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Can I Use a Credit Card at an ATM? How Cash Advances Work

Updated Sep 09, 2021 | Published Jul 29, 20209 min read

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At a glance

Cash advances let you withdraw money from an ATM using your credit card. But there’s a catch — they typically charge hefty fees and high interest rates, which means you should use them only if absolutely necessary.

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You may be asking yourself “Can I get cash out of the ATM with my credit card?”

Yes! Most credit cards will let you withdraw cash at an ATM. Great news, right?

No way!

Borrowing money on your credit card is a cash advance, a type of short-term loan, and it’s worlds away from a simple debit card cash withdrawal. Cash advances usually come with very high fees. Even worse, cash advances can signal to lenders that you’re being irresponsible with money during a credit check. It’s probably in your best interest to avoid using anything but your debit card with an ATM.

If you’re positive you need a cash advance right this instant, follow our step by step instructions. We also strongly recommend you understand exactly how a cash advance works, and why it’s a bad idea, both of which we’ll walk through in a moment.

If you think you’d like to avoid a cash advance, don’t worry — there are plenty of alternatives, like bank balance transfers, personal loans, and more.

What Is a Cash Advance?

A cash advance is a short-term loan that involves using your credit card to withdraw cash.

You can get a cash advance at most ATMs, or at a financial institution.

Cash advances are treated differently than the typical credit card transaction. Most charge up-front fees that are a percentage of the total cash requested, with a minimum fee if your withdrawal is small enough.

Cash advances also tend to have much higher interest rates than normal purchases, and they don’t usually have grace periods, so you start to incur interest charges right off the bat.

Naturally, there’s a limit to how much money you can withdraw with a cash advance. You should be able to find it in your card’s terms alongside other credit limit details.

Reasons Why Cash Advances Are a Bad Idea

  • High transaction fees on the cash advance: You’ll usually have to pay a fee based on the amount of the cash you borrow. The terms on your credit card agreement usually say something like “Either $10 or 5% of the amount of each cash advance, whichever is greater.” That means you’ll be charged a flat rate of $10 when you borrow up to $200, or 5% of the amount you borrow if it’s over $200.
  • No grace period: When you make a purchase on most credit cards, the credit card company won’t start charging interest right away. A credit card cash advance is different. When you borrow cash from your credit card company, they start charging you interest immediately, so the finance charges add up quickly. Learn more about credit card grace periods here.
  • High interest rates: Though not nearly as high as certain alternatives, like payday loans, the APR (annual percentage rate) on cash advances is usually much higher than normal credit card purchases. Around 25% is not unusual. Remember, there’s no grace period. So you’ll start getting charged interest at this absurdly high rate immediately.
  • Bad sign for lenders: If your credit card company sees you’re using cash advances, you might get flagged as a risky borrower by their risk models. That’s because they know people use cash advances when they’re desperate. If they see you as risky, you might not be able to get higher lines of credit or good terms with that bank in the future. They might even apply a higher interest rate to your balance going forward, or close your account.
  • Reduced credit utilization: Your cash advance balance adds to your credit card debt. This debt shows up on your credit reports. Generally, the higher your credit card debt is compared to your total available credit, the lower your credit scores will be. If you already have high balances on your credit cards compared to your credit limits, then cash advances can have a big negative impact on your credit scores.

Will My Credit Card Work in an ATM?

Nearly every credit card allows you to borrow cash with cash advances, however it is probably not a good idea. After all, fees and high interest rates are a great way for issuers to make money, as you can see in this example.

Check the cardholder agreement that came with your card to make sure. If you see a Cash Advance APR and Cash Advances Fee, then you can probably get a cash advance with that card. It might look something like this:

terms and fees for cash advances

Check your credit card statement. If you see a cash advance credit line or cash advance credit limit, that’s the maximum amount of cash you can take out. It’s important to know what this is so you don’t try to withdraw too much. The credit limit for cash advances is usually smaller than your card’s credit limit for regular purchases.

credit line for cash advances

If you don’t have your credit card terms or a statement handy, you can call the phone number on the back of your card to ask if your account allows cash advances and the limit of your cash advance line of credit.

Otherwise, provided you have enough available credit, the only thing that would prevent you from being able to access a cash advance on the fly is if you didn’t know your credit card PIN.

You may have received a PIN when you initially received your new credit card in the mail, or you may have had the option to create your own custom PIN online or by phone.

If your credit card features chip-and-PIN functionality (chip-and-PIN cards aren’t universal in the United States, but are very common in Europe), you might be able to use the same PIN you’d use for purchases, though the cash advance PIN could be different. Contact the issuer to learn more.

If you’re totally uncertain about your PIN situation, there’s no need to worry. Depending on the card issuer, you may be able to log in to your issuer’s online account portal or mobile app to create a PIN, request a new PIN, or view/request your current PIN. Just take note that immediate access to your PIN may not be possible for security reasons.

Alternatively, you can always call the customer support phone number on the back of your credit card for assistance.

Don’t want to put the effort into getting your PIN? You may be able to get a cash advance by visiting a brick-and-mortar bank associated with your credit card issuer (though the availability of this service depends on the issuer). You’ll have to show the teller your card and a valid, government-issued ID.

Insider tip

Purchases of money orders are typically counted as cash advances because you’re purchasing a cash equivalent. That means you’ll be charged a fee and will start accruing interest immediately, so we don’t recommend buying money orders with credit cards. With that being said, some cards are better for that purpose than others; learn more in our post, Can You Buy a Money Order With a Credit Card?

How Do I Get Money From an ATM With a Credit Card?

You’re really still thinking of taking out a cash advance? We strongly recommend otherwise, and your future self will probably thank you if you don’t. But if you’ve made up your mind, we’ll walk you through each step of the process below.

  1. Think about other options: At the risk of sounding repetitive, cash advances aren’t a great idea. Other options include credit cards with 0% purchase APRs and low-APR personal loans.
  2. Check to make sure your card allows cash advances: Consult your card’s terms, check your online dashboard or a statement for your cash advance limit, or call the phone number on the back of your credit card to find out.
  3. Check your cash advance limit: Make sure you know how much cash you’re allowed to withdraw through a cash advance. You can usually see this on a statement, or you could call the phone number on the back of your card. There may also be a daily cash advance limit.
  4. Find or set your PIN: This may have come with your card when you received it in the mail. If not, you will probably have to request it from the credit card issuer by logging in to your credit card account online or calling the phone number on the back of your card. It might take 7–10 business days to get the PIN set up.
  5. Understand the terms and fees for cash advances on your card: Cash advances can be costly, so it’s best to know what you’re in for ahead of time.
  6. Think about your repayment plan: Figure out when you’ll pay back the cash advance, and do the math to figure out how much extra money you’ll be paying for the cash you’re getting.
  7. Get the cash advance: If you’ve decided to go through with it (don’t say we didn’t try to convince you otherwise!), find an ATM, insert your card, and enter your PIN when prompted. Rather than selecting “Checking” or “Savings” as you usually would with a cash advance, you should be able to pick another option, like “Cash Advance” or “Credit Card.” Remember that you might get charged a fee for using the ATM (on top of the balance transfer fee) if it’s in a different network than your financial institution.
  8. Pay back the cash advance as soon as you can: It will start accruing interest charges immediately, so if you don’t start making card payments right away the debt could snowball out of control.

Example Cash Advance Scenario

Let’s do the math for a hypothetical cash advance.

Here are the assumptions of this example:

  • you are doing the cash advance on the first day of your billing cycle
  • the Cash Advance APR of your card is 24.99% (this is a typical Cash Advance APR)
  • the Cash Advance Fee part of your cardholder agreement says “Either $10 or 5% of the amount of each cash advance, whichever is greater.”
  • you have a 30-day billing cycle
  • your credit card company compounds interest on cash advances daily

So, you withdraw $1,000 at an ATM with your card on the first day of your billing cycle.

Right away, you’ll get hit with that Cash Advance Fee. Since 5% of $1,000 is $50, and that’s greater than $10, you immediately owe $1050. You may also have to pay an ATM fee if the ATM isn’t in your bank’s network, adding a few bucks to the amount owed.

Insider tip

Speaking of ATM fees, here’s a helpful tip that can save you big bucks over time if you find yourself withdrawing cash on a regular basis: Charles Schwab has a special free checking account that refunds all ATM fees at the end of the month. It’s connected to a brokerage account, but you don’t have to use it. Once you’ve opened your account, you’ll get the Schwab Bank Visa® Platinum Debit Card to make fee-free withdrawals simple.

If you wait until the end of this billing cycle before paying any of it back, how much will you owe?

The APR is an annual interest rate. Since the APR is 24.99%, you can get the daily interest by dividing the APR by the number of days in the year: 0.2499/365 is .00068, so the daily interest rate is 0.068%.

This means for every day that passes, you will be charged an additional 0.068% of the total amount you owe on top of what you already owe.

That may sound like a low percentage, but by the end of your first billing cycle you would owe an extra $19.91 just in interest. When you add that to the cash advance fee and the amount you borrowed, you owe a total of $1,069.91 by the end of the month.

So, for that $1,000 of cash you withdrew, you end up paying an additional $69.91 in interest and fees after only one month. That’s almost 7 months of a Netflix subscription!

Cash Advance Alternatives

You’ve probably noticed that we don’t advocate for the cash advance. Sure, the service is useful if you’re really desperate, but there are enough other options that you’re probably better off looking elsewhere unless you’re dealing with an actual emergency (and you don’t already have an emergency fund).

We’ve collected a few alternatives below. Not every method will work in every situation, but you should be able to find something that meets your financial needs.

Use a Discover Card with Cash at Checkout

Certain Discover credit cards offer a feature called Cash at Checkout (sometimes referred to as “Cash Over”). It works a lot like a cash advance, except without the hefty upfront fee and ultra-high interest rates.

You can use Cash at Checkout whenever you’re cashing out at an eligible retailer. Discover caps Cash at Checkout withdrawals at $120 per 24 hours, but the store in question may have its own limit, so ask first.

Your withdrawal will be treated as a standard purchase, and interest will be applied accordingly. It’s a very safe option if you don’t need a ton of money, but the fact that you need an eligible Discover card is an obstacle.

Cards that offer Cash at Checkout include:

Discover it® Cash Back
  • Min. credit levelGood
  • Annual Fee$0
  • Purchase APRSee Terms
Discover it® chrome
  • Min. credit levelGood
  • Annual Fee$0
  • Purchase APRSee Terms
Discover it® Miles
  • Min. credit levelGood
  • Annual Fee$0
  • Purchase APRSee Terms

Conduct a Bank Balance Transfer With a 0% APR Card

Bank balance transfers are an option that’s easy to overlook.

Here’s the idea, ideally:

You apply and are approved for a credit card with a 0% balance transfer APR offer. Then, you request a balance transfer with the issuer.

Instead of simply transferring a balance from one card to the other, however, the issuer sends cash directly to your bank account and treats it as a balance transfer.

That amount becomes the card’s balance, and you pay it off at the balance transfer APR. A 0% APR offer makes that a pretty sweet deal, right?

You’ll have to wait for the transfer to the process, of course, and that could be a detriment if you need the money ASAP.

Get a Personal Loan

Personal loans charge interest, just like cash advances. The key difference is that even if your credit is average at best, you can probably still get a personal loan at a much lower interest rate than a cash advance.

You may have to pay an origination fee to take out a personal loan, but that’s not always the case. Look for loan options without this type of fee if you’re really trying to come out on top.

The main downside here is that a personal loan is considerably less accessible than an ATM cash advance, especially if you’re nowhere near a bank and need money immediately.

Insider tip

If handled responsibly, installment loans (including personal loans) can bolster your history of on-time payments and diversity of accounts. There’s no guarantee, but this could help your credit scores.

Borrow the Money

If there’s someone you trust, like a close family member, consider asking to borrow the cash you need. In spite of the initial discomfort you may feel, borrowing could save you a lot of money you’d otherwise have to shell out for fees and interest charges.

Use Your Checking Account

You can usually get money from your checking account even if there’s not actually enough money in the account to cover the withdrawal. This is called overdrawing.

You’ll have to pay overdraft fees, which tend to be very hefty, but at least you won’t have to pay interest.

If you can pay your cash advance back in full ASAP, then that could be more cost-effective. If not, overdrawing is one last resort that could save you a few bucks. But you should avoid it if you can.

You won’t be able to overdraw your bank account if you’ve signed up for overdraft protection.

Q&A Video: What Is the Cash Advance Credit Line?

Don’t just take my word for it. Here’s credit expert John Ulzheimer also telling you about why cash advances are a bad idea:

If you’re having trouble paying your bills, you may be able to buy some time by transferring a balance. Read our guide first to make sure you understand the risks of doing a balance transfer, and make sure you have a solid plan for paying off debt before you do it. Then, if you decide a balance transfer might be right for you, see our top picks, including cards from a variety of issuers and networks like Visa and Mastercard.

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Written by

John Ganotis

John is committed to helping people understand how credit works and use it to their advantage. Since 2007, when he first worked in the finance industry, he’s been building his credit knowledge. It’s his mission to communicate this knowledge clearly to everyone who’s willing to learn, constantly improving the guides and reviews on Credit Card Insider since 2012. He knows firsthand how easy it is to accumulate credit card debt, the challenge of paying it off completely, and the satisfaction of using credit to his advantage. John is devoted to making Credit Card Insider the best resource for those looking to understand credit and use credit cards as a powerful tool rather than fear them.

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