How to get cash from your credit card

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Withdrawing money from your checking account isn’t the only way to get cash. Many credit cards offer cash advances, where you can withdraw money from an ATM. However, this convenience comes at a cost.

Knowing how to get a credit card advance is key, as you may be hit with fees and other consequences that could put your finances at risk. You may also want to consider alternatives to a credit card cash advance, just in case. 

How do credit card cash advances work?

Credit card issuers offer cash advances as a feature for those who want to withdraw cash. It’s similar to withdrawing cash using your bank’s debit card, except you’re borrowing it. You’ll have a credit card PIN, which you can use at the ATM.

Some card companies also offer convenience checks. These are blank checks that you can write for any amount up to your cash advance limit and deposit into your account. Then, you can use your bank account to withdraw cash as needed.

Cash advances differ from regular credit card purchases as they’re treated as separate types of transactions. The biggest differences are the fees and interest you pay and the fact that cash advances have a separate credit limit. Your cash advance limit is typically lower than your overall credit limit and doesn’t affect your available credit for regular purchases.

Cash advance limits

Cash advance limits are generally much lower than those for regular credit card purchases. You will have two credit limits for each type of transaction.

For example, you could have a $6,000 purchase limit and a $500 cash advance limit. Credit card issuers may use your creditworthiness to determine how much your cash advance limit may be.

Cash advance fees

“The biggest risk of using credit card advances are fees and interest rates,” says Forrest Baumhover, a certified financial planner. “These fees can compound the amounts the cardholder will need to repay.”

There are different cash advance fees you may face, including:

• Transaction fees: Depending on your credit card’s terms, you could pay a flat fee or a percentage of the withdrawal amount each time you make a cash advance. Typically, these fees range from 3% to 5% of the transaction amount, with a minimum fee of $5 to $10. For example, a $350 cash advance with a 5% fee would cost $17.50.
• Interest charges: A cash advance's annual percentage rate (APR) tends to be higher than for regular purchases, often ranging from 20% to 30%. You also won’t have a grace period like you would for credit card purchases. That means you'll need to start paying interest when you withdraw cash using your credit card.
• ATM fees: If you get a cash advance at an ATM, the bank where you get it may charge you out-of-network fees in addition to the fees charged by your credit card issuer.

Overall, fees for credit card advances are higher than ones for purchases.

If you need to take out a cash advance, however, there may be ways to minimize your costs. In addition to looking at alternatives to access cash, Lawrence D. Sprung, a certified financial planner, suggests comparing your credit cards and determining how much you really need to take out.

“Check to see if your credit cards have any good promotions, or pick the one with the lowest fees,” he says. “Don’t borrow more than you need and pay back the cash advance as soon as possible to lower the amount of interest you pay.”

How to take out a cash advance

Depending on your credit card issuer, you can take out a cash advance in several ways. How you would get cash will depend on the method you use:

• ATM: Insert your credit card like you would a debit card and enter your PIN. Then, indicate the amount you want to withdraw and agree to any third-party fees you may need to pay.
• Convenience checks: If your credit card company sends you these blank checks, you can fill one out, deposit it at your bank, or cash it. The information you’ll need to fill out is the amount you want, the payee (yourself), and your signature. You may need to provide your ID to cash the check.
• At the bank or credit union: Some financial institutions allow you to visit their branches in person to get a cash advance. You may need your ID to complete the transaction.

To help make your transaction as smooth as possible, have all the required information handy, such as your PIN and a government-issued ID.

Pros and cons of using a cash advance

Pros

• Convenient access to cash: You can withdraw money whenever you need it, as long as it’s within your cash advance limit. Cardholders can even choose different ways to access cash, from ATMs to convenience checks.
• No need to apply for a loan: Since you already have your credit card, you won’t need to wait to get funding like you would when applying for a personal loan or line of credit.

Cons

• Higher interest rates: The APR you’ll need to pay for a cash advance is typically higher than credit card purchases. Plus, you’ll most likely have to pay interest immediately, whereas purchases often have a grace period to pay off the balance and avoid interest charges.
• Higher fees: Besides paying interest, you may need to pay out-of-network ATM fees if you withdraw cash at a bank’s machine and transaction fees from your credit card issuer.
• Effects on your credit score: Your credit utilization, or the percentage of your credit limit you’re using, is a significant factor in calculating your credit score. Taking out a cash advance can increase your credit utilization, which can negatively impact your score. Additionally, if you struggle to repay the advance quickly, it may lead to missed payments or increased debt, further damaging your credit history.

Alternatives to cash advances

Cash advances aren’t the only way to get cash in a pinch. Consider some of these alternatives, especially if you want to try to save in fees or borrow a larger amount of money:

• Personal loans: Applying for a personal loan may get you more funding for almost any purpose, like making home repairs or consolidating debt. Interest rates may be lower, and in many cases, you may find a lender that does not charge application or origination fees. You can shop around lenders for the best rates and terms for your needs.
• Overdraft protection: Many banks cover transactions if you don’t have enough in your account, though you’ll need to pay overdraft fees. Some may also link your savings account, so if you don’t have enough in your checking account, the bank will transfer funds over from savings. You can also opt into opening a line of credit so that any overdrafts will be taken care of — you’ll pay back what you owe with interest.
• Borrowing from family and friends: If you’re in a pinch, consider asking trusted friends and family members to help you out. Be sure to discuss why you need money and how you plan to repay it. To help reassure them, you can consider signing a written agreement about the amount borrowed and payment terms.
• Using your emergency fund: Life happens, and you may need money because of unexpected circumstances like emergency dental surgery. Consider using that first if you have enough money in an emergency fund. That way, you can avoid interest and fees.

Tips for using cash advances responsibly

If you decide a cash advance is your better option, consider why it makes sense and how you can best afford the fees.

“A cash advance can make sense when you are in a pinch and need funds quickly, and you can pay them back quickly, too,” Sprung says. “In some cases, you may be able to use it as a bridge until you find traditional financing elsewhere since the cost associated with this type of borrowing does not make it ideal for a longer-term borrowing solution.”

If you find yourself needing a cash advance, keep these tips in mind:

• ​​Only use cash advances for true emergencies
• Borrow the minimum amount needed
• Plan to repay the advance as quickly as possible
• Consider the total cost, including fees and interest
• Avoid using cash advances for regular expenses
• Review your budget to prevent future cash shortages

Frequently asked questions

The bottom line

While credit card cash advances can provide quick access to cash, they come with significant costs and risks. Before opting for a cash advance, consider the fees, interest rates, and potential impact on your credit score. 

Whenever possible, explore alternatives such as using your emergency fund, personal loans, or borrowing from family and friends. If you must use a cash advance, borrow only what you need and plan to repay it as quickly as possible to minimize the financial impact. 

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.