You can withdraw money from a credit card, but it costs more than a regular purchase
Yes, you can take cash out of a credit card account. The process is called a cash advance, and it works like this: you go to an ATM, a bank teller, or sometimes a store cashier, and withdraw money directly from your credit card's available balance. The money goes into your hand or your bank account, just like a debit card withdrawal would.
The catch is that cash advances are expensive. Your credit card company charges you a fee (usually 3 to 5 percent of the amount you withdraw) just for taking the cash out. On top of that, the interest rate on a cash advance is almost always higher than the rate on regular purchases — sometimes 5 to 10 percentage points higher. That interest starts accruing when ready, with no grace period like you might have on a purchase. If you borrow $500 as a cash advance at a 25 percent interest rate, you are paying roughly $12.50 per month in interest alone.
Key Takeaways
- A cash advance lets you withdraw money from your credit card at an ATM, bank, or store, but charges a fee of 3 to 5 percent plus a higher interest rate than regular purchases.
- Interest on a cash advance begins accruing when ready with no grace period, making it one of the most expensive ways to borrow money on a credit card.
- The three main ways to get cash from a credit card are ATM withdrawal, bank teller withdrawal, and over-the-counter cash back at a store.
- You can only withdraw up to your card's cash advance limit, which is usually lower than your total credit limit and is set by your card issuer.
- If you need money urgently, a personal loan or a cash advance from your employer are usually cheaper alternatives than a credit card cash advance.
The three ways to withdraw cash from a credit card
ATM withdrawal is the most common method. You insert your credit card into an ATM (just as you would a debit card), enter your PIN, and select the cash advance option. The ATM will show you your available cash advance limit and let you choose how much to withdraw. The fee appears on your statement later, usually labeled as a "cash advance fee" or "ATM fee."
Bank teller withdrawal works if you visit a bank branch in person. You hand your credit card to the teller and ask for a cash advance. They process it the same way an ATM would, but you get the cash directly from them. Some banks charge an additional fee for this service on top of your card issuer's fee.
Store cash back is available at many retailers. When you make a purchase, you can ask the cashier for cash back and charge the total (purchase plus cash) to your credit card. However, this is usually treated as a regular purchase, not a cash advance, so it may not trigger the higher interest rate — but check your card's terms to be sure, because some issuers do charge cash advance rates even for store cash back.
Your cash advance limit is separate from your credit limit
Your credit card issuer sets a cash advance limit that is usually much lower than your total credit limit. If your credit limit is $5,000, your cash advance limit might be only $1,000 or $1,500. This limit is set by the card company based on your credit history and account activity, and you cannot change it yourself.
You can find your cash advance limit by logging into your online account, calling the customer service number on the back of your card, or checking your most recent statement. If you try to withdraw more than your limit, the ATM or teller will decline the transaction.
Why cash advances are one of the most expensive credit card moves
A typical credit card purchase might have an interest rate of 18 to 22 percent. A cash advance on the same card might be 23 to 29 percent. That difference compounds quickly, especially because there is no grace period. On a regular purchase, you have roughly 21 days before interest starts accruing. On a cash advance, interest starts the day you withdraw the money.
Add the upfront fee — 3 to 5 percent — and you are paying roughly $30 to $50 just to borrow $1,000 for a month. If you carry that balance for three months, you could pay $100 or more in fees and interest combined. For comparison, a personal loan from a bank or credit union typically charges 6 to 36 percent interest with no upfront fee, and a payday loan (which is also expensive) usually costs less than a credit card cash advance over a short period.
Cheaper ways to get cash if you need it urgently
If you need money quickly, explore these options before using a cash advance. A personal loan from a bank, credit union, or online lender usually has a lower interest rate and no upfront fee. The approval process can take a few days to a week, but the monthly cost is almost always lower than a cash advance.
If your employer offers paycheck advances or emergency loans, those are often free or very cheap. Some employers will advance you a portion of your next paycheck with no fee at all. A credit union loan (if you are a member) is usually faster and cheaper than a bank loan, with rates as low as 6 to 18 percent and sometimes no process fee.
If you have a friend or family member who can lend you money, that is almost always the cheapest option. If you do borrow from someone you know, put the terms in writing — even a straightforward text message saying "I will pay you back $500 by [date]" — to avoid misunderstandings later.
How a cash advance appears on your statement and credit report
When you take a cash advance, it shows up on your credit card statement as a separate line item from your regular purchases. The fee and the cash amount are listed separately. The cash advance balance accrues interest at the higher rate, while any regular purchases on the same card accrue interest at the lower rate (if you are carrying a balance).
A cash advance does not directly hurt your credit score, but it does increase your credit utilization — the percentage of your available credit that you are using. If your credit limit is $5,000 and you take a $1,000 cash advance, your utilization jumps to 20 percent. High utilization can lower your credit score slightly. The cash advance also shows up in your credit history, which lenders can see, though it does not carry a special flag or warning.
What happens if you cannot pay back a cash advance
If you do not pay back a cash advance, it works like any other credit card debt. Interest keeps accruing, your balance grows, and if you miss payments, your credit score drops and the card issuer may increase your interest rate or close your account. After 180 days of missed payments, the debt may be sent to a collection agency.
If you are struggling to pay back a cash advance, contact your card issuer as soon as possible. Some companies offer hardship programs that lower your interest rate or let you pay in installments. You can also reach out to a nonprofit credit counselor (through the National Foundation for Credit Counseling) who can help you negotiate with your card issuer or create a repayment plan.
Frequently Asked Questions
Can I transfer money from a credit card to my bank account without a cash advance?
Not directly through your credit card company. However, you can use a balance transfer check if your card issuer offers them — these are checks drawn on your credit card account that you can deposit into your bank account. Balance transfer checks usually have the same fees and interest rates as cash advances, so they are not cheaper. A better option is a personal loan or a transfer service like PayPal or Venmo if you are moving money between people.
Do I have to use my PIN to get a cash advance?
Yes, at an ATM you will need your PIN. At a bank teller, you may be asked for your PIN or your ID. At a store, you typically do not need a PIN for cash back — you just sign the receipt. If you do not know your credit card PIN, call the number on the back of your card to set one up or reset it.
Will a cash advance hurt my credit score?
A single cash advance will not directly damage your score, but it increases your credit utilization ratio, which can lower your score by a few points. If you carry the balance and miss payments, your score will drop more significantly. Paying off the cash advance quickly minimizes the impact.
Can I get a cash advance from a credit card I just opened?
Usually yes, but your cash advance limit may be very low or zero if your account is brand new. Some card issuers do not allow cash advances for the first 30 to 90 days. Check your account online or call customer service to see if your card has a cash advance limit set up.
What is the difference between a cash advance and a balance transfer?
A cash advance gives you physical cash and charges a higher interest rate when ready. A balance transfer moves debt from one card to another and usually offers a lower introductory interest rate (sometimes 0 percent) for a set period. Balance transfers are for moving existing debt; cash advances are for getting cash in hand.