Table of Contents

How Cash Advances Work
What is the cost?
If it doesn't involve cash
When does it make sense?
The Bottom Line

Personal Finance Credit Cards

Can You Withdraw Money from the Credit Card?

Cash advances from credit cards offer quick access to money, but they are expensive.
By Rebecca Lake
Updated June 06, 2021
Review by Thomas J. Catalano

If you require cash in the event of an emergency or to pay for bills, you might be wondering if you can cash it out of your credit card. Some credit card companies permit you to withdraw funds from your card through an advance. While that can be convenient in times of need however, cash advances have some drawbacks to consider. When making use of cards with credit to access cash, make sure you take a look at the pros and cons.
Key Takeaways

Many credit card companies allow you to withdraw money from your credit card via an advance.
Based on the card, you may be able to withdraw cash by putting it in the bank account of the ATM card, or writing a convenience check.
Cash advances can be more expensive than balance transfers, purchases or purchases and the interest begins accruing immediately. They also typically have fees.

How Cash Advances from Credit Cards Work

Typically, credit cards are meant to be used for making purchases. For example, you can use your credit card when you check out in stores or type in your card number and expiration date when you purchase things online. When you purchase something, your available credit is reduced by the amount until you pay off your credit card invoice.

Cash advances on credit cards work differently. If your card allows for them (and not all cards do), you might have a limit on credit for purchases and a separate limit for cash advances which will usually be less than your purchase limit. If you make a cash advance you are borrowing against this credit limit.

Furthermore the cash advances start accruing interest immediately--unlike purchases, which typically allow a grace period of 20 to 30 days to pay off your bill prior to interest accruing.

There are many methods to get a cash advance, including:

A cash transfer request from the credit card you use to transfer money into your account at
Withdrawing cash at an ATM
Making a convenience check for yourself, and then cashing it at a bank

You should be able find the cash advance limit you have by looking through your most recent credit card statement. If you aren't able to find it, contact your credit card company to ask whether cash advances are a possibility on your card, and in the event that they are, what your limit is.
What is the cost to Withdraw Cash From a Credit Card?

Cash advances aren't cheap. There are several charges to be aware of when you take one.

There's first the cash advance charge. It's a cost that which the company that issues credit cards charges for the convenience of withdrawing cash against the limit of your cash advance. It could be an unrestricted cost, like $5-10, or a percentage of the advance of amount, whichever is the greater. The amount could differ depending on the card.

There is also the possibility of paying additional fees if you're withdrawing cash from a credit or debit card at an ATM or branch of a bank. There is an ATM surcharge could be charged, or you might have pay a teller charge for this convenience.

The second component of the cost of cash advance is the annual percentage rate (APR). In the majority of cases the cash advance APR is higher than the standard APR for balance transfers or purchases. In addition, as we mentioned earlier, interest starts accruing immediately.

This is something to keep in mind when looking for a low-cost way to get cash. Compared to a short-term personal loan like a cash advance an advance in cash, it could end up carrying a much higher interest rate.

As with purchases, there's no grace period for credit card cash advances. Interest begins accumulating right away.
When Cash Advances Don't Involve Cash

In certain instances transactions, they can be regarded as a cash advance even when you're not withdrawing cash. For example, if you connect your credit card with an account at a bank for overdraft protection , any funds used to cover overdrafts would be considered to be a cash advance. You may also find specific transactions for instance, using your card to purchase cryptocurrency, are regarded as cash advances and not as purchases.

It's beneficial to review your credit card's terms and conditions carefully so you are aware of what is and isn't a cash advance.

When you make a payment through your credit card bill, the minimum balance due will be added to your regular purchase balance first. Any additional payments are applied to the balance that has the highest rate of interest next. If you already have a purchase balance on your credit card, you may have to pay the balance in full before any payments are transferred to the cash advance.1
When is it a good idea to Withdraw Cash From a Credit Card?

The option of withdrawing money from your credit card may appear to be a viable option if you're in a bind financially. For example, if your car is broken down and you have to pay for a tow truck business that does not accept credit cards, it may be your only choice.

If the issue isn't urgent, you could want to research alternative options to obtain cash as a credit card advance is costly. For instance, you might consider:

The application process for an unsecure personal loan
borrowing money from family or friends
Taking out a home equity loan
Withdrawing money from an IRA or taking a 401(k) withdrawal, or taking out a loan
Liquidating CDs or selling other assets in order to raise money

All of them have pros and cons, much as a cash advance. Tapping retirement accounts, for example is a simple option to earn money but it could also result in tax penalties. If it does, you're still shrinking the retirement savings. Home equity loans can offer low-interest rates, but you're putting your home on the line as collateral. The borrowing of money from family and friends could put money in your hands in a non-interest way, but it could be a cause for relationship issues when you don't repay the loan in the manner agreed upon.
Note

Taking out a 401(k) loan essentially means borrowing money from yourself. However, keep in mind that if you decide to quit your job due to reasons other than the loan is repaid and you're required to repay it in full almost immediately or it will be treated as a taxable distribution.
The Bottom Line

Cash advances on credit cards offer certain advantages, however they can be expensive when as compared to other options to borrow money. If you need funds but it's not an emergency, take some time to investigate other options before committing to a credit card cash advance. If you do decide to withdraw cash from your account make sure you pay off the balance as fast as you can in order to limit the cost of interest.
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