What Is a Credit Card Cash Advance Fee?
Written by: Jacob S.
Published on:
A credit card cash advance fee is a charge you pay when you withdraw cash using your credit card at an ATM or bank. Most credit card issuers charge between 3% and 5% of the withdrawn amount, with a minimum fee typically around $10. These fees are in addition to high interest rates that start accruing immediately, making cash advances one of the most expensive ways to access money.
Key Takeaways
- Most credit card issuers charge 3%–5% of the withdrawn amount or a $10 minimum fee, plus interest rates around 30% that start accruing immediately—no grace period, no exceptions.
- You’re borrowing money from your credit line, not withdrawing your own funds. This difference means you’ll pay steep fees and high interest from day one, unlike fee-free debit withdrawals.
- They can help in rare situations where no other funding is available (like travel emergencies or urgent bills). Still, they’re a last resort given their high cost and impact on your credit utilization.
- Consider personal loans, paycheck advance apps, credit union emergency loans, or 0% APR cards instead. These options offer far lower costs and won’t trigger immediate interest or steep fees.
What Is a Cash Advance?
A cash advance is a service that allows you to withdraw cash using your credit card instead of a debit card. While it might seem convenient when you need physical currency, it's essentially a short-term loan from your credit card issuer that comes with substantial costs.
How does a cash advance work?
When you use your credit card at an ATM or request cash at a bank branch, you're taking a cash advance. The amount you withdraw, plus the cash advance fee, gets added to your credit card balance. You can typically withdraw up to a certain percentage of your total credit limit, known as your cash advance limit, which is often lower than your regular purchase limit.
Unlike a debit card withdrawal, in which you're accessing your own funds, a credit card withdrawal, also known as a cash advance, is really borrowing money. This comes with a whole new set of considerations.
The key difference is ownership. With a debit card, you're simply accessing money you already have in your bank account. With a credit card cash advance, you're borrowing money that must be repaid with interest. This fundamental distinction means cash advances trigger fees, higher interest rates, and immediate interest charges—none of which apply to standard debit card withdrawals.
Related: What increases your total loan balance?
Why Am I Being Charged a Cash Advance Fee?
Credit card companies charge cash advance fees because these transactions involve more risk and administrative costs than regular purchases. Cash is harder to track, can't be refunded, and is more likely to be used in financial emergencies when repayment might be uncertain.
Cash Advance Terms and Fees
Cash advance terms vary by issuer, but most credit cards include several types of fees. The cash advance fee is just the beginning—you'll also face higher interest rates and no grace period. These terms are outlined in your credit card agreement, typically in the section covering cash advances and balance transfers. It's crucial to read this fine print before using your card to withdraw cash.
How Much Is a Cash Advance Fee?
Most credit card issuers charge a cash advance fee of 3% to 5% of the transaction amount. However, there's usually a minimum fee, typically $5 to $10, which applies to smaller withdrawals.
For example, if you withdraw $100 with a 5% fee, you'd pay $5. But if you withdraw $50 with the same percentage, you'd still pay the $5 minimum. Some premium cards or credit unions may offer lower fees, but they're the exception rather than the rule.
Cash Advance Costs for Popular Credit Cards
Understanding how different issuers structure their cash advance fees can help you understand the true cost of this convenience. Here's what you can expect from major credit card companies.
Examples of Cash Advance Fees Across Major Issuers
| Credit Card Issuer | Cash Advance Fee | APR (Cash Advance) | Notes |
|---|---|---|---|
| Chase | $10 or 5% of the cash advance (whichever is greater) | 29.99% – 31.99% | Much higher than purchase APRs; interest starts immediately. |
| Bank of America | $10 or 5% of the cash advance (whichever is greater) | Around 29.99% | Similar fee structure to Chase. |
| Capital One | $10 or 3% of the cash advance (whichever is greater) | Typically around 29.99% | Slightly lower fee percentage than other issuers. |
| Discover | $10 or 5% of the cash advance (whichever is greater) | Around 29.99% | Standard cash advance terms, immediate interest accrual. |
| American Express | $10 or 5% of the cash advance (whichever is greater; varies by card) | Often exceeds 29.99% | Terms may vary depending on the card type. |
| Citi | $10 or 5% of the withdrawn amount (whichever is greater) | Around 29.99% | Similar high-rate structure across its cards. |
| Venmo | No traditional cash advance; standard transaction fee up to 3% may apply | N/A | Payments through Venmo are treated as purchases, not cash advances, when funded correctly. Sending money without a cash advance fee is possible if linked to a debit card or bank account. |
Chase: Typically charges either $10 or 5% of the cash advance amount, whichever is greater. Chase cash advance APRs usually range from 29.99% to 31.99%, significantly higher than purchase APRs.
Bank of America: Usually charges either $10 or 5% of the cash advance, whichever is greater, with APRs for cash advances around 29.99%.
Capital One: Generally charges either $10 or 3% of the cash advance amount, whichever is greater, with cash advance APRs typically around 29.99%. Capital One offers no way to withdraw cash without a cash advance fee.
Discover: Charges either $10 or 5% of the cash advance, whichever is greater, with cash advance APRs around 29.99%.
American Express: Varies by card but typically charges either $10 or 5% of the cash advance, whichever is greater, with APRs that can exceed 29.99%.
Citi: Usually charges either $10 or 5% of the withdrawn amount, whichever is greater, with similarly high APRs for cash advances.
Venmo: Unlike traditional banks, Venmo doesn’t issue cash advances, but if you send money using a linked debit card or balance, you can often do so without triggering a cash advance fee. However, funding payments with a credit card may still incur a small percentage fee, though it’s usually lower and doesn’t start accruing 30% interest like a standard cash advance.
These figures illustrate that while purchase APRs might be competitive (often 18-24%), cash advance APRs are consistently higher across all major issuers, typically approaching or exceeding 30%.
Why Are Cash Advances So Expensive?
Cash advances carry some of the highest costs of any credit card transaction. Understanding why can help you appreciate the importance of avoiding them whenever possible.
Interest rates and fees
Late fees and high interest charges often make cash advances far more expensive than regular credit card purchases. Lenders apply higher rates because cash advances are considered riskier, frequently tied to financial stress and a greater chance of missed or late payments.
Immediate Interest Accrual
Unlike purchases, where interest only applies if you carry a balance past your due date, cash advances begin accumulating interest from the moment you complete the transaction. There's no waiting period—the clock starts ticking immediately, which means even if you pay off your entire statement balance by the due date, you'll still owe interest on the cash advance.
No Grace Period
Most credit cards offer a grace period of 21-25 days on purchases, giving you time to pay off your balance without incurring interest. Cash advances don't have this benefit. The absence of a grace period, combined with immediate interest accrual, means you're paying interest every single day until the cash advance is fully repaid.
When To Consider Using a Cash Advance
While cash advances are generally expensive and should be avoided, there are rare circumstances where they might be your only option.
Situations Where It May Make Sense
Cash advances might be justified in genuine emergencies where you have no other options. This could include situations such as being stranded in a foreign country where your debit card is not accepted, needing to pay a vendor who only accepts cash in an urgent situation, or facing an immediate expense when all other borrowing options have been exhausted. Even in these cases, you should explore every alternative first.
When It Doesn't Make Sense
Cash advances should never be used for discretionary spending, convenience purchases, or non-emergency situations. Don't use them to pay regular bills, make online purchases (use your card directly instead), fund entertainment or dining, or bridge gaps in routine cash flow. If you're considering a cash advance for everyday expenses, it's a sign that you need to reassess your budget and financial planning.
Should You Get a Cash Advance?
The short answer for most people is no. The costs are simply too high to justify except in the most dire circumstances.
Is a Cash Advance Worth It?
A cash advance is rarely worth it due to the combination of fees, high interest rates, and immediate interest accrual. For a $500 cash advance with a 5% fee and 29.99% APR, you'd pay $25 upfront plus about $12.50 in interest if you repaid it within 30 days—that's $37.50 for a one-month, $500 loan, equivalent to a 90% annual percentage rate when fees are included. Compare this to alternatives like personal loans (typically 6-36% APR), borrowing from friends or family, or even some payday loan alternatives.
Don't Apply Blindly
If you're considering a cash advance, first review your credit card agreement to understand the exact fees and rates you'll face. Calculate the total cost, including fees and estimated interest.
Then, explore every alternative, can you wait until payday, borrow from someone you trust, use a payment plan, or access an emergency fund? Only after exhausting these options should you proceed with a cash advance, and even then, have a solid plan to repay it as quickly as possible.
How To Avoid Cash Advance Fees
The best way to handle cash advance fees is to never trigger them in the first place. Here are strategies to help you avoid this expensive trap. Look for options that give you access to funds without a cash advance—like debit-linked services, credit union loans, or fee-free payment platforms.
Alternatives to Cash Advances
- Personal loans: Online lenders and credit unions offer personal loans with much lower APRs than cash advances. While they require an application, they're worth the effort for larger amounts.
- Peer-to-peer payment apps: Services like Venmo, Cash App, and PayPal allow you to transfer money from your bank account without fees. Some even offer small instant loan features with lower costs than cash advances.
- Paycheck advance apps: Apps like Earnin, Dave, or Brigit let you access a portion of your earned wages before payday, often for free or for small subscription fees. Paycheck advance apps and peer-to-peer tools like Venmo or Cash App allow you to access cash without a cash advance fee.
- Credit union emergency loans: Many credit unions offer small-dollar emergency loans (sometimes called payday alternative loans or PALs) with much lower interest rates and fees than cash advances.
- Payment plans: If you need cash for a bill, contact the creditor to arrange a payment plan instead of taking a cash advance to pay the full amount.
How To Find a Fee-Free ATM
To avoid ATM fees altogether when using your debit card, use your bank's ATM locator tool or apps like Allpoint, MoneyPass, or your bank's mobile app. Many banks participate in fee-free ATM networks. Credit unions often belong to aCO-OP Network, which provides access to thousands of surcharge-free ATMs nationwide. Some banks also reimburse ATM fees up to a certain amount each month.
Learn more: Getting a cash advance without a direct deposit
Debit Card That Builds Credit: Does It Exist?
Traditional debit cards don't directly build credit since they don't involve borrowing. However, several newer products bridge this gap. Secured credit cards function similarly to debit cards—you deposit money as collateral—but they report to credit bureaus and help build credit.
Products like Chime Credit Builder, Extra Card, and Grain Card link to your bank account but operate as credit cards that report to credit bureaus. While not exactly debit cards, they offer the spending control of debit with the credit-building benefits of credit cards.
Need Cash, But Only Have Your Credit Card?
If you're in a pinch and need cash, there are better approaches than taking a cash advance directly.
Safer alternatives and short-term loan options
Consider these safer alternatives before resorting to a cash advance:
- Buy now, pay later services: For purchases you'd normally make with cash, use services like Klarna, Affirm, or Afterpay to split payments with little or no interest.
- Credit card balance transfer checks: Some cards offer balance transfer checks with promotional 0% APR periods. While they typically include a 3-5% fee, you avoid ongoing interest if paid within the promotional period.
- 0% APR credit cards: If you can plan ahead, apply for a card with a 0% intro APR on purchases and use it instead of taking cash advances on your existing card.
- Credit union membership: Join a local credit union for access to emergency loans and other affordable credit products designed to help members avoid predatory lending.
- Family or friends: While it can be uncomfortable, borrowing from someone you trust with a clear repayment plan is almost always better than a cash advance.
- Local assistance programs: Community organizations, churches, and nonprofits often provide emergency financial assistance for essential needs.
What Are ATM Withdrawal Limits?
Whether you're using a debit card or taking a cash advance, ATM withdrawal limits will affect how much you can access.
How Limits Work and How They Affect Cash Advances
ATM withdrawal limits are daily maximums set by your bank or credit card issuer to reduce fraud risk. For debit cards, limits typically range from $300 to $1,500 per day. For credit cards, cash advance limits are usually a percentage of your total credit limit—often 20-30%—and there may be separate daily withdrawal limits.
For example, if you have a $5,000 credit limit with a 30% cash advance limit, you can take a maximum of $1,500 in cash advances, but the ATM daily limit might restrict you to $500-$1,000 per day. You can sometimes request temporary limit increases, but this doesn't change the fundamental costs of cash advances.
What Factors Affect Your Credit Scores?
Understanding how credit scores work can help you see the broader impact of financial decisions like taking cash advances.
Does Taking a Cash Advance Impact Your Credit?
Taking a cash advance doesn't directly appear on your credit report as a separate item—it's simply part of your overall credit card balance. However, it can indirectly impact your credit in several ways. If the cash advance increases your credit utilization ratio (the percentage of available credit you're using), this can negatively affect your score, especially if you exceed 30% utilization. High utilization suggests financial stress to lenders and can drop your score by several points. Additionally, if the cash advance leads to difficulty making payments, resulting in late or missed payments, this will severely damage your credit. Payment history is the most important factor in credit scores, accounting for about 35% of your FICO score.
The main factors affecting credit scores are: payment history (35%), amounts owed or credit utilization (30%), length of credit history (15%), new credit inquiries (10%), and credit mix (10%). While a cash advance itself doesn't hurt your score, its consequences—higher balances and potential payment difficulties—can negatively impact the two most important factors.
Cash advances are one of the most expensive ways to access money, combining high fees, elevated interest rates, and immediate interest accrual. Understanding these costs is crucial for making informed financial decisions.
Credit card cash advances typically cost 3-5% of the withdrawn amount with a $5-$10 minimum fee, plus interest rates around 30% that begin accruing immediately with no grace period. This combination makes even short-term cash advances extremely expensive. For a $500 cash advance held for just one month, you'll pay approximately $37.50 in total costs—that's nearly 8% of the amount borrowed in just 30 days.
Avoid cash advances for any non-emergency situation. They should never be your first option, or even your second or third. Instead, explore alternatives like personal loans, paycheck advance apps, payment plans, borrowing from friends or family, or using peer-to-peer payment services. Build an emergency fund over time so you're not forced into expensive borrowing when unexpected expenses arise. Even small regular savings—$25 or $50 per paycheck—can create a buffer that prevents the need for costly cash advances. If you find yourself regularly tempted to take cash advances, this is a strong signal to reassess your budget, reduce expenses where possible, or seek additional income sources.
