Moving money from a credit card to your bank account costs money and usually isn't worth it

A cash advance lets you withdraw money from your credit card at an ATM or bank, or transfer it to a checking account. But the cost is steep: you'll pay a fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases—often 20 to 30 percent, starting immediately with no grace period. If you need cash, this is almost never the cheapest way to get it.

The only time a cash advance makes sense is if you have no other option and the alternative costs more. For example, if you'd overdraft your checking account and face a $35 overdraft fee, a cash advance might be cheaper. But in most situations, a personal loan, payday loan, or borrowing from someone you know will cost you less.

Key Takeaways

  • A cash advance charges a fee (3 to 5 percent) plus a much higher interest rate than your regular credit card purchases, with interest starting immediately.
  • You can get a cash advance at an ATM, a bank teller, or by transferring money to your bank account through your credit card company's app or website.
  • Interest on a cash advance accrues daily and is not forgiven if you pay off your statement balance—you must pay the cash advance balance separately.
  • Personal loans, credit card balance transfers, and even payday loans often cost less than a cash advance, depending on your situation.

How to get a cash advance if you decide to proceed

You have three main routes. The first is to visit an ATM with your credit card and withdraw cash directly, just like a debit card. The second is to go to a bank branch (yours or the card issuer's) and ask a teller for a cash advance. The third is to use your credit card company's mobile app or website to transfer money directly to your checking account—this is called a balance transfer check or direct transfer, depending on the issuer.

The app or website route is often fastest and safest because you don't handle cash and the money lands in your account within one to three business days. Log into your credit card account, look for "cash advance" or "transfer balance" options, enter your bank account details, and confirm the amount. Your card issuer will show you the fee and interest rate before you complete the transfer.

If you use an ATM or bank teller, bring your card and a photo ID. The teller or ATM will ask how much you want and may have a daily limit (often $500 to $1,000 at an ATM, higher at a bank branch). You'll receive cash immediately, but you'll pay the fee and interest will start accruing that day.

What the fees and interest actually cost

Let's say you take a $500 cash advance. Your card charges a 4 percent fee and 25 percent annual interest. You pay $20 upfront (the fee), and if you pay back the $500 in one month, you'll owe roughly $10 in interest. Total cost: $30, or 6 percent of what you borrowed.

If you take three months to pay it back, the interest compounds and you'll owe closer to $31 in interest alone. If you only make minimum payments and carry the balance for six months, you could owe $60 or more in interest plus the original $20 fee.

The key difference from a regular purchase is that interest starts the day you take the advance—there's no grace period. Even if you pay your full statement balance on time, the cash advance interest is still due. You have to pay down the cash advance balance specifically to stop the interest from growing.

Cheaper alternatives to consider first

A personal loan from a bank or credit union usually has a lower interest rate than a cash advance, often 6 to 36 percent depending on your credit. You pay one fixed monthly payment, and the interest is lower because the loan is secured by your creditworthiness, not by the card's terms. If you have decent credit, this is usually cheaper than a cash advance.

A balance transfer to a different credit card might offer 0 percent interest for 6 to 21 months if you have good credit. This doesn't give you cash, but if you're trying to move debt around or free up credit on your current card, it's worth comparing. You'll pay a transfer fee (usually 3 to 5 percent), but no interest during the promotional period.

A payday loan charges high interest too—often 400 percent APR or more—but if you need $300 and can pay it back in two weeks, the total cost might be $50 to $100, which is less than a cash advance on some cards. This is not a good long-term solution, but for a short emergency it can be cheaper.

Borrowing from family or friends, if that's an option, costs nothing and has no interest. If you're short on cash for a specific reason—a car repair, a medical bill—asking directly is worth considering before you pay any fee at all.

How cash advances show up on your credit report

A cash advance doesn't hurt your credit score in the moment, but it does increase your credit utilization—the percentage of your available credit you're using. If you have a $5,000 limit and take a $500 cash advance, your utilization jumps to 10 percent. High utilization (above 30 percent) can lower your credit score slightly.

More importantly, if you can't pay back the cash advance on time, late payments will show up on your credit report and damage your score. A cash advance is still a debt, and missed payments have the same consequences as any other credit card debt.

What happens if you can't pay it back

If you miss a payment on a cash advance, your card issuer will charge a late fee (usually $25 to $40) and may raise your interest rate to a penalty rate, sometimes 30 percent or higher. The interest keeps compounding, and the debt grows faster.

If you fall far enough behind, the card issuer may close your account and send the debt to a collection agency. This will seriously damage your credit and may result in a lawsuit if the amount is large enough. If you're struggling to pay back a cash advance, contact your card issuer as soon as possible—some offer hardship programs that lower your interest rate or pause payments temporarily.

Frequently Asked Questions

Can I take a cash advance on a credit card with no credit history?

Most card issuers allow cash advances for anyone with an active account, regardless of credit history. However, new cardholders sometimes have a lower cash advance limit than their overall credit limit. Check your card's terms or call the issuer to find out your limit.

Does a cash advance affect my credit score right away?

Not immediately, but it increases your credit utilization, which can lower your score slightly. If you miss payments, the damage is much worse. Late payments stay on your report for seven years and can drop your score by 100 points or more.

What's the difference between a cash advance and a balance transfer?

A cash advance gives you actual cash (or money in your bank account) but charges high interest immediately. A balance transfer moves debt from one card to another, often with a 0 percent promotional rate for several months. Balance transfers don't give you cash—they're for moving existing debt.

Can I take a cash advance and then dispute it?

No. Disputes are for unauthorized charges or fraud. If you authorized the cash advance, you owe it. Disputing a legitimate cash advance is fraud and can result in criminal charges.

Is there a way to avoid the cash advance fee?

Not through your credit card company. Some cards don't charge a fee for balance transfers to other cards (though they charge interest), but cash advances always have a fee. Your only option is to use a different method to get cash, like a personal loan or asking to borrow money.