You can take cash out with a credit card, but it costs more than a regular purchase and starts charging interest right away

A cash advance is a withdrawal of money from your credit card account, usually at an ATM or bank teller. Unlike a purchase, which may have a grace period before interest kicks in, a cash advance begins accruing interest immediately — there is no interest-free window. You also pay an upfront fee, typically 3 to 5 percent of the amount withdrawn, though some cards charge a flat dollar amount instead.

The interest rate on cash advances is usually higher than the rate on purchases. If your card charges 18 percent APR on purchases, the cash advance rate might be 22 or 25 percent. That combination — immediate interest plus a higher rate plus an upfront fee — makes cash advances one of the most expensive ways to borrow money on a credit card.

Key Takeaways

  • Cash advances charge an upfront fee (usually 3 to 5 percent) plus a higher interest rate than purchases, with interest starting immediately.
  • You can withdraw cash at an ATM using your credit card PIN, or visit a bank or check-cashing location to request a cash advance over the counter.
  • The amount you can withdraw is limited by your cash advance limit, which is often lower than your overall credit limit and is set by your card issuer.
  • Interest on a cash advance accrues daily and compounds, so the longer you carry the balance, the more you pay.
  • Paying off a cash advance takes priority over paying off purchases when you make a payment, so the purchase balance may keep accruing interest.

Where and how to withdraw cash with your credit card

The most common method is to use an ATM. Insert your credit card and enter your PIN (which you may need to set up first if you have never used the card for cash). The ATM will show your available cash advance limit and let you choose the amount. The withdrawal is processed immediately, and the fee appears on your next statement.

You can also visit a bank branch or credit union and ask the teller for a cash advance. Bring your card and ID. Some check-cashing stores and money transfer services also offer cash advances on credit cards, though they may charge additional fees on top of what your card issuer charges.

Not all ATMs accept credit cards — some are set up for debit cards only. If an ATM rejects your card, try another location or go to a bank branch instead. International ATMs may charge foreign transaction fees in addition to the cash advance fee, so avoid using your credit card for cash abroad unless it is an emergency.

Understanding cash advance limits and fees

Your card issuer sets a separate cash advance limit, which is often much lower than your overall credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $1,500. You cannot withdraw more than this limit, even if you have available credit on the card.

The fee structure varies by card. Most cards charge a percentage of the amount withdrawn — typically 3, 4, or 5 percent — with a minimum fee (often $5 or $10) and sometimes a maximum. A few cards charge a flat fee instead, such as $10 per advance regardless of amount. Check your card's terms or call the issuer to find out which applies to yours.

Some cards offer a promotional period with no cash advance fee for new cardholders, but this is rare. Read the fine print carefully, because the fee may apply even during the promotional period if you use a non-bank ATM or withdraw cash abroad.

How interest and payments work on cash advances

Interest on a cash advance starts accruing the day you withdraw the money. Unlike a purchase, there is no grace period. If you withdraw $500 on the 15th of the month and your cash advance APR is 24 percent, you are already paying interest by the 16th.

Interest compounds daily, meaning you pay interest on the interest. The longer the balance sits, the faster it grows. If you carry a $500 cash advance for three months at 24 percent APR, you will pay roughly $30 in interest alone — plus the original 3 to 5 percent upfront fee.

When you make a payment on your credit card, the payment is applied to your balances in a specific order set by law. Purchases are paid off first, then cash advances. This means if you have both a purchase balance and a cash advance balance, your payment goes toward the purchase first, and the cash advance keeps accruing interest at the higher rate. To pay off a cash advance faster, you may need to make a payment larger than your minimum.

Alternatives to cash advances

If you need cash, consider these options before using a credit card cash advance. A debit card withdrawal from your bank account costs nothing and does not accrue interest. A personal loan from a bank or credit union usually has a lower interest rate than a cash advance, though it requires an application and takes a few days to process.

Some employers offer paycheck advances or loans to employees. If you have a 401(k) or similar retirement account, you may be able to borrow against it, though this has tax consequences if you do not repay it on time. A credit card purchase (if you can use the card instead of cash) is cheaper than a cash advance because it may have a grace period and a lower interest rate.

If you are in a financial crisis and need cash urgently, contact a local nonprofit credit counselor through the National Foundation for Credit Counseling. They can discuss your situation and help you find lower-cost options.

What happens if you cannot pay back a cash advance

If you carry a cash advance balance and only make minimum payments, the balance will take years to pay off because most of your payment goes toward interest. Your credit score will drop if the balance is high relative to your limit, and it will drop further if you miss a payment.

If you miss a payment, your card issuer may increase your interest rate, charge a late fee, and report the missed payment to credit bureaus. After 30 days late, the account may be flagged as delinquent. After 180 days, the card issuer may charge off the account and sell the debt to a collection agency.

If you are struggling to pay back a cash advance, contact your card issuer and ask about hardship programs. Some issuers offer temporary interest rate reductions or payment plans for cardholders in financial difficulty. This will not erase the debt, but it may make it more manageable.

Frequently Asked Questions

Can I use a credit card to withdraw cash at any ATM?

Most ATMs accept credit cards, but some are set up for debit cards only. If an ATM rejects your card, try another location or visit a bank branch. International ATMs may work, but they often charge foreign transaction fees in addition to the cash advance fee.

Is the cash advance fee the same as the interest rate?

No. The fee is a one-time charge (usually 3 to 5 percent) applied when you withdraw the cash. The interest rate is what you pay daily on the balance you owe. You pay both — the fee upfront and the interest over time.

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 immediately. A balance transfer moves debt from one card to another and may have a lower rate or a promotional period with no interest. Balance transfers are for moving existing debt; cash advances are for getting cash.

Will a cash advance hurt my credit score?

A single cash advance does not directly hurt your score, but carrying a high balance relative to your limit will lower your score. Missing a payment or defaulting on the balance will damage your score significantly.

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

Yes, but your cash advance limit is usually lower than your overall credit limit. If your credit limit is $500, your cash advance limit might be $200 or $300. Contact your card issuer to find out what your cash advance limit is.