Can You Get Cash Back With a Credit Card?

You can obtain cash using a credit card, but the methods and financial implications vary significantly. Understanding these distinct approaches is important for anyone considering using their credit card for cash access.

Getting Cash Through a Credit Card Cash Advance

One direct method of obtaining physical cash from a credit card is through a cash advance. This transaction allows you to borrow money directly from your available credit line, rather than using the card for purchases. Cash advances can be obtained in several ways, including withdrawing funds from an ATM using your credit card PIN, receiving cash over-the-counter at a bank, or cashing convenience checks provided by your credit card issuer.

A significant financial implication of a cash advance is the immediate imposition of fees and interest. Credit card issuers typically charge a cash advance fee, which is often a percentage of the amount advanced, commonly ranging from 3% to 5%, with a usual minimum fee of around $10. Unlike standard purchases, interest begins to accrue immediately on cash advances from the transaction date, without the benefit of a grace period. Annual percentage rates (APRs) for cash advances are generally higher than purchase APRs, often falling within the 20% to 30% range.

The amount of cash you can access through a cash advance is typically limited. Credit card issuers often set a cash advance limit that is lower than your overall credit limit for purchases.

Earning Cash Back Through Rewards Programs

A different way to “get cash back” with a credit card involves earning rewards through your spending. Many credit cards offer cash back as an incentive for making purchases, distinguishing it from a direct cash advance. This type of cash back is a reward program where a percentage of your spending is returned to you.

Cash back is commonly earned as a straightforward percentage of all purchases, such as 1% or 2% on everything. Some cards offer tiered rewards, providing higher percentages on specific spending categories like groceries or gas, or rotating bonus categories that offer elevated cash back rates for certain types of purchases during limited periods. The accumulated cash back may appear as a direct cash balance on your account or as points that can be converted into cash.

When it comes to redemption, cardholders have several options for their earned cash back. Common choices include receiving a statement credit, which reduces your outstanding balance, or a direct deposit into a linked bank account. Some programs also offer the option to receive a physical check or convert your cash back into gift cards for various retailers. Many programs require a minimum redemption threshold, such as $25, before you can access your accumulated rewards.

Important Considerations for Credit Card Cash Back

Cash advances are a form of short-term borrowing, often for unexpected financial needs, incurring immediate costs. In contrast, cash back rewards are benefits earned through regular spending, providing financial benefits when managed responsibly.

The impact of cash advances on your credit score warrants careful consideration. Frequent cash advances or those that lead to a high credit utilization ratio—the amount of credit you are using compared to your total available credit—can negatively affect your credit score.

Before engaging in either type of transaction, it is advisable to review your specific credit card’s terms and conditions. This includes understanding the cash advance fees, interest rates, and any specific rules regarding interest accrual. Similarly, for cash back rewards programs, it is important to know the earning rates, any redemption minimums, and potential expiration policies for your accumulated rewards.

It is useful to distinguish credit card cash access from debit card cash back at a point of sale. Debit card cash back comes directly from your own bank account balance and usually does not involve fees or interest. This differs from credit card cash advances, which are a form of borrowing, and credit card cash back rewards, which are earned benefits for spending.