Using a Credit Card at an ATM: What Actually Happens

Yes, you can use a credit card at an ATM, but it works differently than using a debit card and costs you money

Most ATMs will accept a credit card, but when you do, you are not withdrawing money from a bank account. Instead, you are taking out a cash advance — a short-term loan from your credit card company. The machine charges you a fee right away, usually $3 to $5 per transaction. On top of that, your credit card company charges its own fee, typically 3 to 5 percent of the amount you withdraw. You also start paying interest on that cash immediately, often at a higher rate than your regular purchase APR, and that interest begins accruing the same day — there is no grace period like there is for regular purchases.

Because of these costs, using a credit card at an ATM should be a last resort, not a regular habit. A $100 cash advance could cost you $6 to $10 in fees alone, plus interest that compounds daily until you pay it back.

Key Takeaways

• A credit card cash advance at an ATM triggers an immediate fee from both the ATM operator and your credit card company, plus interest that starts accruing the same day.
• Interest rates on cash advances are typically higher than the rate on regular purchases, and there is no grace period before interest kicks in.
• Using a credit card at an ATM should only happen when you have no other way to get cash, because the total cost adds up quickly.
• Some credit cards offer lower cash advance fees or rates, so checking your card's terms before you need cash can help you make a better choice.
• A debit card, a bank withdrawal, or a cash-back purchase at a store are all cheaper ways to get cash than a credit card ATM withdrawal.

How the fees stack up when you use a credit card at an ATM

When you insert your credit card into an ATM, the machine first checks whether it will accept that card — most do, but some ATMs owned by small banks or credit unions may not. If it accepts it, the ATM operator (which could be your bank, another bank, or an independent ATM company) charges you a fee. This fee appears on your receipt and is added to your credit card balance immediately.

At the same time, your credit card company charges its own cash advance fee. This is a separate charge, also added to your balance. The fee is usually a flat amount ($3 to $5) or a percentage of the withdrawal (3 to 5 percent), whichever is higher. So a $100 withdrawal might cost you $5 from the ATM operator plus $5 from your card company — that is $10 in fees before interest even starts.

Then interest begins. Cash advance interest rates are almost always higher than your regular purchase rate. Where a regular purchase might carry 18 percent APR, a cash advance might be 22 or 25 percent. That interest is calculated daily and added to your balance, and you pay interest on the fees too.

Why cash advances have higher interest rates and no grace period

Credit card companies treat cash advances as riskier than regular purchases. When you buy something with your card, the merchant guarantees the transaction — if something goes wrong, the card company can dispute it. With a cash advance, there is no merchant, no may provide, and no paper trail. The card company is simply handing you money.

Because of that risk, cash advances skip the grace period that regular purchases get. With a regular purchase, you have roughly 21 to 25 days to pay your bill before interest starts. With a cash advance, interest starts the day you withdraw the money. This means even if you pay off the cash advance the moment your bill arrives, you will have paid interest for the entire period you held the cash.

The higher interest rate reflects the same logic: the card company is taking on more risk and wants to be compensated for it. This is why a $100 cash advance can easily cost you $15 to $20 by the time you pay it back a month later.

When you might have no choice but to use a credit card at an ATM

There are situations where a credit card ATM withdrawal is the only option available. If you are traveling in a country where your debit card does not work, or if your debit card is lost or frozen, a credit card cash advance might be your only way to get local currency or cash for an emergency.

If you find yourself in this position, withdraw only what you absolutely need and pay it back as soon as possible. Every day you carry a cash advance balance, interest is accumulating. If you can pay it back within a few days, the total cost might be $10 to $15. If you carry it for a month, the cost could be $30 or more on a small withdrawal.

Before you travel, check whether your credit card company offers a lower cash advance rate or waived fees for international withdrawals. Some cards marketed to travelers include these perks. Knowing this ahead of time means you can make a smarter choice if you need cash abroad.

Cheaper ways to get cash than a credit card ATM withdrawal

If you need cash and you have options, almost any other method is cheaper than a credit card ATM withdrawal. Using your debit card at an ATM owned by your bank is free. Using your debit card at an ATM owned by another bank usually costs $2 to $3, which is less than a credit card cash advance fee.

Asking for cash back at a store when you make a purchase costs nothing. Many grocery stores, pharmacies, and retailers will give you cash back up to a certain amount — often $20 to $100 — when you swipe your debit card. This is free and instant.

If you are at your bank's branch, you can withdraw cash directly from a teller at no cost. If you are traveling and need cash, some credit card companies offer balance transfer checks that you can deposit into a bank account, though these also carry fees and interest. The point is: before you use a credit card at an ATM, exhaust the free or cheaper options first.

What your credit card statement will show for a cash advance

When you check your credit card statement after a cash advance, you will see the withdrawal listed separately from your regular purchases. It will show the amount you withdrew, the cash advance fee, and possibly the interest that has already accrued. Some card companies show cash advances in a separate section of your statement.

The cash advance will also affect your credit utilization — the percentage of your available credit that you are using. If your credit limit is $1,000 and you take out a $100 cash advance, your utilization jumps to 10 percent. This can lower your credit score slightly, especially if you already have high utilization from regular purchases. The impact is temporary and goes away once you pay off the cash advance, but it is another reason to avoid this unless necessary.

When you pay your bill, make sure you understand how your payment is applied. Some card companies apply payments to regular purchases first and cash advances last, which means your cash advance keeps accruing interest longer. Check your card's terms or call customer service to confirm how your payment will be split.

Frequently Asked Questions

Can I use any credit card at any ATM?

Most ATMs accept major credit cards like Visa and Mastercard, but some smaller ATMs owned by specific banks or credit unions may not. The ATM will tell you immediately if it will not accept your card. International ATMs are more likely to reject US credit cards, though most major ones in tourist areas accept them.

Is the interest on a cash advance the same as my regular purchase rate?

No. Cash advance interest rates are almost always higher than your regular purchase APR — often 3 to 7 percentage points higher. Check your card's terms or call the number on the back of your card to find out your specific cash advance rate before you need it.

What happens if I do not pay back the cash advance right away?

Interest compounds daily on the unpaid balance. A $100 cash advance at 25 percent APR costs roughly $2 in interest per month if you carry it. The longer you hold it, the more you pay. Paying it back within a week or two keeps the total cost low.

Can I use a credit card to withdraw cash from my bank's teller window?

No. A teller will only withdraw cash from a bank account, not from a credit card. If you want cash from a credit card, you must use an ATM or ask about a balance transfer check, both of which carry fees and interest.

Does a cash advance hurt my credit score?

It can, temporarily. A cash advance increases your credit utilization, which can lower your score slightly. The impact is usually small and goes away once you pay off the balance. However, if you miss payments on the cash advance, that will hurt your score more significantly.