You can withdraw cash from a credit card, but it is not the same as using the card to buy something
A cash advance is when you use your credit card to pull money out of an ATM or get cash from a bank teller. The money goes into your bank account or your wallet as actual cash, not a purchase credit. Your credit card company treats it as a loan you owe them immediately, and they charge you fees and interest from day one — there is no grace period like there is with regular purchases.
Most credit cards allow cash advances, but the amount you can withdraw is usually much lower than your total credit limit. Your card issuer sets a separate cash advance limit, often 20 to 50 percent of your credit limit. If your credit limit is $5,000, your cash advance limit might be $1,000 or $2,500.
Key Takeaways
- Cash advances charge a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases, starting immediately with no grace period.
- Your cash advance limit is typically much lower than your credit limit, and you can find it by calling your card issuer or checking your account online.
- You can get a cash advance at an ATM using your PIN, at a bank teller, or sometimes at a casino or check-cashing store, depending on your card.
- The interest you owe on a cash advance accrues daily and is usually 5 to 10 percentage points higher than the rate on regular purchases.
Where you can withdraw cash and what each method costs
The most common way to get a cash advance is at an ATM. You insert your credit card, enter your PIN, and withdraw cash up to your cash advance limit. The ATM operator (your bank, the card issuer, or a third-party network) may charge you an ATM fee on top of the cash advance fee your credit card company charges. ATM fees range from $2 to $5 per transaction depending on the machine and your bank's rules.
You can also go to a bank teller and ask for a cash advance. Bring your credit card and a form of ID. The teller will process the transaction and give you cash. Banks do not usually charge an extra fee for this service beyond what your credit card company charges, but confirm before you proceed.
Some credit cards work at casinos, check-cashing stores, and money transfer services, though these locations often charge higher fees than ATMs or banks. Call your card issuer before you go to confirm the location accepts your card and what fees apply.
The fees and interest you will owe
A cash advance fee is charged by your credit card company and is usually a percentage of the amount you withdraw — typically 3 to 5 percent, with a minimum fee of $5 to $10. If you withdraw $200, you might pay a $6 to $10 fee. If you withdraw $1,000, you might pay $30 to $50.
Interest on a cash advance is higher than interest on regular purchases. While a purchase might carry an APR (annual percentage rate) of 15 to 20 percent, a cash advance APR is often 20 to 30 percent or higher. The interest starts accruing the day you withdraw the money — there is no grace period. If you carry the balance for a month, you will owe interest for that full month.
Your credit card company applies payments to your balance in a specific order set by law. Payments go to the lowest-interest debt first, which means if you have both purchases and a cash advance on your card, your payment goes to the purchase first, and the cash advance keeps accruing interest. This can make a cash advance very expensive if you cannot pay it back quickly.
How a cash advance affects your credit score
A cash advance itself does not appear on your credit report as a separate item. However, it increases your credit card balance, which raises your credit utilization ratio — the percentage of your available credit you are using. If your credit limit is $5,000 and you take a $1,000 cash advance, your utilization jumps from 0 to 20 percent (or higher if you already had a balance). High utilization can lower your credit score by 10 to 50 points, depending on your current score and credit history.
The impact is temporary. Once you pay off the cash advance, your utilization drops and your score recovers. But while the balance is there, it works against you.
Alternatives to a cash advance
If you need cash but want to avoid the high fees and interest, consider other options first. A personal loan from a bank or credit union usually has a lower interest rate than a cash advance and no upfront fee. You will need to apply and wait for approval, but the rate is often 6 to 15 percent depending on your credit score and the lender.
A balance transfer to a 0 percent APR card is another option if you have time to apply and are approved. You transfer the cash advance balance to a new card with an introductory 0 percent rate (usually 6 to 21 months), which gives you time to pay it down without interest. There is usually a 3 to 5 percent transfer fee, but it is still cheaper than a cash advance interest rate over time.
If you need cash urgently and have a bank account, ask your bank about a short-term loan or overdraft protection. Some banks offer small loans at lower rates than credit card cash advances, or they will cover overdrafts at a flat fee rather than a percentage.
How to find your cash advance limit
Your cash advance limit is not the same as your credit limit. To find it, log into your credit card account online or call the customer service number on the back of your card. The representative will tell you your current cash advance limit and how much you can withdraw right now.
You can also request an increase to your cash advance limit, though the card issuer is not required to grant it. A higher limit may be approved if you have a good payment history and low utilization on the card.
Frequently Asked Questions
Can I use a credit card to withdraw money from any ATM?
Most credit cards work at ATMs that display the card network logo (Visa, Mastercard, American Express, Discover). However, some ATMs may not accept credit card cash advances, or they may charge a higher fee. Call your card issuer to confirm which ATM networks accept your card before you try to withdraw.
What happens if I withdraw more than my cash advance limit?
The ATM or teller will decline the transaction if you try to withdraw more than your limit. You cannot exceed your cash advance limit, even if you have available credit on your card. You would need to request a higher limit from your card issuer first.
Do I have to pay back a cash advance right away?
No, but interest starts accruing immediately. You can carry the balance month to month, but you will owe interest every day the balance is unpaid. Paying it back as quickly as possible is the cheapest option because interest compounds daily.
Will a cash advance show up on my credit report?
The cash advance itself does not appear as a separate line item. However, it increases your credit card balance, which raises your utilization ratio and may lower your credit score temporarily. Once you pay it off, the impact goes away.
Can I get a cash advance if I have bad credit?
If you already have a credit card, you can get a cash advance regardless of your credit score — your card issuer has already approved you for credit. However, your cash advance limit may be lower than someone with better credit, and your interest rate is set based on your card terms, not your current credit score.