Withdrawing Cash on a Credit Card: Why It's Expensive
Updated 1 August 2026
Almost every credit card lets you withdraw cash at an ATM against your credit limit — and almost every credit card makes this the single most expensive way to use the card.
Two costs, both immediate
A cash advance typically charges a flat fee upfront (commonly around 2.5–3% of the withdrawn amount, with a minimum charge) and starts accruing interest from the day of withdrawal — there is no grace period on cash advances, unlike regular purchases, regardless of your payment history.
Why it adds up fast
Combine the upfront fee with interest accruing immediately at the card's standard high rate, and a cash advance carried for even a few weeks can cost several times what the same amount would cost as a regular purchase paid off by the due date.
What to use instead
A personal loan, an overdraft facility, or even a short-term loan against a fixed deposit will almost always be cheaper than a credit card cash advance for a genuine cash need — cash advance is worth treating as a true last resort, not a convenient ATM option.