Learn How Credit Card Cash Advances Work at ATMs

What Is a Credit Card Cash Advance?

A cash advance is a way to borrow money using your credit card. Instead of making a purchase at a store or online, you withdraw cash directly from an ATM or bank branch. The credit card company lends you the money, and you repay it later like any other credit card balance. This differs from a regular purchase because the money goes directly into your pocket rather than paying a merchant.

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When you take a cash advance, the transaction appears on your credit card statement just like a purchase would. However, cash advances are treated differently by credit card companies in several important ways. The interest rate on a cash advance is typically higher than the rate for regular purchases—often 3% to 5% higher. Additionally, most credit card companies charge a fee for cash advances, ranging from 3% to 5% of the amount withdrawn, with a minimum fee of $5 to $10.

Cash advances work through a straightforward process. You insert your credit card into an ATM, enter your PIN (personal identification number), and select the cash advance option. The machine dispenses cash, and the transaction is recorded immediately. Your credit card issuer then adds this amount to your credit card balance, which you must repay according to your card's terms.

Many people use cash advances for emergency situations—a car repair, medical bill, or urgent travel expense when they don't have cash on hand. Others use them to access funds when credit cards are more convenient than checking accounts. Regardless of the reason, understanding how cash advances work helps you make informed decisions about whether this borrowing method makes sense for your situation.

Takeaway: A cash advance lets you borrow money against your credit card limit and withdraw it as cash. The process is simple, but the costs are higher than regular credit card purchases due to interest rates and fees.

How to Access a Cash Advance at an ATM

Accessing a cash advance at an ATM involves a few straightforward steps. First, locate an ATM that accepts your credit card. Most major ATMs—whether operated by your bank or a network like Visa, Mastercard, or Cirrus—accept credit cards for cash advances, though some ATMs only work with debit cards. If you're unsure whether an ATM will work with your credit card, check your card's website or contact your card issuer beforehand.

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When you reach the ATM, insert your credit card into the card reader. The machine will display a menu with several options: withdrawal, balance inquiry, transfer funds, and other services. Look for an option labeled "cash advance," "credit card withdrawal," or "withdraw cash." This option distinguishes a cash advance from a debit card withdrawal. Select this option, and the ATM will ask you to enter your PIN—the same four-digit code you use for other transactions.

After entering your PIN, the ATM will show your available credit limit or the maximum amount you can withdraw. This maximum cash advance limit is often lower than your total credit limit. For example, if your credit card has a $5,000 limit, your cash advance limit might be only $1,500. Enter the amount of cash you want to withdraw. Most ATMs dispense money in $20 increments, though some offer $10 increments or other denominations.

Once you confirm the amount, the ATM will process the transaction. The machine will dispense your cash and print a receipt showing the amount withdrawn, any fees charged, the new balance on your card, and the transaction date and time. Keep this receipt to verify the transaction on your credit card statement later. The entire process typically takes less than two minutes.

You can also obtain a cash advance at a physical bank branch. Visit your credit card issuer's branch or another bank that issues your card brand (such as a Visa-issuing bank). Tell a teller you want a cash advance, and they will process the transaction for you. This method may offer slightly different fee structures than ATM withdrawals, so it's worth asking about fees when you visit.

Takeaway: To get a cash advance at an ATM, insert your credit card, select the cash advance option, enter your PIN, choose an amount, and collect your cash and receipt. The process is quick, but understanding your cash advance limit and fees ahead of time prevents surprises.

Understanding Fees and Interest Charges

Cash advances come with costs that can add up quickly if you don't understand them. The first cost is the cash advance fee, which most card issuers charge as a percentage of the amount you withdraw. As of 2024, typical cash advance fees range from 3% to 5%. If you withdraw $500, a 4% fee means you'll pay $20 just to access the cash. Some cards charge a flat fee instead—for example, $5 or $10 per cash advance—or they charge whichever is greater: the percentage or the flat fee. Always check your credit card terms document or call your card issuer to learn your specific fee structure.

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Beyond the initial fee, interest accrues on your cash advance balance. The interest rate for cash advances is almost always significantly higher than the rate for regular purchases. While a credit card's purchase APR (annual percentage rate) might be 18%, the cash advance APR could be 25% or higher. This difference is one of the biggest disadvantages of cash advances. Additionally, interest on cash advances typically starts accruing immediately—there is usually no interest-free grace period like there often is for regular purchases.

To illustrate the cost, consider this example: You withdraw $1,000 as a cash advance. Your card charges a 4% fee, so you pay $40 upfront. The cash advance APR is 24%. If you repay the $1,000 within 30 days, you'll pay approximately $20 in interest. If you take 90 days to repay, interest charges will be roughly $60. Over a year, you could pay $240 in interest alone. Combined with the $40 upfront fee, the total cost of that $1,000 cash advance could exceed $280 if you take a full year to repay it.

Credit card statements show cash advance balances separately from purchase balances. This separation matters because credit card companies typically apply your payments to the lowest-APR balance first—meaning purchases before cash advances. If you make a $200 payment toward a balance containing both purchases and a cash advance, that $200 might go entirely toward the lower-APR purchase, leaving your higher-APR cash advance untouched and continuing to accrue interest.

Some cards offer lower cash advance rates or fees during promotional periods, though this is less common than purchase promotions. It's worth reviewing your card's current terms periodically. Certain premium credit cards may offer zero cash advance fees or slightly lower rates, though these cards typically charge higher annual fees (often $95 to $550 per year). Calculating whether the savings justify the annual fee requires comparing your actual cash advance usage.

Takeaway: Cash advances typically charge 3% to 5% fees upfront plus daily interest at rates 5% to 10% higher than purchase rates, with no grace period. Understanding these costs helps you decide whether a cash advance is worth using for your situation.

Cash Advance Limits and How They Work

Your credit card has a credit limit—the maximum amount you can borrow. However, your cash advance limit is typically much lower than your overall credit limit. Cash advance limits represent the maximum amount you can withdraw as cash, and they're set by your card issuer based on your creditworthiness, income, payment history, and other factors. For example, if your credit card has a $10,000 limit, your cash advance limit might be $2,000 or $3,000. Some cards cap cash advances at 20% to 50% of your total credit limit.

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You can find your cash advance limit by checking your credit card statement, logging into your online account, calling your card issuer's customer service line, or visiting a bank branch. Most issuers display this information clearly in your account details. When you approach an ATM, the machine may show your available cash advance amount—the portion of your limit that you haven't used yet. If your limit is $2,000 and you've already withdrawn $800, your available cash advance amount is $1,200.

When you take a cash advance, it counts against your overall credit limit. Using the previous example, if you withdraw $800 from your $10,000 credit limit, that $800 reduces your available credit