Cash advance

What It Means

(1) A credit card cash advance is cash you borrow against your card's credit lineCredit limitThe most your card company lets you owe on a credit card or line of credit at one time. See more, at an ATM, at a bank or with a check your card issuer sends you. The Consumer Financial Protection Bureau (CFPB) explains that interestInterest rateThe yearly percentage a lender charges for borrowing money, not counting fees; the APR adds certain fees to show a fuller cost. See more on it generally starts the day you take it, because cash advances don't get the grace periodCredit card grace periodThe time between a card statement and its due date when purchases collect no interest, as long as you pay the full statement balance. See more purchases can, and HelpWithMyBank.gov, run by the OCC, says the bank can charge a fee if your agreement discloses one. (2) "Cash advance" is also what apps call a small advance on pay you haven't received yet, which usually comes with its own fees.

How It Sounds at Home

• "I took a cash advance on my card at the ATM."
• "The fee hit before I even left the machine."
• "I got a cash advance from an app until payday."

The Breakdown

Worked example. Alex takes $300 from an ATM with a credit card. The example card charges the greater of $1010,000 stepsA popular daily step goal that began as the name of a 1960s Japanese pedometer; later studies find health benefits begin well below it. See more or 5% as a fee and 29% APR on cash advances, and Alex repays in 30 days:

What the result means. The $300 cost $22.15 for one month, 7.4% of the cash. Spent as a purchase instead and paid in full by the due date, on a card with a grace period, the same $300 would have added no interest at all. Most of the cost here is the fee, so a small advance costs proportionally more than a large one when a minimum fee applies.

App advances. Apps that advance part of your pay usually charge in other ways. The CFPB's research found that workers who want the money right away generally pay an expedited fee, and the FTC has taken action over hidden costs. In November 2023 the FTC announced $18 million in refunds for Brigit customers over promised instant advances and a $9.99 monthly membership that blocked cancellation, and in March 2025 Cleo AI agreed to pay $17 million.

Good to Know

The CFPB says that if you use your card for a cash advance or a check from your card issuer, you generally start paying interest on the date of the transaction, since there's no grace period for them. HelpWithMyBank.gov, run by the Office of the Comptroller of the Currency, says a bank can charge a cash advance fee if it was disclosed in your account agreement. Read the agreement for the fee, the rate that applies to cash advances and any ATM charges, and for an app, read every fee and membership charge before you accept an advance.

Related Terms and Categories

• Payday loan

  A small, short-term, high-cost loan, generally $500 or less, that's usually due in one payment on your next payday.

• Credit card grace period

  The time between a card statement and its due date when purchases collect no interest, as long as you pay the full statement balance.

• Emergency fund

  Money set aside only for unplanned costs, like a car repair, a medical bill or a lost paycheck, kept where you can reach it quickly.

• Overdraft

  When a payment is bigger than your checking balance and the bank pays it anyway, leaving a negative balance you owe back, usually plus a fee.

Household money and budgeting