Withdrawing Cash Using Your Credit Card: Is It Possible?

Quick answer

• Yes, you can withdraw cash from your credit card, but it’s often called a “cash advance” and comes with significant drawbacks.
• Cash advances typically have higher interest rates than regular purchases, and interest usually starts accruing immediately.
• You’ll likely face an upfront cash advance fee, often a percentage of the amount withdrawn.
• There might be a separate, higher APR for cash advances compared to your standard purchase APR.
• ATM withdrawal limits may apply, and not all credit cards allow cash advances.
• It’s generally advisable to avoid cash advances due to their high costs, unless it’s an absolute emergency.

Who this is for

• Individuals who need immediate access to cash and are considering using their credit card as a source.
• People who are curious about the mechanics and implications of credit card cash advances.
• Consumers looking for alternatives to traditional banking methods for obtaining physical currency.

What to check first (before you act)

Your Goal and Timeline

Before considering a cash advance, clearly define why you need the cash and when you need it by. Is this for a true emergency, or could another solution suffice? Understanding your urgency will help you weigh the costs of a cash advance against other options. For example, if you need cash for a non-urgent purchase, exploring personal loans or selling an item might be more cost-effective.

Current Cash Flow

Analyze your current income and expenses. Can you realistically afford to repay the cash advance quickly? High interest rates mean that the longer you take to repay, the more expensive it becomes. A thorough review of your budget will reveal if you have the capacity to absorb the added cost of a cash advance and its associated fees.

Emergency Fund or Safety Buffer

Do you have an emergency fund? Ideally, an emergency fund should cover 3-6 months of living expenses. If you have a robust emergency fund, using it for a true emergency is far more financially prudent than taking out a cash advance. This fund is specifically designed to prevent you from resorting to high-cost borrowing.

Debt and Interest Rates

Assess your existing debt. If you have high-interest debt, like credit card balances or payday loans, adding another high-cost debt like a cash advance will exacerbate your financial burden. Compare the interest rate of a potential cash advance with your current debts to understand the full impact.

Credit Impact

While a cash advance itself doesn’t directly lower your credit score in the way a missed payment would, it can indirectly affect it. Maxing out your credit card or significantly increasing your credit utilization ratio can negatively impact your score. Furthermore, if you struggle to repay the cash advance, it could lead to late payments, which severely damage your credit.

Step-by-step (how to withdraw money credit card)

Step 1: Check Your Credit Card Agreement

• What to do: Locate your credit card’s terms and conditions or log into your online account. Look for sections detailing “cash advances” or “cash equivalent transactions.”
• What “good” looks like: Your card agreement clearly states that cash advances are permitted, and it outlines the associated fees and interest rates.
• A common mistake and how to avoid it: Assuming all credit cards offer cash advances. Many secured cards or some student cards may not permit them. Always verify with your issuer.

Step 2: Find Your Cash Advance Limit

• What to do: Your credit card agreement or online account portal will show your specific cash advance limit, which is often lower than your overall credit limit.
• What “good” looks like: You know your exact cash advance limit, ensuring you don’t try to withdraw more than allowed.
• A common mistake and how to avoid it: Confusing your cash advance limit with your total credit limit. Attempting to withdraw beyond the cash advance limit will result in a declined transaction.

Step 3: Locate an ATM or Branch Offering Cash Advances

• What to do: Find an ATM that accepts your credit card network (Visa, Mastercard, etc.) or visit a bank branch that offers cash advances on your card.
• What “good” looks like: You’ve identified a reliable location where you can physically get the cash.
• A common mistake and how to avoid it: Going to an ATM that doesn’t accept your card type or has withdrawal limits that prevent you from getting the full amount needed.

Step 4: Insert Your Credit Card and Select “Cash Advance”

• What to do: Follow the ATM’s prompts. You’ll typically need to insert your card, enter your PIN (if you have one for cash advances), and select the “cash advance” option.
• What “good” looks like: The ATM interface clearly guides you through the cash advance process.
• A common mistake and how to avoid it: Accidentally selecting “purchase” instead of “cash advance.” This could result in a purchase transaction rather than a cash advance, potentially with different fee structures or no cash being dispensed.

Step 5: Enter the Desired Withdrawal Amount

• What to do: Input the amount of cash you wish to withdraw, ensuring it does not exceed your cash advance limit and the ATM’s withdrawal limit.
• What “good” looks like: You’ve entered an amount that you absolutely need and can afford to repay.
• A common mistake and how to avoid it: Withdrawing more cash than you truly need. This increases the fees and interest you’ll owe, making repayment harder.

Step 6: Confirm the Transaction and Fees

• What to do: The ATM may display a confirmation screen showing the amount withdrawn and any immediate ATM fees. Review this carefully.
• What “good” looks like: You understand any immediate ATM fees before finalizing the withdrawal.
• A common mistake and how to avoid it: Not paying attention to ATM-specific fees, which are separate from your credit card’s cash advance fee.

Step 7: Collect Your Cash and Card

• What to do: Take the dispensed cash and retrieve your credit card from the ATM. Keep your receipt.
• What “good” looks like: You have the physical cash and your card, and you have a record of the transaction.
• A common mistake and how to avoid it: Forgetting your card or cash. Always double-check the machine before walking away.

Step 8: Monitor Your Credit Card Statement

• What to do: Log in to your credit card account online or review your next statement. Look for the cash advance transaction, the cash advance fee, and the start of interest charges.
• What “good” looks like: The transaction appears as expected, and you can clearly see the cash advance amount, fees, and the applicable interest rate.
• A common mistake and how to avoid it: Ignoring the cash advance on your statement. This oversight can lead to unexpected interest charges accumulating and potentially missed payments.

Step 9: Plan for Repayment

• What to do: Immediately create a plan to pay back the cash advance, ideally before your next statement due date, to minimize interest.
• What “good” looks like: You have a clear strategy to pay off the entire cash advance amount as quickly as possible.
• A common mistake and how to avoid it: Treating the cash advance like a regular purchase that can be paid off over time. The high APR and immediate interest accrual make this a costly mistake.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Treating cash advance like a purchase	High interest accrual from day one, significant fees, and a ballooning balance.	Pay off the cash advance balance as quickly as possible, ideally in full, before interest compounds significantly.
Not checking cash advance fees	Unexpectedly high costs due to upfront percentage-based fees, often 3-5% of the withdrawn amount, plus potential ATM fees.	Always review your cardholder agreement or call your issuer to understand all cash advance fees <em>before</em> withdrawing.
Ignoring cash advance APR	Interest charges accumulate at a much higher rate than your standard purchase APR, making repayment much more expensive.	Be aware that cash advance APRs are typically higher and interest starts immediately. Prioritize paying it off to avoid prolonged interest charges.
Withdrawing more than needed	Increased fees and interest charges on the excess amount, making the debt harder to manage and repay.	Only withdraw the absolute minimum amount of cash you require for the immediate need.
Using cash advance for non-emergencies	Creates a cycle of debt, damages credit score due to high utilization, and incurs unnecessary costs that could be avoided with other solutions.	Explore all other options first, such as using savings, selling items, or seeking a low-interest loan, before considering a cash advance.
Not having a repayment plan	The debt grows rapidly due to interest, potentially leading to missed payments and further credit damage.	Immediately create a strict repayment plan to pay off the cash advance balance as soon as possible.
Relying on cash advances regularly	Leads to severe debt accumulation, extremely high interest payments, and potentially bankruptcy if not managed.	Build and maintain an emergency fund to cover unexpected expenses, thus eliminating the need for costly cash advances.
Not understanding ATM withdrawal limits	Inability to get the full amount of cash needed, requiring multiple transactions (and potentially multiple fees).	Check both your credit card’s cash advance limit and the ATM’s daily withdrawal limit before you go to the ATM.
Assuming cash advance PIN is same as debit	Incorrect PIN entry can lead to declined transactions or security locks on your card.	If you haven’t set a specific PIN for cash advances, check with your card issuer to see if one is required and how to obtain it.
Not checking for alternative cash sources	Missing out on cheaper or interest-free ways to access funds, leading to unnecessary expense.	Before resorting to a cash advance, research options like borrowing from friends/family, using a 0% intro APR card for a purchase (if applicable), or a personal loan.

Decision rules (simple if/then)

• If you need cash for a true, unavoidable emergency and have no other immediate options, then consider a cash advance, because it provides immediate liquidity.
• If you can wait even a few days for funds, then explore personal loans or lines of credit, because they often have lower interest rates and fees than cash advances.
• If you have an emergency fund, then use your emergency fund, because it’s designed for these situations and avoids costly borrowing.
• If your credit card has a high cash advance APR and significant fees, then avoid using it for a cash advance, because the cost will likely outweigh the benefit.
• If you can repay the cash advance within one billing cycle, then a cash advance might be a last resort option, because you can minimize interest charges.
• If your credit card offers a 0% introductory APR on purchases, then consider using it for a purchase if possible, because it’s generally cheaper than a cash advance, but note that cash advances rarely have 0% APR offers.
• If you are already carrying significant high-interest debt, then avoid taking a cash advance, because it will only add to your debt burden and increase your overall interest payments.
• If you need to withdraw a large sum of cash, then check your cash advance limit and ATM withdrawal limits, because you may not be able to get the full amount in one go.
• If you are unsure about the fees and APR, then call your credit card issuer before attempting a cash advance, because understanding the costs is crucial.
• If you can sell an item you own to get cash, then do that first, because it’s a direct way to get funds without incurring debt or interest.
• If you have a trusted friend or family member who can lend you money, then ask them, because this is often the cheapest and fastest way to get cash in an emergency.

FAQ

Can I use my credit card to get cash at any ATM?

Generally, you can use your credit card at ATMs that display the logo of your card network (e.g., Visa, Mastercard). However, some ATMs might have restrictions, and your credit card issuer may also limit where cash advances are allowed. Always check your card’s terms.

How much cash can I withdraw from my credit card?

Your credit card issuer sets a specific cash advance limit, which is usually lower than your overall credit limit. There may also be daily ATM withdrawal limits imposed by the ATM operator.

Does interest start immediately on a credit card cash advance?

Yes, typically interest begins to accrue on cash advances from the moment you withdraw the cash. Unlike regular purchases, there is usually no grace period for cash advances.

Are there fees for taking a cash advance?

Yes, most credit cards charge a cash advance fee, which is often a percentage of the amount withdrawn (e.g., 3-5%) or a flat fee, whichever is greater. ATMs may also charge their own transaction fees.

Is a cash advance the same as a balance transfer?

No, they are different. A balance transfer involves moving debt from one credit card to another, usually to get a lower interest rate. A cash advance is withdrawing physical cash using your credit card.

Can I get a cash advance from my debit card?

You can get cash from your debit card, but this is different from a credit card cash advance. When you use a debit card, you are withdrawing money directly from your checking account, not borrowing it.

What is the interest rate on a cash advance?

Cash advance interest rates (APRs) are typically higher than the APR for regular purchases. The exact rate varies by card issuer and your creditworthiness. Check your cardholder agreement for specifics.

Will taking a cash advance hurt my credit score?

While the act of taking a cash advance doesn’t directly lower your score, using a large portion of your cash advance limit can increase your credit utilization ratio, which can negatively impact your score. If you fail to repay it on time, it will definitely hurt your score.

What this page does NOT cover (and where to go next)

• Specific credit card offers or recommendations.
• Detailed analysis of the current economic climate and its impact on borrowing costs.
• Advice on specific debt consolidation strategies.
• Legal advice regarding debt collection or bankruptcy.

Where to go next:

• Researching alternative lending options like personal loans.
• Reviewing your credit report and score.
• Consulting with a non-profit credit counseling agency.
• Developing a comprehensive debt repayment plan.