How to Get a Cash Advance with a Credit Card (And Why It’s Not a Good Idea)

A cash advance on a credit card is a way to access cash, usually for emergencies. You can use an ATM to instantly pull funds from your credit card limit.

While this is convenient and easy to access funds, the fine details can be cause for concern. Interest rates can be very high, and fees can add up.

This article explains why a cash advance is rarely a good option, particularly not for regular use. It also covers the pros and cons of cash advances and alternative options to consider.

What is a credit card cash advance?

A credit card cash advance allows you to withdraw cash from your credit card limit rather than make a purchase on credit. It's essentially a short-term loan.

Cash advances typically have higher interest rates, which makes them less than ideal for most situations.

How to get a cash advance using a credit card

To get a cash advance with your credit card, simply use an ATM:

1. Insert your card into the ATM.
2. Enter your PIN.
3. Select the "withdraw" option.
4. Specify the amount you'd like to withdraw.
5. Agree to any applicable fees and confirm your withdrawal.

When you look at your credit card account, you'll see the amount you withdrew deducted from your credit limit. Your ATM receipt should show this as well.

Take note: In some cases, using your credit card to fund an online account may be treated as a cash advance rather than a regular purchase. Check the fine print to make sure that interest doesn't sneak up on you.

How much do credit card cash advances cost?

Cash advance fees vary by bank and, in some cases, are a percentage of the amount advanced. Here are the typical fees and the interest rates:

As you can see, fees vary widely while interest rates tend to be fairly similar among banks. This is why it pays to read your credit card's terms and conditions before cashing out.

Pros and cons of credit card cash advances

Here are some of the benefits and drawbacks of credit card cash advances:

• Convenient: Many credit cards will let you get a cash advance through an ATM – similar to how you'd use a debit card – so long as it's within your credit limit.
• Cheaper than other quick-cash options: A cash advance, even with its extra fee and high interest rate, is less expensive than getting a payday loan or an unsecured loan from a non-traditional lender.

• High interest rates: Cash advance interest rates are usually between 20% and 23% and will add up faster than you may expect – especially compared to the interest rates you'll see on lines of credit.
• Fees can add up: In addition to higher interest rates, you'll also get hit with an immediate cash advance fee. The fee can be a flat fee, a percentage of the amount you're withdrawing, or both.
• No grace period: Unlike credit card purchases, which have a grace period before interest begins accruing, cash advances start accruing interest immediately.
• No rewards earned: Even credit cards that earn rewards on "all purchases" won't earn on cash advances (or balance transfers, or other non-eligible purchases).

Alternatives to cash advances

If you need cash immediately but don't want to take out a cash advance, you've got other options, mainly a personal loan or line of credit.

Personal loan

Loans and cash advances are similar in many ways: A financial institution lends you money for an agreed-upon amount. That said, personal loans usually have more agreeable lending terms.

Unsecured personal loan

An unsecured personal loan typically has a lower interest rate than a credit card cash advance.

Although there aren't additional fees, your lender might charge an origination fee for the loan, so read terms and conditions before signing on the dotted line.

We should also note that, as an unsecured loan, approval isn't guaranteed. The lender will pull your credit score to determine if you qualify and, if so, for what amount and at what interest rate.

In this case, you'll likely use a "traditional lender" – generally your regular bank, though some fintech firms and credit unions also offer these loans.

Secured personal loan

Secured loans aren't as common because they require you to put up collateral, such as real estate, vehicles, or other assets. It may seem like a hassle, but it reduces the lending risk for the financial institution, so they're more likely to offer you better borrowing rates.

However, if you can't repay the loan, the lender can keep your collateral, making it much more costly than a cash advance in the long run.

From a non-traditional lender

Non-traditional lenders, also called B-Lenders, are often somewhat predatory, taking advantage of people in need to make a profit. Interest rates can be as high as 20% – 35%.

They used to be even higher, but government regulations changed in January 2025, limiting interest rates on loans.

As you can see, it's usually best to avoid loans from this type of lender.

Payday loans

Payday loans are short-term, instant loans that you can get from a payday loan lender. They're convenient because locations are everywhere, but they can charge as much as 365% interest on the loan.

As you can probably tell, payday loans are considered extremely predatory because it's so easy for people to fall into a spiral of debt they can't escape.

Payday loans circumvent Canadian government limitations by meeting specific qualifications: the loan must be $1,500 or less for a term of 62 days or less.

Line of credit

Instead of borrowing a lump sum of money as you do with a personal loan, a line of credit is a little more flexible. When you take out a line of credit, the lender agrees to lend you up to a specific amount of money.

You can borrow against the total amount as needed, but you'll only be charged interest on the amount you actually borrow, not on the entire amount of credit available to you.

Unsecured line of credit

Unsecured lines of credit are a risky option for lenders, so they often have the highest interest rates among your alternatives.

If you're considering an unsecured line of credit, compare the interest rates closely with those for cash advances, as they might be pretty close.

Secured line of credit

Like a secured loan, a secured line of credit also requires collateral. You may have heard of the most popular type – a home equity line of credit or HELOC.

As you might guess, a HELOC requires you to put your home on the line to access the line of credit, so you should only consider it in extreme situations.

FAQ

What is a cash advance on a credit card?

A cash advance is a withdrawal of cash against your card's credit limit. Cash advance rates are higher than purchase rates, and you immediately begin accruing interest once the cash is in your hands. There is often an associated fee, too.

How can I get a cash advance from my credit card?

Insert your credit card into an ATM and select the cash withdrawal option. Specify how much you want to take out, and the machine will dispense it. The amount is then deducted from your credit card limit, and interest begins accruing in addition to the cash advance fee.

What's the best cash advance credit card?

The best cash advance credit card is the Scotiabank American Express Platinum Card, which has a 9.99% cash advance rate. But it comes with a high annual fee of $399. For a lower fee, your best bet is the TD Low Rate Visa Card, which gets you cash advances at only 12.9% and only costs $25 annually.

Is a cash advance a good idea?

Cash advances aren't generally a good idea, but they may be the best option in some situations. If you don't have access to cheaper lending options like a personal loan, and you absolutely need the funds, a cash advance is a reliable way to access cash. Just prioritize paying off the advance quickly since the fees and interest rates are so high.