATM for free or a small fee. This costs nothing in interest because you are not borrowing.
- Personal loan. A personal loan from a bank, credit union, or online lender usually has a lower interest rate than a credit card cash advance. If you need $300 to $500, a personal loan may cost less even with origination fees included.
- Borrow from family or friends. If someone you trust can lend you the money, this is almost always cheaper than a cash advance. Even if you agree to pay interest, it will be far less than 25%.
- Credit union cash advance. If you are a member of a credit union, ask whether they offer cash advances on credit cards. Credit unions often charge lower fees and interest rates than banks.
- Paycheck advance. Some employers and payroll services offer advances on your next paycheck. These have fees, but they are usually lower than credit card cash advances and the repayment period is short.
Frequently Asked Questions
Can I use my credit card to withdraw cash from any ATM?
You can use your credit card at ATMs that display your card's logo — Visa, Mastercard, American Express, or Discover. You need a PIN to complete the transaction. If you do not have a PIN, call the number on the back of your card and ask your issuer to set one up. Not all ATMs accept credit cards; some accept debit cards only.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a fee plus interest when ready. A balance transfer moves debt from one credit card to another, usually with a lower introductory interest rate. Balance transfers are meant for moving existing debt, not for getting cash. If you need cash, a cash advance is the only credit card option.
Will a cash advance hurt my credit score?
A cash advance itself does not hurt your credit score, but it increases your credit utilization — the amount of your available credit you are using. High utilization can lower your score temporarily. Paying back the cash advance quickly will bring your utilization down and help your score recover.
Can I pay back a cash advance faster than my regular purchases?
No. Your card issuer applies your payments to purchases first, then to cash advances. If you want to pay off a cash advance quickly, you need to pay more than your minimum payment so that money is left over after purchases are covered. Ask your issuer whether you can make a payment designated specifically for the cash advance.
What happens if I cannot pay back the cash advance?
If you do not pay, the balance stays on your credit card and interest continues to accrue. After 30 days, the late payment is reported to credit bureaus and your credit score drops. After 180 days, your card issuer may charge off the debt and sell it to a collection agency. Contact your issuer when ready if you cannot pay — they may offer a hardship plan or lower interest rate.