Yes, but it costs money and counts as a cash advance
You can move money from a credit card to a bank account, but your card issuer will charge you a fee — usually 3 to 5 percent of the amount — and the interest rate on that money starts when ready, often at a higher rate than your regular purchases. This transaction is called a cash advance, and it is treated differently from a normal credit card purchase.
The main ways to do this are: using an ATM with your credit card, requesting a check from your card issuer, or using a balance transfer service that your bank or card company offers. Each method has different costs and timelines, and each one should be a last resort rather than a regular way to move money.
Before you do this, it is worth asking yourself why you need the money. If you are short on cash for bills or emergencies, a cash advance is expensive. If you are trying to move money between accounts you own, there are cheaper ways.
Key Takeaways
- A cash advance from your credit card charges a fee (usually 3 to 5 percent) plus interest that starts right away, making it one of the most expensive ways to borrow money.
- You can get a cash advance at an ATM, by requesting a check from your card issuer, or through a balance transfer service, but all three cost money.
- Interest on a cash advance is typically higher than the rate on regular purchases, and there is no grace period — interest accrues from day one.
- If you need money for an emergency, a personal loan or a line of credit from your bank is usually cheaper than a credit card cash advance.
How a cash advance actually works
When you take a cash advance, your credit card company is lending you money against your credit limit, just like a purchase. The difference is in the cost. A purchase might have a grace period of 20 to 30 days before interest kicks in, but a cash advance starts charging interest on day one. There is no grace period.
The fee itself is separate from the interest. Your card issuer will charge you a flat fee (for example, $5 or $10) or a percentage of the amount you withdraw, whichever is higher. Then, on top of that, interest accrues daily at a rate that is often 5 to 10 percentage points higher than your regular purchase rate.
Example: if you take out $500 as a cash advance on a card with a 5 percent cash advance fee and a 25 percent interest rate, you pay $25 upfront, plus interest starting when ready. If you pay it back in one month, the interest alone could be around $10. You have paid $35 just to borrow $500 for 30 days.
Three ways to move money from your credit card
ATM withdrawal: You can use your credit card at most ATMs to withdraw cash, just as you would with a debit card. The money goes directly into your pocket, and you can then deposit it into your bank account. This is the fastest method but also the most visible — you will see the cash advance fee and interest charges on your next statement.
Check request: Some card issuers will mail you a check drawn against your credit line. You write the check to yourself or your bank, deposit it into your account, and the amount is charged to your credit card as a cash advance. This takes several business days for the check to arrive and clear, but it works the same way as an ATM withdrawal in terms of fees and interest.
Balance transfer or money transfer: A few card issuers offer a service where they transfer money directly from your credit line to your bank account. This is less common than ATM withdrawals or checks, and it still counts as a cash advance with the same fees and interest. Ask your card issuer whether this option is available on your account.
Why this is expensive compared to other options
A cash advance is one of the most costly ways to borrow money because of the combination of an upfront fee, a high interest rate, and no grace period. If you need money for an emergency, other options are usually cheaper.
A personal loan from a bank or credit union typically charges 6 to 36 percent interest depending on your credit, with no upfront fee, and you have a set repayment schedule. A line of credit from your bank works similarly — you borrow what you need and pay interest only on what you use. Both of these are less expensive than a cash advance if you have time to set them up.
If you are in a true emergency and need cash today, a cash advance might be your only option. But if you have a few days, calling your bank about a personal loan or line of credit is worth the time.
What happens to your credit score
A cash advance does not directly hurt your credit score the way a missed payment does, but it can indirectly lower your score in two ways. First, it increases your credit utilization — the percentage of your available credit that you are using. If you normally use 30 percent of your limit and a cash advance pushes that to 60 percent, your score may drop slightly.
Second, if you cannot pay back the cash advance quickly, the interest and fees pile up, making it harder to pay off the balance. Carrying a high balance over time does lower your score. The cash advance itself is not the problem; the debt that follows is.
How to avoid needing a cash advance
The best way to avoid a cash advance is to keep a small emergency fund in your bank account — even $500 to $1,000 can cover most unexpected expenses. If you do not have one yet, start by setting aside whatever you can each month, even $20 or $50.
If you are using a cash advance to cover regular bills because your income is not enough, that is a sign to look at your budget or explore other income options. A cash advance is a temporary fix that makes the problem worse because of the interest and fees.
If you are thinking about a cash advance to pay off other debt, stop and talk to a nonprofit credit counselor first. Many offer free consultations and can help you find a cheaper way to consolidate or pay down what you owe. The National Foundation for Credit Counseling (NFCC) has a search tool on their website to find counselors in your area.
Frequently Asked Questions
Can I use a credit card cash advance to pay another credit card bill?
Technically yes, but it is a very expensive way to move money between cards. You pay the cash advance fee and high interest rate, and you are not actually reducing your total debt — you are just moving it from one card to another. If you are trying to consolidate debt, a balance transfer (moving a balance from one card to another at a lower rate) or a personal loan is cheaper.
What if I pay back the cash advance right away?
You still pay the upfront fee, and you still pay interest for however many days the money is outstanding. If you take out $500 on day one and pay it back on day three, you owe the fee plus three days of interest. The interest is calculated daily, so there is no way to avoid it entirely.
Is a cash advance the same as a balance transfer?
No. A balance transfer moves an existing balance from one credit card to another, usually at a lower interest rate. A cash advance is borrowing new money against your credit line and withdrawing it as cash. Balance transfers are for moving debt; cash advances are for getting cash.
Can I get a cash advance if my credit is bad?
Yes. As long as your credit card account is open and you have available credit, you can take a cash advance regardless of your credit score. Your card issuer has already decided to lend to you; a cash advance is just a different way of using that credit.
What is the difference between a cash advance and a payday loan?
Both are expensive short-term borrowing, but a payday loan is typically faster and charges even higher interest rates — sometimes 400 percent or more. A cash advance is expensive, but it is usually cheaper than a payday loan. If you are considering either one, a personal loan or credit counseling is worth exploring first.