The main ways to take money out of 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 (called a convenience check). Each one costs you differently and shows up differently on your bill.

A cash advance is the most common method. You go to an ATM, bank, or convenience store, insert your credit card, and withdraw cash just like you would from a debit card. The money hits your account when ready. A balance transfer check is a physical check the card issuer mails to you that you can deposit or cash. A convenience check works the same way but is usually smaller and comes with your monthly statement or as a separate mailing.

All three pull money directly from your credit line, not from a separate account. The cash you take out becomes a debt you owe the card issuer, and you pay interest on it from day one — there is no grace period like there is for regular purchases.

Key Takeaways

  • Cash advances charge interest when ready with no grace period, and the interest rate is usually higher than your regular purchase rate.
  • Most cash advances also charge an upfront fee, typically 3% to 5% of the amount you withdraw, added to your balance right away.
  • Balance transfer checks and convenience checks work the same way as cash advances but arrive by mail, so they take longer to access.
  • The total cost of taking cash out of a credit card is almost always higher than using a debit card or borrowing from another source.

Cash advance fees and interest rates

When you take a cash advance, you pay two separate costs: a fee upfront and interest on the balance. The cash advance fee is charged the moment you withdraw the money. Most card issuers charge between 3% and 5% of the amount you take out, though some charge a flat dollar amount instead (like $10 minimum). A $300 cash advance at 4% costs you $12 in fees alone.

The cash advance interest rate is separate from your regular purchase rate and is almost always higher. If your card charges 18% APR on purchases, the cash advance rate might be 24% or 27%. Interest starts accruing the day you withdraw the money — there is no 21-day grace period like purchases get. If you carry the balance for a month, you owe interest for that full month.

To see your card's specific cash advance fee and rate, check your card's terms and conditions document (called the Schumer Box, usually found on the issuer's website) or call the number on the back of your card. Rates and fees vary by card and by issuer.

Balance transfer checks and convenience checks

Balance transfer checks and convenience checks are mailed to you by your card issuer and work like cash advances, but you have to wait for them to arrive. You deposit or cash the check, and the amount is added to your credit card balance. They charge the same fees and interest rates as ATM cash advances.

The main difference is timing. A cash advance is when ready, but a check takes 3 to 7 business days to arrive in the mail, then another 1 to 3 days to clear if you deposit it. If you need cash urgently, an ATM cash advance is faster. If you have time to wait, a check might be slightly easier to use if you do not have a PIN set up on your card.

Some card issuers offer promotional rates on balance transfer checks — for example, 0% APR for 6 months. Read the fine print carefully. The promotional rate usually applies only to the check amount, not to regular purchases, and the fee still applies upfront. After the promotional period ends, the regular cash advance rate kicks in.

How cash advances affect your credit score

A cash advance does not directly hurt your credit score the way a missed payment does, but it can indirectly lower your score by raising your credit utilization ratio. Your credit utilization is the percentage of your available credit you are using at any given time. If your card has a $5,000 limit and you take a $1,000 cash advance, your utilization jumps to 20%.

Credit scoring models look at utilization as a sign of financial stress. Keeping utilization below 30% is generally better for your score. A large cash advance that pushes you above that threshold can lower your score by a few points, especially if you carry the balance for several months.

The impact is temporary. Once you pay off the cash advance, your utilization drops and your score recovers. But while the balance sits there, it works against you. This is one reason cash advances are expensive in two ways: the fees and interest cost you money, and the utilization can cost you points on your credit report.

When a cash advance makes sense (and when it does not)

A cash advance is rarely the cheapest way to get cash, but there are situations where it might be your only option. If you need cash urgently and have no other source — no savings, no access to a personal loan, no friends or family to borrow from — a cash advance is faster than waiting for a loan to be approved. It is also faster than selling something or asking for a paycheck advance.

A cash advance makes less sense if you have alternatives. A personal loan from a bank or credit union usually charges lower interest and no upfront fee. A payday loan, despite its reputation, often costs less than a credit card cash advance if you pay it back within two weeks. Borrowing from a friend or family member costs nothing. Even a short-term overdraft on a checking account might be cheaper than a cash advance, depending on your bank's fees.

The worst time to take a cash advance is when you are already carrying a balance on your card. The cash advance interest rate is higher than your purchase rate, so you are paying more to borrow money you are already borrowing. If you are in that situation, paying down the existing balance first is almost always smarter than adding a cash advance on top of it.

How to set up a PIN for ATM cash advances

To take a cash advance at an ATM, you need a PIN (personal identification number). If you do not have one, you can set it up through your card issuer's website or mobile app, or by calling the number on the back of your card. The process usually takes a few minutes.

Some issuers let you set your own PIN; others assign one to you. Once it is active, you can use it at any ATM that accepts your card's network (Visa, Mastercard, American Express, or Discover). ATMs at your card issuer's bank are usually free, but ATMs at other banks or independent locations often charge a fee — typically $2 to $3 per transaction, on top of the cash advance fee your card issuer charges.

If you lose your PIN or forget it, you can reset it through the same channels: the website, app, or phone. There is no charge to set up or reset a PIN.

Alternatives to credit card cash advances

Before you take a cash advance, consider these other options. A personal loan from a bank, credit union, or online lender usually has a lower interest rate than a cash advance and charges no upfront fee. The tradeoff is that approval takes a few days to a week. A line of credit from a bank works similarly and can be drawn on multiple times.

A payday loan is a short-term loan meant to be repaid in full on your next payday. The interest rate looks high (often 400% APR or more), but if you repay it within two weeks, the actual dollar cost is usually lower than a cash advance. Payday loans are regulated by state law, and the rules vary by location.

A credit union loan is often cheaper than a bank loan and faster to get if you are already a member. Credit unions also offer something called a payday alternative loan (PAL), which is designed to be cheaper than a payday loan and has a lower rate cap set by federal rules.

If you have a 401(k) or similar retirement account, you may be able to borrow against it. The interest rate is usually lower than a credit card, and you pay the interest back to yourself. The downside is that if you leave your job, the loan becomes due quickly, and if you cannot repay it, it counts as an early withdrawal with tax penalties.

Frequently Asked Questions

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

Technically yes, but it is almost never a good idea. You would be paying a cash advance fee and a higher interest rate to move a balance from one card to another. A balance transfer (moving the balance directly from one card to another without taking cash out) is cheaper because it usually has a lower fee and a promotional 0% rate. If your current card does not offer balance transfers, opening a new card with a balance transfer offer is smarter than a cash advance.

What happens if I cannot pay back a cash advance?

The balance stays on your credit card and accrues interest every month. If you miss payments, your credit score drops, your interest rate may increase, and the card issuer can take legal action to collect the debt. The cash advance does not disappear — it becomes part of your total credit card debt.

Do I have to pay off a cash advance before regular purchases?

No. Credit card issuers explore your payment to the lowest-interest balance first, which is usually your regular purchases. This means if you have both a purchase balance and a cash advance balance, your payment goes to the purchase first, and the cash advance keeps accruing interest at the higher rate. To pay off a cash advance faster, you can request that your payment be applied to it specifically, or you can pay more than the minimum.

Can I take a cash advance on a credit card I just opened?

Usually yes, but some issuers restrict cash advances for new cardholders or limit the amount you can withdraw. Check your card's terms or call the issuer to confirm. Even if you can take a cash advance when ready, it is still subject to the same fees and interest rates as any other cash advance.

Is there a limit to how much I can withdraw as a cash advance?

Yes. Most card issuers set a cash advance limit that is lower than your total credit limit — often 20% to 50% of your available credit. For example, if your card limit is $5,000 and your cash advance limit is $1,000, you cannot withdraw more than $1,000 even if you have more available credit. You can find your cash advance limit in your card's online account or by calling the issuer.