Yes, you can withdraw cash from a credit card, but it is not the same as using the card to buy something
Most credit cards let you take out cash at an ATM or from a bank teller. This is called a cash advance. The money comes from your credit limit, just like a purchase does, but the fees and interest rates are steeper. You start paying interest immediately — there is no grace period like there is for regular purchases — and the transaction fee is usually 3 to 5 percent of the amount you withdraw.
The interest rate on a cash advance is often several percentage points higher than the rate on regular purchases. If your card charges 18 percent APR on purchases, the cash advance rate might be 24 or 25 percent. You need to check your card's terms to know the exact rate and fee, because they vary by card and by issuer.
Cash advances count against your credit limit. If your limit is $5,000 and you take out $1,000 in cash, you have $4,000 left to spend on purchases. The cash advance payment goes into your monthly bill alongside any other charges.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent) and a higher interest rate than regular purchases, with interest starting immediately.
- You can withdraw cash at an ATM using your credit card PIN, or ask a bank teller to process the advance for you.
- The amount you withdraw reduces your available credit and counts toward your credit limit.
- If you need cash regularly, a debit card or personal loan usually costs less than repeated cash advances.
How to take a cash advance at an ATM
Insert your credit card into an ATM that accepts it — most do, but some ATMs only take debit cards. Enter your PIN. Select "cash advance" or "withdraw cash" from the menu. The ATM will show you the fee before you confirm. Enter the amount you want to withdraw, up to your available credit and the ATM's daily limit (often $500 to $1,000).
The ATM will dispense the cash and print a receipt. The transaction appears on your credit card statement within one or two business days. You will see both the cash advance amount and the fee listed separately.
If you do not know your credit card PIN, call the number on the back of your card and ask the issuer to send you one or reset it. You cannot take a cash advance at an ATM without a PIN.
Getting a cash advance from a bank teller
You can also walk into a bank branch and ask a teller for a cash advance. Bring your credit card and a photo ID. Tell the teller how much cash you want. The teller will process the transaction, show you the fee, and give you the cash. This method works even if you do not have a PIN set up yet.
Some banks charge an additional fee for processing a cash advance at the teller window — this is separate from the fee your credit card issuer charges. Ask before you hand over your card. The transaction posts to your account the same day or the next business day.
Why cash advances cost more than purchases
Credit card issuers treat cash advances differently because they are riskier. When you buy something with your card, the merchant guarantees the transaction and the card issuer can dispute it if something goes wrong. With cash, once you have it, there is no way to reverse the transaction or recover the money if you do not repay it.
The higher interest rate and immediate interest accrual are how issuers offset that risk. A $500 cash advance at 5 percent fee plus 24 percent APR costs you $25 up front and then roughly $10 per month in interest if you carry the balance. A $500 purchase at 18 percent APR with a 21-day grace period costs you nothing in interest if you pay it off in full by the due date.
The math gets worse the longer you carry the balance. After six months, that $500 cash advance could cost you $75 or more in interest alone.
Cheaper ways to get cash when you need it
If you need cash regularly, a debit card linked to a checking account lets you withdraw from any ATM in your bank's network for free. If you need a larger amount, a personal loan from a bank or credit union usually has a lower interest rate than a credit card cash advance, even though you pay a one-time origination fee.
A payday loan or title loan may seem faster, but they charge much higher fees and interest rates than credit card cash advances — sometimes 400 percent APR or more. Avoid them if you can.
If you are in a bind and need cash for an emergency, contact your bank or credit union first. Many offer short-term loans or overdraft protection that cost less than a cash advance.
How cash advances affect your credit score
A cash advance itself does not hurt your credit score, but carrying a high balance does. When you take out a cash advance, your credit utilization — the percentage of your total credit limit you are using — goes up. If you use more than 30 percent of your available credit, your score may drop.
Missing a payment on a cash advance will damage your score. The interest charges also make it easier to fall behind, since the balance grows faster than it would on a regular purchase. If you take a cash advance, prioritize paying it off quickly to keep your utilization low and avoid missed payments.
Frequently Asked Questions
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a higher interest rate and fee. A balance transfer moves debt from one card to another and usually has a lower introductory rate for a set period. Cash advances are for getting cash; balance transfers are for moving existing debt.
Can I take a cash advance if my credit is bad?
If you have a credit card, you can take a cash advance up to your available credit limit, regardless of your credit score. The card issuer already approved your credit limit when you opened the account. Your current credit score does not change that limit.
Do I have to pay back a cash advance?
Yes. A cash advance is a loan from your credit card issuer. You must repay it, plus interest and fees. If you do not pay, the debt will be reported to credit bureaus and may lead to collection action.
Is there a daily limit on how much cash I can withdraw?
Yes. Your credit card issuer sets a cash advance limit, which may be lower than your total credit limit. ATMs also have daily withdrawal limits, usually $500 to $1,000. Check your card's terms or call the issuer to find out your specific limit.
Can I take a cash advance on someone else's credit card?
No. You need the cardholder's PIN to use an ATM, and a teller will ask for photo ID. Using someone else's card without permission is fraud. If you are an authorized user on the account, ask the cardholder for permission and their PIN.