Yes, you can withdraw cash using your credit card, but it costs more than a purchase
You can pull cash out of an ATM using your credit card, but the bank charges you a cash advance fee (usually 3 to 5 percent of the amount) plus a higher interest rate than you pay on regular purchases. The interest starts accruing immediately — there is no grace period like there is for credit card purchases. A $500 cash advance can cost you $15 to $25 just to take it out, then another $7 to $10 in interest over a month if you do not pay it back right away.
The process is straightforward: insert your card into any ATM, select "cash advance" or "withdrawal," enter your PIN, and take the cash. But the real cost is in what happens after. Most people use cash advances only when they have no other option, because the fees and interest add up quickly.
Key Takeaways
- Cash advances charge a fee of 3 to 5 percent upfront, plus interest that begins the same day you withdraw the money.
- The interest rate on a cash advance is typically 2 to 3 percentage points higher than your regular purchase APR.
- You have no grace period on cash advances — interest accrues from day one, unlike purchases where you may have 21 to 25 days interest-free.
- Your credit card's cash advance limit is often lower than your overall credit limit, and you can check it in your cardholder agreement or by calling your bank.
- A $500 cash advance can cost $35 to $50 in fees and interest over the first month if you carry the balance.
How much you can withdraw and where
Your credit card issuer sets a cash advance limit that is separate from your overall credit limit. This limit is often 20 to 50 percent of your credit limit, though it varies by card and issuer. You can find your cash advance limit in your cardholder agreement, on your online account dashboard, or by calling the customer service number on the back of your card.
You can withdraw cash at any ATM that displays your card's logo — Visa, Mastercard, American Express, or Discover. You can also get a cash advance at a bank teller window, even if it is not your bank, though some banks charge an additional fee for this service. ATMs in convenience stores and bars typically charge their own surcharge on top of your credit card company's fee.
The fees and interest you will pay
A cash advance fee is charged as a percentage of the amount you withdraw, usually 3 to 5 percent. Some cards charge a flat fee instead (like $10 per advance), but percentage-based fees are more common. A $200 withdrawal at 4 percent costs $8 upfront; a $1,000 withdrawal costs $40.
The interest rate on cash advances is higher than your regular purchase APR. If your card charges 18 percent APR on purchases, the cash advance APR might be 21 or 22 percent. This rate applies from the day you withdraw the money — there is no interest-free period. If you withdraw $500 and pay it back in 30 days, you owe roughly $26 in interest on top of the $15 to $25 fee.
Interest compounds daily, so the longer you carry the balance, the more you pay. Carrying a $500 cash advance for three months at 21 percent APR costs about $26 in interest alone, plus the initial fee.
Why cash advances are more expensive than other borrowing options
A credit card cash advance is one of the most expensive ways to borrow money. A personal loan from a bank or credit union typically charges 6 to 36 percent APR with no upfront fee. A payday loan charges a flat fee (often $15 to $20 per $100 borrowed) but is meant to be repaid in two weeks. A cash advance fee plus high interest makes credit cards costlier than both for any amount you do not pay back within a few days.
Even a credit card purchase at your regular APR is cheaper than a cash advance, because you get a grace period on purchases. If you need cash and have available credit, using a balance transfer check (if your card offers one) or asking for a short-term personal loan is almost always better than a cash advance.
When a cash advance might make sense
A cash advance is worth considering only in specific situations: you need cash immediately, you have no other source of funds, and you can pay it back within a week or two. Examples include an unexpected car repair that a mechanic will not put on a card, or a medical bill that requires cash payment.
If you are considering a cash advance to cover a regular expense or to pay another debt, stop and explore alternatives first. A personal loan, a line of credit from your bank, or even asking family for a short-term loan will cost you less. If you find yourself taking cash advances regularly, that is a sign your budget needs adjustment or you need a different borrowing tool.
How to minimize the cost if you do take a cash advance
If you decide to take a cash advance, pay it back as quickly as possible. Every day you carry the balance, interest accrues. If you can repay it within a week, the interest cost stays under $5 on a $500 advance. Waiting a month turns that into $26.
Withdraw only what you need. A $200 cash advance costs less in fees and interest than a $500 one, even if you end up needing more cash later. Multiple small advances cost more in fees, so find the balance between taking out enough to cover your need and not taking out more than necessary.
Pay the cash advance balance before you make any other credit card purchases. Credit card companies apply your payment to the lowest-interest debt first, which means your cash advance (the highest-interest balance) sits and accrues interest while you pay off purchases. If you pay $200 toward a card with a $500 cash advance and $300 in purchases, the payment goes to the purchases first.
Frequently Asked Questions
Does taking a cash advance hurt my credit score?
A cash advance itself does not directly hurt your score, but it increases your credit utilization ratio (the amount of available credit you are using), which can lower your score slightly. If you carry the balance and miss a payment, that will hurt your score more significantly.
Can I take a cash advance if my credit limit is maxed out?
No. Your cash advance limit is drawn from your overall credit limit. If you have used your full limit, you cannot take a cash advance. You would need to pay down your balance first.
What is the difference between a cash advance and a balance transfer?
A balance transfer moves debt from one card to another and usually has a lower fee (0 to 3 percent) and a promotional interest rate. A cash advance gives you physical cash and charges higher fees and interest immediately. Balance transfers are cheaper if you need to move existing debt; cash advances are for getting new cash.
Can I use a cash advance to pay off another credit card?
Technically yes, but it is expensive. You pay the cash advance fee and high interest rate, then use that cash to pay another card. You are better off doing a balance transfer from one card to another, which costs less.
What happens if I cannot pay back a cash advance?
The balance stays on your card and accrues interest at your cash advance APR. If you miss payments, late fees apply and your credit score drops. The debt does not go away — it grows. Contact your card issuer if you are struggling to pay; some offer hardship programs that lower your interest rate temporarily.