You can take cash from a credit card, but it costs more than a regular purchase
A cash advance is when you withdraw money directly from your credit card's available credit, either at an ATM, a bank teller, or through a convenience check. The card issuer treats it as a loan against your credit line, not a purchase. This means you pay interest when ready — there is no grace period like you get on regular card purchases — and you also pay an upfront fee, usually 3 to 5 percent of the amount you withdraw.
If you need cash and have a credit card, a cash advance is possible but expensive. Most people should explore other options first: using a debit card, visiting your bank for a personal loan, or asking for a paycheck advance from your employer. A cash advance should be a last resort, not a routine way to get spending money.
Key Takeaways
- Cash advances charge interest from day one with no grace period, plus an upfront fee of 3 to 5 percent of the amount withdrawn.
- You can get a cash advance at an ATM using your PIN, at a bank teller with your card and ID, or by depositing a convenience check.
- The interest rate on cash advances is usually higher than the rate on regular purchases, sometimes by 5 to 10 percentage points.
- Paying back a cash advance takes longer because your regular card payments go toward purchases first, not the advance.
- A personal loan, paycheck advance, or borrowing from family costs less than a cash advance in almost every situation.
Three ways to withdraw cash from your credit card
ATM withdrawal is the fastest method. Go to any ATM that displays your card's logo (Visa, Mastercard, American Express, Discover). Insert your card, enter your PIN, select "cash advance" or "withdrawal," and choose your amount. The ATM will show you the fee before you confirm. The money appears in your account when ready, but the fee and interest start accruing right away.
Bank teller withdrawal works at any bank or credit union branch, even if it is not your own bank. Bring your credit card and a photo ID. Tell the teller you want a cash advance. They will process it on the spot, charge the fee, and hand you cash. This method works if you do not have a PIN or prefer not to use an ATM.
Convenience checks are blank checks your card issuer mails to you, linked to your credit line. You write one to yourself or a payee, deposit it like a regular check, and the amount becomes a cash advance. These are slower than ATM or teller withdrawals because you have to wait for the check to clear, but they let you move money to a bank account instead of getting cash in hand.
Fees and interest rates you will pay
Every cash advance costs you two things: a cash advance fee and interest. The fee is charged upfront and ranges from 3 to 5 percent of the amount you withdraw, with a minimum of $5 to $10. If you withdraw $500, you might pay $15 to $25 in fees alone. This fee is added to your balance when ready.
Interest starts accruing the same day you take the advance. Unlike regular purchases, which have a grace period (usually 21 to 25 days before interest kicks in), cash advances charge interest from day one. The interest rate is typically 2 to 5 percentage points higher than your regular purchase APR. If your card charges 18 percent APR on purchases, the cash advance rate might be 23 or 24 percent.
The math adds up fast. A $500 cash advance with a 4 percent fee ($20) and a 24 percent APR costs you $20 upfront plus about $10 in interest for the first month if you do not pay it back when ready. Over three months, you could pay $50 or more in fees and interest alone.
How cash advances affect your credit card balance and payments
When you take a cash advance, it shows up as a separate balance on your credit card statement, distinct from your regular purchase balance. Many card issuers explore your monthly payment to purchases first, then to the cash advance balance. This means if you carry both a purchase balance and a cash advance balance, your payment reduces the purchase balance faster, leaving the cash advance to accrue interest longer.
Some cards have different interest rates for purchases and cash advances, so the cash advance portion may grow at a faster rate than your purchases. Check your card's terms to see how payments are allocated and whether the rates differ. This information is in your cardholder agreement or on your issuer's website.
A cash advance also counts against your available credit. If your card has a $5,000 limit and you take a $1,000 cash advance, your available credit drops to $4,000 until you pay the advance back. This reduces your flexibility for other purchases and can lower your credit score if it raises your credit utilization ratio (the amount of credit you are using compared to your total limit).
Cheaper alternatives to a cash advance
Personal loans from a bank or credit union usually have lower interest rates than cash advances, often 6 to 36 percent depending on your credit score and the lender. You pay interest, but you do not pay an upfront fee, and the rate is fixed for the life of the loan. If you need $500 and have decent credit, a personal loan costs significantly less than a cash advance.
Paycheck advances from your employer let you borrow against future earnings. Some employers offer this as an employee benefit with no fee or low interest. Ask your HR or payroll department whether your workplace offers this option.
Borrowing from family or friends costs nothing if they do not charge interest, though you should agree on repayment terms in writing to avoid misunderstandings. Payday loans are another option, but they charge extremely high interest rates (often 400 percent APR or higher) and should be avoided if possible.
Debit cards and checking account overdraft protection let you access your own money without borrowing. If your bank offers overdraft protection, you can overdraw your account up to a set limit and pay a flat fee instead of interest. This is cheaper than a cash advance if you can pay it back quickly.
What to do if you have already taken a cash advance
Pay it back as fast as you can. The longer you carry the balance, the more interest you pay. If you have other debts with lower interest rates, prioritize the cash advance first because it is costing you the most money.
Contact your card issuer and ask whether they will let you transfer the cash advance balance to a different card with a lower rate or a 0 percent introductory period. Some issuers allow balance transfers for cash advances, though many charge a fee for the transfer. Even with a fee, a balance transfer to a 0 percent card might save you money if you can pay off the balance before the promotional period ends.
If you took the cash advance because you were in a financial emergency, look at what caused it. Did you have an unexpected expense? Did your income drop? Understanding the cause helps you avoid needing another cash advance in the future. Consider building an emergency fund of $500 to $1,000 so you have cash on hand for unexpected costs without borrowing.
Frequently Asked Questions
Can I take a cash advance if my credit card is maxed out?
No. A cash advance draws from your available credit, not from money you have already spent. If your card is maxed out, you have no available credit left and cannot take an advance. You would need to pay down your balance first or request a credit limit increase from your issuer.
Does a cash advance hurt my credit score?
It can. A cash advance raises your credit utilization ratio if it increases the total amount of credit you are using. It also appears as a separate transaction on your credit report. The bigger impact comes if you carry the balance and miss payments, which damages your score significantly.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another card, usually with a lower interest rate or a 0 percent introductory period. A cash advance withdraws cash against your credit line. Balance transfers are for moving existing debt; cash advances are for getting cash in hand. Both charge fees and interest, but balance transfers often have lower rates.
Can I use a credit card cash advance to pay another bill?
Yes, you can use the cash for any purpose. However, paying one bill with a cash advance from another card does not solve your underlying problem — you still owe the money, now at a higher interest rate. This strategy only makes sense if the cash advance rate is lower than the bill you are paying, which is rare.
How long does a cash advance stay on my credit report?
The cash advance itself does not stay on your report permanently. It appears as a transaction on your card statement and in your payment history. If you pay it back on time, it stops affecting your score after a few months. If you miss payments, the late payment stays on your report for seven years.