Need cash fast and your credit card has available credit? Taking a cash advance can seem like an easy solution. But it is one of the most expensive ways to borrow money. A cash advance usually comes with an upfront fee, a higher interest rate and no grace period, so interest starts accruing immediately. Some transactions count as cash advances even if you never touch an ATM. This guide explains what a cash advance fee is, how much it costs, what counts as a cash advance, how it appears on statements and better alternatives.
What is a cash advance?
A cash advance is when you use your credit card to get cash or cash-equivalent items, essentially borrowing cash against your credit limit. Common ways include:
- Withdrawing money from an ATM with your credit card
- Getting cash from a bank teller using your credit card
- Using convenience checks from your card issuer
- Buying cash-like items, which issuers may treat as cash advances
What is a cash advance fee?
A cash advance fee is a charge your card issuer adds each time you take a cash advance. It is usually the greater of a flat amount (often $10) or a percentage of the advance (often 3% to 5%).
The total cost of a cash advance
| Cost | Typical amount | |
|---|---|---|
| Cash advance fee | Often 3% to 5% of the amount, with a minimum such as $10 | |
| Cash advance APR | Often higher than the purchase APR | |
| Grace period | Usually none; interest starts the day you take the cash | |
| ATM fees | The ATM owner may charge a surcharge; see [[112 | ATM fees]] |
Example
| Item | Amount |
|---|---|
| Cash advance | $500 |
| 5% cash advance fee | $25 |
| Cash advance APR | 29.99% |
| Interest for one month (approx.) | About $12 |
| ATM surcharge | $3.50 |
| Approximate cost after one month | About $40 |
If you carry the balance longer, interest keeps growing.
What counts as a cash advance?
| Transaction | Often treated as cash advance? | |
|---|---|---|
| ATM withdrawal with a credit card | Yes | |
| Bank teller cash with a credit card | Yes | |
| Convenience checks | Yes | |
| Buying casino chips or gambling transactions | Often yes | |
| Buying lottery tickets | Often yes | |
| Buying money orders or traveler’s checks | Often yes | |
| Some person-to-person payment apps funded by credit card | Sometimes | |
| Buying cryptocurrency with a credit card | Often yes | |
| Wire transfers funded by credit card | Often yes | |
| Overdraft protection linked to a credit card | Often yes; see [[123 | overdraft protection transfers]] |
Each issuer has its own rules, so check your card agreement.
How cash advances appear on statements
You may see entries like:
- CASH ADVANCE
- CASH ADV FEE
- ATM CASH ADVANCE
- CASH-LIKE TRANSACTION
- QUASI-CASH
Your statement may also show a separate cash advance balance with its own APR. Learn to read these sections in how to read a credit card statement.
How payments are applied to cash advances
Under federal law, when you pay more than the minimum, the amount above the minimum generally must go to the balance with the highest APR first, which often includes cash advances. Still, it is best to pay off cash advances as quickly as possible, ideally in full.
Alternatives to a cash advance
- Use your debit card at an in-network ATM; see ATM fee rebates.
- Get cash back at a grocery store with your debit card.
- Ask for a small personal loan from a credit union, which often has lower rates.
- Use a 0% APR purchase card for purchases instead of getting cash.
- Request a paycheck advance from your employer, if offered.
- Borrow from savings or an emergency fund.
- Negotiate a payment plan with the company you need to pay.
- Explore local assistance programs for urgent needs like rent or utilities.
Avoid payday loans and other high-cost short-term loans, which can be even more expensive.
Does a cash advance hurt your credit score?
A cash advance itself is not reported as a separate negative event, but it increases your balance and credit utilization, which can lower your score. Missing payments would also hurt your credit.
Real examples
The ATM withdrawal. Jordan withdrew $200 from an ATM using his credit card while traveling. He paid a $10 fee, a $4 ATM fee and interest starting that day.
The money order. Lisa bought a money order with her credit card and was surprised to see a cash advance fee and higher interest.
The crypto purchase. Ravi bought cryptocurrency with his credit card. His issuer treated it as a cash advance.
Frequently asked questions
What is a cash advance fee?
It is a fee your credit card issuer charges when you use your card to get cash or cash-like items.
How much is a cash advance fee?
Often 3% to 5% of the amount, with a minimum such as $10.
Is there a grace period on cash advances?
Usually no. Interest starts immediately.
Can I avoid cash advance fees?
Use a debit card for cash, avoid cash-like transactions on credit cards and check your card terms.
Do cash advances have a limit?
Yes. Most cards have a lower cash advance limit than the overall credit limit.
Cash advance limits explained
Most credit cards have a separate cash advance limit, which is usually only a portion of your total credit limit. For example, a card with a $5,000 credit limit might allow cash advances of up to $1,000. Your statement and online account typically show both limits. ATMs may also limit how much you can withdraw per transaction or per day, regardless of your card’s cash advance limit. Using a large part of your cash advance limit can raise your overall utilization, which may affect your credit score.
Do you need a PIN for a credit card cash advance?
To withdraw cash from an ATM with a credit card, you usually need a credit card PIN, which is different from your debit card PIN. Many people never set one up. If you do not have a PIN, you can usually request one from your issuer online or by phone, though it may arrive by mail. At a bank teller, you can typically get a cash advance with your card and photo ID instead.
Some people deliberately choose not to set up a credit card PIN to reduce the temptation or risk of cash advances. If your card is lost or stolen, not having a PIN also makes it harder for someone to withdraw cash.
Cash advances while traveling
Travelers sometimes use credit cards at foreign ATMs when debit cards fail. This can stack several costs: the cash advance fee, the cash advance APR, a foreign transaction fee and the ATM operator’s fee. A better plan is to carry a debit card with low international fees, a backup debit card from a different bank and a small amount of local currency for emergencies; see foreign transaction fees.
How to pay off a cash advance quickly
- Pay as soon as possible, even before your statement arrives, because interest accrues daily.
- Pay more than the minimum, since the excess generally goes to the highest-APR balance first.
- Avoid new purchases on the same card until the cash advance is paid off, to keep things simple.
- Set reminders so you do not forget the higher-interest balance.
- Consider moving savings to pay it off if you have an emergency fund.
Cash advance vs personal loan vs payday loan
| Option | Typical cost | Speed | Notes |
|---|---|---|---|
| Credit card cash advance | Fee plus high APR, no grace period | Immediate | Expensive, but simpler than payday loans |
| Credit union personal loan | Lower APR for qualified borrowers | Days | Often the cheapest borrowing option |
| Payday alternative loans (PALs) | Capped rates at participating federal credit unions | Fast | Designed as a safer short-term option |
| Payday loan | Extremely high effective APR | Very fast | Can trap borrowers in repeated borrowing |
| Employer paycheck advance or earned wage access | Low to moderate fees | Fast | Depends on employer and provider terms |
If you need money for an emergency, compare these options carefully. A credit union loan or payday alternative loan can cost much less than a cash advance or payday loan.
Quick summary
A credit card cash advance lets you borrow cash against your credit limit, but it usually costs an upfront fee of 3% to 5%, a higher APR and immediate interest with no grace period. Many cash-like purchases, such as money orders, gambling and cryptocurrency, may also be treated as cash advances. Use a debit card, savings or a lower-cost loan when possible, and if you do take a cash advance, pay it off quickly to limit the cost.
Building even a small emergency fund is the best long-term way to avoid ever needing one.
The bottom line
A cash advance fee is charged when you use your credit card for cash or cash-like transactions, and it usually comes with a higher APR and no grace period. A small cash advance can cost much more than expected. Use debit cards, savings or lower-cost loans instead, and pay off any cash advance as quickly as possible. For related costs, see foreign transaction fees and payment pending on credit cards.
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