Yes, you can withdraw cash using a credit card, but it costs more than a regular purchase
You can take cash out of an ATM or ask a bank teller for cash using your credit card. This is called a cash advance. The moment you do it, your credit card company charges you a fee — usually 3 to 5 percent of the amount you withdraw — and starts charging you interest right away, with no grace period. A $200 cash advance might cost you $6 to $10 in fees alone, plus interest that begins accruing immediately.
The interest rate on a cash advance is almost always 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 pay interest every single day from the moment you withdraw the cash until you pay it back in full — there is no interest-free period like there often is for purchases.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent) the moment you withdraw, plus a higher interest rate than purchases.
- Interest on a cash advance starts immediately and accrues daily; there is no grace period.
- You can get a cash advance at an ATM using your PIN, at a bank teller window, or through a convenience check from your card issuer.
- Your credit card company reports the cash advance to credit bureaus, and it counts toward your credit utilization ratio.
- Most credit cards have a cash advance limit that is lower than your overall credit limit.
Where you can withdraw cash with a credit card
The most common way is to use an ATM. Insert your credit card and enter your PIN, then select the cash advance option. The ATM will show you the fee before you confirm — usually $2 to $5 per transaction on top of your card's cash advance fee. You can also go to a bank teller and ask for a cash advance; they will process it the same way an ATM does, though some banks charge an additional fee for teller service.
Some credit card issuers send convenience checks with your account. You can write one of these checks to yourself or to someone else, deposit it in your bank account, and withdraw the cash. The card company treats it as a cash advance, so the same fees and interest rates apply. Check your credit card statements or contact your issuer to see if your card comes with convenience checks.
How much you can withdraw
Your credit card company sets a cash advance limit that is separate from your regular credit limit. You might have a $5,000 credit limit but only a $1,000 cash advance limit. This limit appears in your account online or you can call your card issuer to ask. The limit can change based on your payment history and credit score.
The cash advance counts toward your overall credit limit. If you withdraw $500 in cash and have a $5,000 limit, you now have $4,500 available for purchases. This also affects your credit utilization ratio — the percentage of your available credit you are using — which credit bureaus use to calculate your credit score.
The real cost of a cash advance
A $300 cash advance with a 4 percent fee costs $12 right away. If your cash advance rate is 24 percent APR and you pay back $50 per month, you will pay roughly $40 in interest before the balance is gone. The total cost is about $52 for borrowing $300 for a few months.
Compare this to a regular purchase: the same $300 purchase at 18 percent APR with $50 monthly payments costs about $30 in interest, and there is no upfront fee. The cash advance costs nearly twice as much for the same amount borrowed.
If you carry the cash advance for longer, the interest compounds. Paying only the minimum payment means you stay in debt longer and pay far more in interest. Many people find that a personal loan, a line of credit from their bank, or even a payday loan (though expensive) costs less than a credit card cash advance.
How a cash advance affects your credit report
The cash advance shows up on your credit report as a transaction on your credit card account. It does not appear as a separate loan. However, it does count toward your credit utilization ratio immediately. If you use 80 percent of your available credit (including the cash advance), your credit score can drop, because high utilization signals financial stress to lenders.
The cash advance itself does not hurt your credit score, but missing payments on it does. If you do not pay back the cash advance on time, the late payment appears on your report and damages your score. The longer you carry the balance, the more interest you pay and the longer your utilization stays high.
When a cash advance might make sense
A cash advance is rarely the best option, but there are narrow situations where it might be the fastest way to get cash. If you need money urgently and have no other source — no savings, no access to a personal loan, no friends or family who can lend — a cash advance is faster than waiting for a loan decision. You get the cash within minutes.
However, before you take a cash advance, check whether your bank offers a short-term loan, whether you have a line of credit available, or whether you can borrow from a credit union. These almost always cost less. If you are considering a cash advance to pay another debt, stop and talk to a credit counselor first — there may be a better path.
How to minimize the cost if you do take a cash advance
If you have decided a cash advance is necessary, pay it back as fast as possible. Every day you carry the balance, interest accrues. Set up a plan to pay the full amount within one or two months if you can, rather than making minimum payments.
Before you withdraw, check your card's terms to confirm the cash advance fee and interest rate. Some cards offer a lower cash advance fee for the first 30 days, or a promotional rate — read the fine print. Also confirm your cash advance limit so you do not try to withdraw more than allowed.
After you pay off the cash advance, your available credit goes back up and your utilization ratio improves. Your credit score will recover, though it takes time.
Frequently Asked Questions
Can I use a credit card to withdraw cash at any ATM?
Yes, you can use your credit card at most ATMs that accept Visa or Mastercard, but not all ATMs accept credit cards — some only accept debit cards. Look for the Visa or Mastercard logo on the ATM. You will pay both an ATM operator fee (usually $2 to $5) and your card's cash advance fee (usually 3 to 5 percent).
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a fee plus a high interest rate. A balance transfer moves debt from one card to another, usually with a lower introductory rate. Balance transfers are for moving existing debt; cash advances are for getting new cash.
Does a cash advance hurt my credit score?
The cash advance itself does not hurt your score, but it increases your credit utilization ratio, which can lower your score slightly. If you miss payments on the cash advance, the late payment will damage your score. Once you pay it off, your utilization drops and your score recovers.
Can I get a cash advance if I have a low credit limit?
Yes. Your cash advance limit is set separately from your credit limit and is usually lower. Even if your credit limit is $500, you might have a $200 cash advance limit. Call your card issuer to find out what your cash advance limit is.
What happens if I cannot pay back the cash advance?
The balance stays on your card and interest keeps accruing daily. If you miss payments, the late payment appears on your credit report and your score drops. The card issuer may increase your interest rate or close your account. Contact your card issuer as soon as you know you cannot pay — they may offer a hardship plan or lower rate.