Updated: December 5, 2024
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If you need money in a hurry and don’t have time to apply for a loan, you may consider using your credit card to get a cash advance. Cash advances tend to come with high interest rates and fees, making them viable only as short-term solutions. While you may get a cash advance by using an ATM, you may also get one by visiting your card provider's branch. The maximum you may borrow through a cash advance is typically a fraction of your credit card’s total available credit limit.
Cash advances accrue interest right away and tend to come with high interest rates.
You will need to pay a cash advance fee and, possibly, an ATM fee as well.
Get a cash advance only if you know you can repay the entire amount quickly.
A cash advance refers to withdrawing money from your credit card account. However, the cash advance limit is not the same as your card’s overall credit limit. Most card providers set cash advance limits as percentages of a card’s total credit limit, typically varying from 30% to 50%. Some card providers, on the other hand, set fixed dollar amount limits. You may check this limit by viewing your credit card’s agreement or statement.
Once you get a cash advance, the borrowed money starts accruing interest from the date of the transaction. While you need to pay a cash advance fee, you might also need to pay an additional ATM fee. Cash advance APRs are typically higher than APRs that apply on purchases.
Getting a cash advance is typically not a good idea. Given the high interest rates that come with cash advances, they’re best used to meet short-term requirements. You may consider getting a cash advance if:
Depending on the credit card you have and its issuer, you can choose to get a cash advance in different ways. For instance, while heading to the nearest ATM is usually an option, you may get one by visiting your card provider’s branch as well.
If your credit card comes with a PIN, you may withdraw cash by visiting an ATM that supports your card’s network (Visa, Mastercard or Amex). While your credit card comes with a cash advance limit, you also need to account for any per-day limit that an ATM might have. If your card does not have a PIN, you may contact its issuer and request one. In some cases, you might receive your PIN via email or text message almost immediately. When sent by mail, it may take up to 10 business days to get to you.
You have the option of going to any of your card provider’s physical locations and requesting a cash advance. In this case, you’ll need to present your credit card as well as an acceptable form of identification. When you get a cash advance in person, you might need to pay an additional fee and/or a higher interest rate.
Some credit card providers let their customers get cash advances through their websites or apps. In such a scenario, you get the ability to transfer the money you need directly to your bank account.
A few credit card companies give their customers convenience checks that they may use for practically any legitimate reason. When you use a convenience check, it counts as a cash advance.
There are a number of transactions that might seem like regular purchases but count as cash advances instead. As a result, you need to know which transactions might make it to this bracket and attract high interest charges and fees.
To minimize the chance that you'll incur a cash advance fee by accident, contact your card issuer to request that they lower your cash advance limit to $0. This will eliminate any unexpected charges and interest on your purchases. -- Lee Huffman, credit card expert at BaldThoughts.com.
A cash advance can end up costing you a fair bit — all the more so if you take time to repay the money you borrow. While you need to pay interest charges, there are different fees to account for as well.
The interest rate that applies on cash advances is typically higher than that which applies to purchases. For example, while the U.S. Bank Visa® Platinum Card comes with a purchase APR of 14.49% to 24.49%, depending on your creditworthiness, its cash advance APR is 25.99%. In addition, while purchases come with grace periods, interest charges on cash advances start adding up from the day of the transaction.
Your card provider charges cash advance fees each time you use your card to access money from its account. This can be a flat fee or a percentage of the amount you borrow. It can also be the greater of the two. For example, the Capital One SavorOne Cash Rewards Credit Card charges $10 or 3% of the amount of each cash advance, whichever is greater.
You might also need to pay an additional ATM fee that is charged by the ATM owner. This could be a bank, a credit union or an independent ATM owner.
Depending on the card you have, you might have to pay different interest rates and fees based on how you choose to get a cash advance. For example, if you use the Bank of America® Unlimited Cash Rewards credit card to get a direct deposit or a check cash advance, the APR that applies is 16.99% to 26.99%, based on your creditworthiness at the time of account opening. If you get a bank cash advance, an APR of 28.99% will apply.
Further, the cash advance fee for a direct deposit or a check cash advance is $10 or 3% of the amount of each transaction, whichever is greater. However, over-the-counter, ATM, cash equivalent and same-day online cash advances charge $10 or 5% of the amount of each transaction, whichever is greater.
Action | Amount |
|---|---|
Total Cash advance withdrawal | $500 |
Cash advance fee (X%) | 3.00% |
Cash advance APR (X%) | 25.90% |
ATM fee | $3.00 |
Total interest and fees | $78.00 |
Estimated Payoff Timeframe | 12 months |
Given the high interest charges on cash advances, while getting one might seem suitable at the time, it can add to your debt rather quickly. As a result, you might consider meeting your requirement for money in other ways before thinking about getting a cash advance. In all of these scenarios, make sure you borrow only how much you can afford to repay comfortably and in a timely manner.
Going through answers to other commonly asked questions about how cash advances work will help you determine if getting one might work well for you.
You pay back a cash advance the same way you pay off other credit card debt. You can pay the entire amount in one go or keep making minimum monthly payments. If you choose the latter route, you'll end up paying a fair bit as interest charges.
The sooner you pay back a cash advance, the better. The longer you take, the more you'll end up paying in the form of interest charges.
Calculating the cost of a cash advance requires that you account for the cash advance APR, cash advance fees and ATM fees.
The limit on a cash advance is typically a percentage of a card's total credit limit, although some card providers have fixed dollar amount limits in place.
The longer you take to repay a cash advance, the worse it gets. This is because of the high APR that you need to pay.
Cash advance fees may apply in cases other than just actual cash advances. This is because card providers view a few other transactions as cash advances. Some of these include gambling-related transactions and buying foreign currency.
When you use the Bank of America Direct Deposit Cash Advance option, you may get any amount up to your total available credit, minus any applicable cash advance fees. When it comes to bank cash advances, you may access only a portion of your total credit limit.
Bank cash advances include ATM cash advances, same-day online cash advances, over the counter (OTC) cash advances, overdraft protection cash advances and applicable fees. Bank of America’s Direct Deposit Cash Advance, on the other hand, is when you use your credit card to deposit money into your personal checking account.
Yes, you may get more than one cash advance on a credit card, provided you don't exceed the card's cash advance limit.
If you take a cash advance before your credit card account's next billing date, you'll get to see it in your next monthly statement. If your account has been billed and your statement has been generated, the cash advance will show up on the following month's statement.
You cannot get a cash advance if you've already maxed out a credit card.
Paying a power bill or any other utility bill is not considered a cash advance. Some credit cards even offer higher rewards on payments made toward phone, internet and select online streaming services.
No, a cash advance limit is not dependent on credit card billing cycles. You may access funds up to a predetermined limit. As and when you keep making payments to bring the outstanding cash advance balance down, your available cash advance limit increases accordingly.
A cash advance on your credit card to pay bills is not considered income because you need to pay the borrowed money back. However, it might be considered income if the card provider cancels the debt.
Now that you know what a cash advance is and how it works, determine if getting one is a good idea or if you might benefit more by getting the money you seek from another source. If you wish to look for a credit card with a low APR or a 0% APR offer, pay attention to factors such as annual fees and rewards as well.
MoneyGeek experts regularly review spending trends based on data provided by the U.S. Bureau of Labor Statistics (BLS). They also monitor over 2,000 consumer and business cards combined, across parameters such as APRs, annual fees and offers so you may find a card to suit your needs easily.
The MoneyGeek editorial team stays on top of the latest financial trends and offers so it may create content and provide answers to questions that help our readers make well-informed decisions.
About Doug Milnes, CFA
Doug Milnes is a CFA charter holder with over 10 years of experience in corporate finance and the Head of Credit Cards at MoneyGeek. Formerly, he performed valuations for Duff and Phelps and financial planning and analysis for various companies. His analysis has been cited by U.S. News and World Report, The Hill, the Los Angeles Times, The New York Times and many other outlets.
Milnes holds a master’s degree in data science from Northwestern University. He geeks out on helping people feel on top of their credit card use, from managing debt to optimizing rewards.
