A cash advance usually costs a fee of about 5% (often with a $10 minimum) plus interest at a higher APR that starts immediately, with no grace period. Taking out $500 at a 29% cash advance APR costs roughly $37 in the first month.
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What one month of a cash advance costs
| Amount | Fee (5%, $10 minimum) | 30 days of interest at 29% | Total first-month cost |
|---|---|---|---|
| $200 | $10.00 | $4.77 | $14.77 |
| $500 | $25.00 | $11.92 | $36.92 |
| $1,000 | $50.00 | $23.84 | $73.84 |
The fee and APR here are common examples; your card’s terms list the exact numbers. ATM operators may add their own fee on top.
[cb_photo id=»17-B» alt=»Hands counting cash next to a phone calculator and a cash advance fee summary» caption=»The fee and the higher APR start the day you take the cash.»]
Three ways cash advances differ from purchases
- No grace period: interest starts the day you take the cash.
- Higher APR: the cash advance rate is often several points above the purchase rate.
- A separate limit: your cash advance limit is usually lower than your credit limit.
Things that count as cash advances
- ATM withdrawals with a credit card.
- «Convenience checks» your issuer mails you.
- Some money transfers, casino chips and buying foreign currency or certain cash-like items, depending on the issuer.
Cheaper alternatives
- Pay by card directly if the merchant accepts it; that’s a purchase, with a grace period.
- Use your emergency fund, even a small one. Here’s how much to keep.
- Ask for a payment plan from the company you owe; many offer one.
- A small personal loan from a bank or credit union, if you need more than a few hundred dollars and can repay over months.
Avoid payday loans: their fees can work out to an APR far higher than a cash advance. Our guide to APR vs. interest rate explains why.
If you already took one
Pay it off as fast as you can, ideally in full with your next payment. Payments above the minimum are generally applied first to the balance with the highest APR, which is often the cash advance.
Three ways to cover $500 for about three months
| Option | Approximate cost | Notes |
|---|---|---|
| Pay by credit card, repay in 3 months at 22% | $18 | Interest only; no grace if you already carry a balance |
| Cash advance, repaid in 3 months at 29% | $49 | $25 fee plus about $24 of interest |
| Payday loan, rolled over 6 times | $450 | A typical $15 fee per $100 every two weeks |
Paying a merchant directly with the card, when possible, is far cheaper than taking cash. Both are far cheaper than rolling over a payday loan.
Convenience checks
Some issuers mail «convenience checks» linked to your card. They usually count as cash advances or balance transfers, with a fee and often no grace period. If you don’t plan to use them, shred them so nobody else can.
If you need cash regularly
- Build a small cash cushion, even $300 to $500, for exactly these moments.
- Check whether your bank or credit union offers small-dollar loans with lower costs.
- Use a simple budget to spot the months when cash gets tight.
More questions
Does a cash advance hurt my credit score?
Not directly, but it raises your balance and your utilization, which can lower your score until you pay it off.
Is a debit card ATM withdrawal a cash advance?
No. With a debit card you’re taking your own money, although ATM fees may apply.
Can I turn off cash advances on my card?
Some issuers let you lower or remove your cash advance limit. Ask customer service.
How is cash advance interest calculated?
Interest starts the day you take the cash, with no grace period, at the card’s cash advance APR, calculated daily. $500 at 29% costs about $11.92 in interest in 30 days, plus the cash advance fee.
Is a cash advance a good idea?
Usually only as a last resort. The fee and higher APR make it one of the most expensive ways to borrow; the alternatives in this guide are cheaper.
How do I pay off a cash advance faster?
Pay more than the minimum. By law, the amount above the minimum must go to the balance with the highest APR first, which is usually the cash advance.
The bottom line
A cash advance is one of the most expensive ways to borrow on a credit card: a fee upfront and a high APR from day one. Use it only for a true emergency and repay it quickly.
Sources
Educational content only, not financial advice. Fees and APRs vary by card; your cardholder agreement lists yours.