Yes, you can take cash from a credit card, but it costs more than a purchase and starts charging interest immediately
Most credit cards let you withdraw cash at an ATM or from a bank teller using your card's PIN. 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 You pay an upfront fee (usually 3 to 5 percent of the amount withdrawn), a higher interest rate than your purchase rate, and interest accrues from the day you withdraw it — not from your statement date like a purchase would.
If you need cash urgently, a cash advance is faster than a personal loan but more expensive than using a debit card or visiting your bank. The cost adds up quickly if you carry the balance, so it makes sense only if you can pay it back within a few days or weeks.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent plus a higher interest rate than purchases, with interest starting immediately.
- You can withdraw cash at any ATM that accepts your card's network, or ask a bank teller to give you cash over the counter.
- Your credit card company sets a separate cash advance limit, which may be lower than your overall credit limit.
- Paying back a cash advance should be your first priority because the interest rate is usually 5 to 10 percentage points higher than your purchase rate.
How to withdraw cash from your credit card
The simplest method is to use an ATM. Insert your card, enter your PIN, select "withdrawal" or "cash advance," and choose the amount. The ATM will dispense cash and charge your credit card account immediately. You can use any ATM that displays your card's network logo (Visa, Mastercard, American Express, or Discover).
If you prefer not to use an ATM, you can visit a bank branch and ask a teller for a cash advance. Bring your credit card and ID. The teller will process the transaction and hand you cash. This method works even if the bank is not your own bank, though some banks may charge an additional fee for serving a customer from another institution.
Some credit card companies also let you request a cash advance by phone or through their mobile app, though the money may be deposited into a linked bank account rather than handed to you in cash.
Fees and interest rates for cash advances
Every cash advance comes with an upfront fee, charged at the time of withdrawal. This fee is typically 3 to 5 percent of the amount you withdraw, though some cards charge a flat fee (like $10) if that is higher. A $300 cash advance at 4 percent costs $12 in fees alone.
The interest rate on a cash advance is separate from your purchase rate and is usually much higher. If your purchase APR is 18 percent, your cash advance APR might be 25 or 28 percent. Interest begins accruing the day you withdraw the cash, not at the end of your billing cycle like a purchase. This means even if you pay the full amount by your statement due date, you will still owe interest.
Your credit card statement will show the cash advance as a separate line item from purchases. When you make a payment, credit card companies typically apply it to the lowest-interest debt first (usually purchases), so your cash advance balance may sit and accumulate interest while you pay down other charges.
Cash advance limits and how they work
Your credit card company sets a cash advance limit separate from your overall credit limit. This limit is often 20 to 50 percent of your total credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $2,500. You cannot withdraw more than this amount, even if you have unused credit available.
The cash advance limit is set by the card issuer based on your credit history, income, and account age. You can call the customer service number on the back of your card to ask what your cash advance limit is. Some card issuers let you request a higher limit, though approval is not may provide.
When you take a cash advance, it reduces both your cash advance limit and your overall available credit. If you withdraw $500 and your cash advance limit is $1,000, you can only withdraw $500 more. Your available credit for purchases also drops by $500.
When a cash advance makes sense and when it does not
A cash advance is useful in genuine emergencies when you need cash immediately and have no other option. Examples include a car breakdown in a location with no ATMs, a medical expense that requires cash payment, or a situation where your debit card is lost or stolen. In these cases, the convenience of immediate cash may outweigh the cost.
A cash advance does not make sense if you are trying to pay off debt, fund a purchase you cannot afford, or cover regular expenses. The interest and fees will make your debt larger, not smaller. If you need cash regularly, a personal loan from a bank or credit union will have a lower interest rate and no upfront fee.
Avoid using a cash advance to pay another credit card or to fund gambling, lottery tickets, or other speculative spending. These uses often trigger additional restrictions or higher fees, and the debt will compound faster than you can repay it.
How cash advances affect your credit score
Taking a cash advance does not directly damage your credit score, but it can harm your score indirectly. A cash advance increases your credit utilization ratio — the amount of your available credit you are using. If you normally use 30 percent of your credit limit and take a $500 cash advance on a $5,000 limit, your utilization jumps to 40 percent. High utilization signals risk to credit scoring models and can lower your score by a few points.
The damage is temporary and reverses once you pay down the balance. However, if you carry the cash advance balance for months, the ongoing interest charges and high utilization will keep your score depressed. Paying off a cash advance quickly is one way to minimize the credit score impact.
Alternatives to cash advances
If you need cash but want to avoid the fees and high interest of a cash advance, consider these options first:
- Withdraw from your bank account: Use your debit card or visit your bank branch. There is no fee or interest charge.
- Borrow from family or friends: If possible, ask for a short-term loan with no interest. Put the agreement in writing to avoid misunderstandings.
- Personal loan from a bank or credit union: These have lower interest rates than credit card cash advances and fixed repayment terms. The application takes a few days, so this works only if you do not need cash immediately.
- Paycheck advance from your employer: Some employers offer advances on future wages with little or no fee. Ask your HR or payroll department.
- Payment plan with the creditor: If you owe money to a medical provider, utility company, or other business, ask if they offer a payment plan instead of requiring full payment upfront.
Frequently Asked Questions
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is a bad idea. You are borrowing at a high interest rate (often 25 percent or more) to pay off debt at a lower rate. You will end up owing more money overall. If you are trying to consolidate debt, a personal loan or balance transfer card (if you may have access to) is cheaper.
What happens if I do not pay back a cash advance?
The balance will accrue interest at your cash advance rate and damage your credit score. After 30 days of missed payments, the card issuer will report the delinquency to credit bureaus. After 180 days, they may close your account and send the debt to a collection agency. You could face lawsuits and wage garnishment.
Is there a way to avoid the cash advance fee?
No. The fee is charged automatically when you withdraw cash. Some cards marketed to people with poor credit charge higher fees (5 to 10 percent), while premium cards may charge lower fees (2 to 3 percent), but all cards charge something. The only way to avoid the fee is to not take a cash advance.
Can I take a cash advance on a secured credit card?
Yes, most secured cards allow cash advances, though the limit is often lower than on unsecured cards. The fees and interest rates are the same. Secured cards are designed to help you build credit, so using them for cash advances defeats that purpose.
Do I have to use my PIN to take a cash advance?
At an ATM, yes — you need your PIN to withdraw cash. At a bank teller, you only need your card and ID. Some card issuers let you set a PIN through their app or website if you do not have one, though this takes a day or two.