January 24, 2023

How to get a credit card cash advance

Learn what it could cost.

When you need cash quickly, options can seem limited. A credit card cash advance might be a helpful option, but it's not right for every situation. Let's take a look at what a credit card cash advance is, when it may be an appropriate solution when used responsibly and when you may want to look elsewhere for funds.

What is a credit card cash advance?

A credit card cash advance is when you use your credit card to withdraw cash and the amount is charged to your credit card balance. You can get a cash advance at an ATM, at a bank or by depositing a cash advance check.

The amount withdrawn from a credit card cash advance counts toward your balance. However, you usually can’t borrow all the way up to the total credit limit. The cash advance limit is often a specific percentage of the total credit card limit and will vary depending on the card provider. 

Credit card cash advance fees

You may be charged a higher interest rate for cash advances on your credit card than for regular purchases. You may also have to pay a separate cash advance fee. If that fee is, for example, 5% of the withdrawn amount, then a withdrawal of $1,000 would generate a $50 fee. 

Cash advance pros and cons

Pros:

  • If you need a large amount of cash quickly and don’t have money in your bank account, a credit card cash advance can help you in a pinch. It’s also a faster way to get money than trying to take out a traditional loan.
  • A cash advance might be a good option if you need to make a large payment on a tight timeframe to someone who can't accept a credit card. For example, if rent is due, a cash advance could help you avoid late fees or pressure from your landlord.

Cons:

  • With a cash advance, you’ll usually start accruing interest immediately. This is an important distinction from buying something with a credit card when you don't start accruing interest until after the payment due date.
  • If you use an ATM to take out a cash advance, you’ll likely have to pay an ATM fee as well. The exact amount will vary depending on the ATM operator.

Credit card cash advances can be useful, but they are just one option when it comes to getting cash quickly. It’s important to assess the reasons you need access to cash.

One way to assess if it’s a good idea is if you can pay it back in a short amount of time. For instance, if you know your paycheck will be deposited in a few days, you can pay off the cash advance quickly.

It’s also essential to make sure you understand the terms of a withdrawal before you make it.

This page and the information contained herein is for educational purposes only. The information is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any product, service, or strategy to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any links to other websites are included for your convenience only. Bread Financial does not endorse any product or service, and is not responsible for the accuracy or reliability of the information, made available through such sites.