How to Get a Cash Advance with a Credit Card
If you need cash quickly, using your credit card for a cash advance can be a tempting option.
In many cases, you can insert your card into an ATM and withdraw cash right away.
While it can be convenient, using your credit card like a debit card is an expensive way to access cash.
What is a credit card cash advance?
BACK TO TOPA credit card cash advance allows you to withdraw cash directly from an ATM. While it may feel similar to using debit, you’re accessing borrowed money rather than funds from your bank account. You’re essentially taking a short-term loan from your credit card provider.
Cash advances are most commonly associated with ATM withdrawals, but your cardholder agreement may also classify the following transactions as cash advances when you use your credit card:
Balance transfers, if your cardholder agreement treats them as cash advances or cash-like transactions.
Credit card cheques.
Wire transfers.
Buying lottery tickets.
Placing bets on gambling sites.
Purchasing casino gaming chips.
Buying cryptocurrency.
Generally speaking, if you can use your credit card for a transaction that can be converted into cash, it may be considered a cash advance. There’s also typically a limit on how much you can withdraw as a cash advance. That amount may differ from your regular credit limit.
How to get a cash advance with a credit card
BACK TO TOPTo get a cash advance, you’ll usually need your credit card, your PIN and access to an ATM that accepts your card network. Insert your card, choose the cash advance or credit card withdrawal option, enter the amount you want to withdraw and accept any fees shown on the screen.
Before withdrawing cash, check your online account, monthly statement or cardholder agreement to confirm your cash advance limit, cash advance interest rate and any fees that may apply. Your cash advance limit may be lower than your regular credit limit.
You may also be able to get a cash advance at a bank branch, through a credit card cheque or by completing another cash-like transaction your card issuer allows.
Cost of a credit card cash advance
BACK TO TOPGetting a cash advance can be quick, but it’s an expensive way to access money. There are multiple fees you may have to pay, including:
Interest. Cash advances typically have interest rates higher than the standard interest rate on your credit card. Interest is charged immediately. There’s no interest-free grace period as there is for regular purchases.
Cash advance fee. In addition to interest, you may be charged a fee every time you get a cash advance. How much you’ll pay varies by your credit card provider, but it typically ranges from $0 to $10. The fee might also be a percentage of what you withdraw, such as 1%.
ATM fee. When using an ATM to access cash, you may be charged a one-time fee. The amount varies by the provider, but it’s typically $2 to $5.
For example, if you withdraw $500 as a cash advance, you may pay a cash advance fee, an ATM fee and interest that starts accruing immediately. Even if you repay the amount within a month, the total cost could be noticeably higher than the amount you withdrew.
A cash advance could also affect your credit score if it increases your credit card balance and raises your credit utilization. The cash advance itself may not appear as a separate item on your credit report, but the added balance can still matter.
If you take out a cash advance, try to repay it as quickly as possible. Because interest usually starts accruing right away, waiting until your next statement due date can increase the cost.
Check how your card issuer applies payments, especially if you also have purchases, balance transfers or promotional-rate balances on the same card.
When a cash advance might make sense
BACK TO TOPA credit card cash advance may make sense in limited circumstances, especially when you need physical cash immediately and don’t have access to cheaper options.
They’re often instant. If you need cash immediately and don’t have a debit card, you can use a cash advance to access cash.
They’re cheaper than some other options. Compared to payday loans, a cash advance may have a lower interest rate.
These are limited situations where a cash advance may make sense. Even then, it should generally be reserved for an emergency when physical cash is required.
Alternatives to a cash advance
BACK TO TOPIf you’re not facing an immediate emergency, you should consider one of the following options:
Personal loan. Check with your financial institution to see if you qualify.
Line of credit. A line of credit operates somewhat like a loan, but you can access only the money you need rather than a lump sum.
Borrow money. If you want to avoid owing money (and interest) to a bank, see if any friends or family can lend you money. Then, once you’re able, pay them back as soon as possible so you don’t hurt the relationship.
Home equity line of credit. If you have equity in your home, you could get a HELOC. Since this is a secured loan, the interest rate may be lower than other borrowing options. That said, try not to treat your home like a piggy bank.
Chequing account overdraft. Some bank accounts allow you to go into overdraft, which lets you spend more money than you have in your account. There are fees for going into overdraft, but they may be lower than cash advance charges.
Sell investments. If you have any investments, you could consider selling them to improve your cash flow. There may be penalties involved for liquidating certain assets ahead of schedule, so you should see what it’ll cost you before making any withdrawals.
Although it may take longer to get cash through one of these methods, you could pay significantly less in fees and interest compared to a credit card cash advance.
A cash advance might provide short-term relief, but if you’re not able to quickly pay it back, the additional costs can put long-term pressure on your finances.
Frequently asked questions
Can I get a cash advance without a PIN?
You may need a PIN to get a cash advance from an ATM. Some issuers may allow other methods, such as going to a bank branch, but you should check with your credit card provider first.
How much cash can I withdraw from my credit card?
Your cash advance limit may be lower than your total credit limit. You can usually find it in your online account, monthly statement or cardholder agreement.
Do cash advances have a grace period?
Usually, no. Unlike regular purchases, cash advances typically start accruing interest immediately.
Is a credit card cash advance the same as using a debit card?
No. With debit, you’re using money from your bank account. With a cash advance, you’re borrowing money from your credit card issuer.
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