Getting Cash From Your Credit Card: How Cash Advances Work
What a cash advance is and how it differs from a regular purchase
A cash advance is when you use your credit card to withdraw cash from an ATM or bank teller, rather than using the card to buy something. The money comes from your credit limit, just like a purchase does — but the card company treats it very differently, and it costs you more.
The key difference: when you buy groceries with your credit card, you get a grace period (usually 21 days) before interest starts charging. With a cash advance, interest starts charging immediately — often the same day you withdraw the money. There is no grace period. You also pay an upfront fee, typically 3 to 5 percent of the amount you withdraw, on top of the interest.
Because of these extra costs, a cash advance should be a last resort, not a convenient way to get spending money. It is genuinely more expensive than using your debit card, taking out a personal loan, or borrowing from a friend.
Key Takeaways
- Cash advances charge interest immediately with no grace period, unlike regular credit card purchases which typically have 21 days before interest starts.
- You pay an upfront fee (usually 3 to 5 percent of the amount withdrawn) plus a higher interest rate than your regular purchase rate.
- You can get a cash advance at an ATM using your PIN, at a bank teller with your card and ID, or through a convenience check from your card issuer.
- The interest and fees start adding up fast, so pay back a cash advance as quickly as possible to avoid paying hundreds of dollars in extra charges.
Getting cash at an ATM with your credit card
The easiest way to get a cash advance is at an ATM. Insert your credit card (not your debit card), enter your PIN, and select "cash advance" or "withdrawal" — the exact wording depends on the ATM. You will see the amount you can withdraw, which is limited by your credit limit and your card's cash advance limit (often lower than your full credit limit).
Most credit cards set a cash advance limit that is 20 to 50 percent of your total credit limit. So if your credit limit is $5,000, your cash advance limit might be $1,000 or $2,500. Your card issuer sets this limit, and you can call them to ask what yours is before you go to the ATM.
The ATM will also charge you a fee on top of your card issuer's fee — usually $2 to $5 just to use the machine. So a $200 cash advance might cost you $10 to $15 in fees before any interest charges.
Getting cash from a bank teller
You can also walk into a bank branch and ask a teller for a cash advance on your credit card. Bring your card and a photo ID. The teller will process it the same way they would a debit card withdrawal, except they will run it as a credit card cash advance.
Bank tellers do not charge an extra fee for this service — you only pay your card issuer's cash advance fee and interest. This makes it slightly cheaper than an ATM, which charges its own fee on top. However, you have to go during business hours and wait in line, so it is less convenient.
Some banks will only do this if you have an account with them. Call ahead to check your bank's policy before you go.
Using convenience checks from your card issuer
Many credit card companies send you convenience checks — blank checks that draw from your credit line instead of a bank account. You write one like a regular check, and it counts as a cash advance.
Convenience checks work if you need to pay a person or business that does not take credit cards. You write the check, they deposit it, and the amount shows up on your credit card bill as a cash advance with all the same fees and interest.
The advantage is that you do not have to visit an ATM or bank. The disadvantage is that you still pay the cash advance fee and interest, and the check takes a few days to clear — so you do not get the money immediately.
Understanding the fees and interest charges
A cash advance costs more than a regular purchase in two ways. First, you pay an upfront cash advance fee, usually 3 to 5 percent of the amount you withdraw. On a $500 advance, that is $15 to $25 right away.
Second, the interest rate on cash advances is higher than your regular purchase rate. While a regular purchase might charge 18 percent annual interest, a cash advance might charge 22 to 25 percent. And unlike a purchase, this interest starts charging on day one — there is no grace period.
If you withdraw $500 and pay it back in one month, you might pay $10 to $15 in interest alone, plus the $15 to $25 upfront fee. That is $25 to $40 in costs for borrowing $500 for 30 days. A personal loan or payday loan might actually be cheaper, depending on the terms.
When a cash advance makes sense (and when it does not)
A cash advance is rarely the best option, but there are a few situations where it might be your only choice. If you need cash immediately and have no other way to get it — no debit card, no access to a personal loan, no friends or family who can help — then a cash advance is better than nothing.
It also makes sense if you can pay it back within a week or two. The longer you carry the balance, the more interest piles up. If you can pay back $500 in a week, the interest charge might be just $2 to $3. If you carry it for three months, you could pay $30 to $40 in interest alone.
A cash advance does not make sense if you are using it for everyday spending money, if you already carry a balance on your card, or if you do not have a clear plan to pay it back quickly. In those cases, use your debit card, ask for a personal loan, or look for other options first.
How to pay back a cash advance quickly
Once you take out a cash advance, the interest clock is ticking. Pay it back as fast as you can. When you make a payment to your credit card, the card company applies it to your lowest-interest debt first — usually regular purchases — and your cash advance last. This means your cash advance keeps charging interest even while you are making payments.
To pay down a cash advance faster, call your card issuer and ask if you can make a payment that goes directly toward the cash advance balance. Some issuers allow this; others do not. If they do not, you have to pay off all your regular purchases first before the cash advance balance starts shrinking.
This is another reason to avoid cash advances: the interest charges can trap you in a cycle of debt if you do not pay them back immediately.
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 around. You pay the cash advance fee and interest on the first card, then you are just moving that debt to the second card. You end up paying more in fees and interest with no actual benefit. If you are struggling to pay a credit card bill, contact the card issuer about a payment plan instead.
What happens if I do not pay back a cash advance?
The balance stays on your credit card and keeps charging interest. If you do not pay your minimum payment, your credit score drops and the card issuer may raise your interest rate or close your account. After several months of non-payment, the card company may send your debt to a collection agency.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Your card issuer sets a cash advance limit, which is often 20 to 50 percent of your credit limit. You can call your card issuer to find out your specific limit before you go to the ATM. Some ATMs also have daily withdrawal limits, so you might not be able to get all the cash you want in one day.
Do I need a PIN to get a cash advance?
At an ATM, yes — you need your credit card PIN to withdraw cash. If you do not have a PIN set up, call your card issuer to request one. At a bank teller, you do not need a PIN; you just show your ID and ask for a cash advance.
Can I get a cash advance if I have a zero balance on my card?
Yes. A cash advance draws from your available credit, just like a purchase does. As long as you have credit available, you can take out a cash advance, even if you have never carried a balance before.