Does a Cash Advance Hurt Your Credit?
- Cash advances can hurt your credit score if you’re already using 30% or more of the limit on your credit cards.
- Interest on cash advances starts immediately, unlike with regular credit card purchases. Any late payments can harm your score.
- Cash advances aren’t always bad, but they are an expensive way to borrow and can trap you in a cycle of debt.
Yes, getting a cash advance can affect your credit score — but it doesn’t always hurt it.
Cash advances and credit card purchases affect your credit score in the same way, by increasing the amount of revolving debt you have (which can be bad, depending on how much you had already).
However, making your payments on time as you repay the cash advance can help raise your score.
What is a credit card cash advance?
Instead of swiping at the register or entering your card number online, a cash advance lets you get physical cash from your credit card.
There are a few different ways to get a cash advance — for one, you can use most ATMs. Your credit card company might also send you convenience checks. These work like regular personal checks, but the money comes out of your credit card as an advance instead of from your bank account.
Tapping your plastic for paper can be convenient — but at what cost?
Cash advance interest rates are usually higher than with regular credit card charges. In addition, interest starts racking up as soon as you take the advance. With a regular charge, you won’t pay interest as long as you pay your balance in full before the end of your billing cycle.
Most credit card companies also charge a cash advance fee — 5% of your cash advance amount is typical.
Does a cash advance hurt your credit?
Using your current credit card to get a cash advance won’t directly affect your credit like it would if it were a new loan.
That said, you should still follow the best practices that apply anytime you use a credit card. Below are some cases where a credit card cash advance could hurt your score.
If you make late payments
Your monthly credit card bill will be higher if you take out a cash advance. It’s also easy to underestimate how fast interest can run up on a cash advance because of how your credit card payments are applied.
Over time, your credit card bill might grow so high that you start missing payments. That can be a big problem, because your payment history makes up 35% of your credit score.
You might need to make more than the minimum amount due to make a dent in your cash advance debt.
Your credit card payment usually goes toward interest and fees first. Whatever is left over goes to your debt, from the lowest to highest rate. Since cash advance rates are often higher, that debt may get paid last.
If your credit utilization ratio is close to or above 30%
Your credit utilization ratio measures how much revolving debt (like credit card debt) you have compared to how much you have available.
Lenders like to see you use under 30% of your available credit each month — above that, your credit score may fall. A large cash advance could raise your credit utilization ratio by a lot.
Cash advance pros and cons
As long as you’re able to pay it off, taking a small cash advance out to cover an emergency could be a good option. But if you’re taking out cash advances to cover your regular expenses, you could get trapped in a credit-ruining cycle of debt.
Here are some cash advance pros and cons to consider:
Pros
- Low rates for excellent credit
- Easy way to access cash fast
- Can help your credit score if you make on-time payments
Cons
- Higher interest than regular credit card purchases, and interest starts racking up right away
- May need to pay more than the minimum due to pay off your cash advance in a reasonable time
- Can come with fees (like cash advance and ATM fees)
- Can hurt your credit score if you pay late or have a 30% or higher credit utilization ratio
You can monitor your credit score and get personalized recommendations and money tips, all for free, by signing up for LendingTree Spring. You also get free copies of your credit report from the major credit bureaus.
Cash advance alternatives
Personal loan
If you have excellent credit and need hundreds (or thousands) of dollars, a personal loan is likely better than a cash advance.
According to a LendingTree study, the average personal loan rate for LendingTree users with a 720-or-higher credit score was 17.18% in the first quarter of 2025. The current average credit card rate is 24.33% (and that’s for regular transactions, which usually have lower rates than cash advances).
Debt consolidation loan
You normally can’t pay one credit card off using another credit card — at least, not directly. A loophole some people take is to use a cash advance instead.
A debt consolidation loan could make more sense. This type of personal loan can be used to cover multiple credit card bills. Depending on your credit score, you might even get a lower interest rate than what you’re paying now.
Payday alternative loan (PAL)
A payday alternative loan (PAL) is a lower-interest, short-term loan offered by some federal credit unions. These loans are designed to help people with less-than-perfect credit avoid predatory payday lenders. For PALs, interest rates can’t exceed 28% due to federal law.
These loans can be a little harder to find, and you’ll need to be a credit union member for at least a month before you can qualify. Still, it’s worth researching the credit unions in your area and possibly joining in case you need to borrow in the future.
Frequently asked questions
When it comes to credit reporting, lenders can’t see the difference between credit card cash advances and credit card charges — both are listed as general credit card debt.
It’s not necessarily bad to get a credit card cash advance, but it shouldn’t be something you do often. Cash advances usually have higher rates than regular credit card charges, and you’ll probably pay a fee. Interest also starts piling up as soon as you take the advance.
That said, cash advances can be helpful in a bind — just be sure to have a clear payoff plan.
Credit card companies normally apply your payment from the lowest to highest interest rate. Because your advance will probably be higher interest, you may need to pay more than the monthly minimum amount due to pay down your cash advance in a reasonable amount of time.
If you aren’t careful, you could end up paying a lot of interest when you take a cash advance.
Interest doesn’t work on a cash advance like it does when you use your card for regular purchases. On a cash advance, interest starts accruing right away, but on a regular charge, you typically get a 30-day grace period.
Rates are also higher on advances, which means your advance is usually the last to get paid when your card company applies your payment.
Learn more about your credit score!
Want to know your credit score? Click here.
Learn more about credit repair companies!
How is my credit score calculated?
Get debt consolidation loan offers from up to 5 lenders in minutes