Finance glossary
Cash Advance
Also known as: Cash withdrawal on a credit card
In simple terms
A cash advance is using your credit card to get cash — for example, withdrawing money from an ATM. It is treated differently from a purchase and is an expensive way to use a credit card.
On this page
What does cash advance mean?
A cash advance is when you use a credit card to obtain cash rather than to pay for goods or services. The most obvious example is withdrawing money from a cash machine, but it can also include gambling transactions, buying foreign currency, or some money transfers.
Credit card providers treat cash advances differently from ordinary purchases, and almost always more expensively.
How a cash advance works
Cash advances usually carry a fee (often around 3%, with a minimum) and frequently a higher interest rate than purchases. Crucially, they normally do not benefit from the interest-free period — interest is charged from the day you take the cash.
Cash advances can also show up separately on your credit file. Frequent use can look, to lenders, like a sign of financial stress.
How could this affect me?
Because interest starts immediately and a fee applies, a cash advance is one of the most expensive ways to use a credit card — even if you clear your statement in full each month.
If you need cash, using a debit card or your own savings is almost always cheaper. Keep credit card cash advances for genuine emergencies, and repay them as fast as you can.
Things to watch out for
- Interest is usually charged from day one, with no interest-free period.
- A cash advance fee (often around 3%) applies on top.
- The cash advance interest rate is often higher than the purchase rate.
- Some spending you might not expect — gambling, currency, money transfers — can count as a cash advance.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, The cost of withdrawing cash on a credit card (opens in a new tab). Accessed 22 Aug 2026.