What moving money from a credit card actually means
Moving cash from a credit card to a bank account is not the same as making a purchase or a payment. You are borrowing against your credit limit and moving that borrowed money into your checking or savings account as if it were your own cash. The credit card company charges you a fee for this service — usually 3 to 5 percent of the amount transferred — and the money starts accruing interest when ready, often at a higher rate than your regular purchase APR.
There are three main ways to do this: a cash advance at an ATM or bank teller, a balance transfer check, or a peer-to-peer payment app that accepts credit cards. Each has different costs, speed, and restrictions. Understanding which one fits your situation requires knowing what each method costs you and how quickly you need the money.
Key Takeaways
- Cash advances charge an upfront fee of 3 to 5 percent plus interest that starts accruing the same day, with no grace period like purchases have.
- Balance transfer checks work like regular checks but pull from your credit card, and they carry the same fees and interest as cash advances.
- Peer-to-peer apps like Venmo and PayPal let you send money to your own bank account, but most charge a fee if you use a credit card instead of a debit card.
- The interest rate on transferred funds is typically higher than your purchase rate and begins when ready, making this an expensive way to borrow.
- Your credit card company sets a cash advance limit that may be lower than your total credit limit, so you cannot always transfer your full available balance.
Cash advances at ATMs and bank tellers
A cash advance is the most direct method: you use your credit card at an ATM or walk into a bank branch and withdraw cash. The ATM will ask whether you want a cash advance or a regular withdrawal; select cash advance. At a bank teller, tell them you want a cash advance on your credit card.
The fee is charged when ready and appears on your next statement. Most credit card companies charge between 3 and 5 percent of the amount withdrawn, with a minimum fee of $5 to $10. A $500 cash advance might cost you $15 to $25 in fees alone. Interest begins accruing the same day — there is no grace period like there is for regular purchases — so a $500 advance at 25 percent APR costs you about $3.42 per day in interest.
Your credit card company sets a separate cash advance limit, which is often lower than your total credit limit. If your credit limit is $5,000 but your cash advance limit is $1,500, you can only withdraw $1,500 in cash even though you have more available credit. Check your card's terms or call the number on the back to find out your cash advance limit before you go to the ATM.
Balance transfer checks
Some credit card companies send you blank checks that draw directly from your credit card account instead of a bank account. These checks carry the same fees and interest rates as cash advances — typically 3 to 5 percent upfront plus interest starting when ready. The advantage is that you can write a check to yourself and deposit it into your bank account, which takes a day or two to clear, rather than withdrawing cash on the spot.
Balance transfer checks are useful if you do not have access to an ATM or prefer not to carry large amounts of cash. The disadvantage is that the fee and interest are identical to a cash advance, so there is no cost savings. You also lose the ability to dispute the transaction the way you can with a regular purchase, since a check is a negotiable instrument that clears like a bank check would.
Not all credit card companies offer balance transfer checks, and those that do may limit how many you can use per month or per year. Check your card's website or call customer service to see whether this option is available to you.
Peer-to-peer payment apps
Apps like Venmo, PayPal, Square Cash, and Google Pay let you send money to another person or to your own bank account. If you link your credit card to one of these apps and send money to yourself, the app transfers it to your bank account. However, most apps charge a fee when you use a credit card instead of a debit card or bank account — typically 1.5 to 3 percent.
The key difference from a cash advance is that the app fee is not the same as a credit card cash advance fee. You are paying the app for processing a credit card transaction, not paying your credit card company for borrowing cash. However, your credit card company may still treat this as a cash advance depending on how the transaction is coded. Some cards code peer-to-peer transfers as purchases (no cash advance fee), while others code them as cash advances (3 to 5 percent fee plus interest).
Before you use this method, contact your credit card company and ask how they classify peer-to-peer transfers from your card. If they treat it as a cash advance, you are paying both the app fee and the credit card fee, which makes it more expensive than going to an ATM. If they treat it as a purchase, you avoid the cash advance fee but still pay the app's processing fee.
Comparing the costs of each method
| Method | Upfront Fee | Interest Starts | Grace Period | Speed |
|---|---|---|---|---|
| ATM cash advance | 3–5% of amount | Same day | None | when ready |
| Balance transfer check | 3–5% of amount | Same day | None | 1–2 days to clear |
| Peer-to-peer app | 1.5–3% (app fee); may add 3–5% if coded as cash advance | Depends on card issuer's coding | None if coded as cash advance; possible if coded as purchase | 1–3 days |
The cheapest option is usually a peer-to-peer app if your credit card company codes the transfer as a purchase rather than a cash advance. The most expensive is a cash advance at an ATM, because you pay both the fee and interest with no grace period. Balance transfer checks cost the same as ATM advances but give you a day or two to move the money, which can matter if you are trying to pay a bill by a important date.
If you need the money for more than a few weeks, the interest cost will exceed the upfront fee. A $1,000 cash advance at 25 percent APR costs $250 per year in interest alone, on top of the $30 to $50 upfront fee. This is why moving money from a credit card should be a last resort, not a regular way to access cash.
Why your credit card company limits cash advances
Credit card companies set a cash advance limit separate from your credit limit because cash advances are riskier for them than purchases. When you buy something with a credit card, the merchant can repossess the item or you can dispute the charge if something goes wrong. When you withdraw cash, the money is yours to spend however you want, and there is nothing to repossess or dispute. The company protects itself by charging higher fees and interest rates and by limiting how much you can withdraw.
Your cash advance limit is typically 20 to 50 percent of your total credit limit, though it varies by card and by your credit history. Some cards set it as low as $500 even if your credit limit is $10,000. You can request a higher cash advance limit by calling the number on the back of your card, but the company may deny the request or may lower your limit if your credit score drops.
Alternatives to moving money from your credit card
Before you pay the fees and interest on a cash advance, consider whether another option might work. If you need cash for an emergency, a personal loan from a bank or credit union usually charges lower interest than a credit card cash advance. If you need money to pay a bill, many billers accept credit card payments directly without requiring you to move the money first. If you need short-term cash, a payday loan or line of credit from your bank may be cheaper, though you should compare the terms carefully.
If you are considering a cash advance because you are short on money, that is a sign to look at your budget and spending. Moving money from a credit card does not create new money — it only borrows against your future income at a high cost. A financial counselor or nonprofit credit counseling service can help you work through a budget without charging you a fee.
Frequently Asked Questions
Does a cash advance show up on my credit report?
The cash advance itself does not appear on your credit report, but the balance does. Your credit utilization — the percentage of your total credit limit you are using — goes up when you take a cash advance, which can lower your credit score. Paying off the balance quickly helps your score recover.
Can I use a credit card cash advance to pay off another credit card?
Technically yes, but it is expensive. You pay the cash advance fee and interest on the borrowed money, then you pay interest on the balance you transfer to the other card. Most people use a balance transfer offer instead, which lets you move a balance from one card to another at a lower or zero percent rate for a set period.
What happens if I cannot pay back a cash advance?
The balance stays on your credit card and accrues interest at your cash advance rate, which is usually higher than your purchase rate. If you miss payments, the card issuer may report it to credit bureaus, which damages your credit score. They may also close your account or take legal action to collect the debt.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Your credit card company sets a cash advance limit, which is usually 20 to 50 percent of your total credit limit. You cannot withdraw more than this limit, even if you have more available credit. Some ATMs also have daily withdrawal limits, which may be lower than your card's cash advance limit.
Do I have to pay the cash advance fee if I pay it back right away?
Yes. The fee is charged when you withdraw the money, not based on how long you keep it. Even if you pay back the cash advance the next day, you still owe the full upfront fee plus one day of interest. This is why cash advances are expensive even for short-term borrowing.