Yes, you can get cash back from a credit card, but the method and cost depend on the card type and what you're trying to do
Cash back from a credit card works in two separate ways, and they are not the same thing. The first is a rewards program that returns a percentage of what you spend as statement credit or a deposit to your bank account — this costs you nothing extra. The second is a cash advance, where you withdraw actual cash from an ATM or bank using your credit card as a loan — this charges interest when ready and usually costs a fee upfront.
Most people asking this question mean the rewards version. If your card offers cash back rewards, you earn it automatically on purchases you make anyway, and you can redeem it as a statement credit (which reduces your balance) or as a direct deposit to a linked bank account. A cash advance is different: you are borrowing money at a higher interest rate, and it starts accruing interest the day you withdraw it, with no grace period like you get on regular purchases.
Key Takeaways
- Cash back rewards are earned on purchases and cost nothing; you redeem them through your card's online portal or app, usually as a statement credit or bank deposit.
- A cash advance lets you withdraw money using your credit card, but charges an upfront fee (typically 3 to 5 percent) plus a higher interest rate than regular purchases, with interest starting when ready.
- Rewards cash back is paid by the card issuer as part of the card's benefits; cash advances are loans you take from the card issuer and must repay.
- If you need actual cash and have a rewards balance, redeeming rewards as a bank deposit is free; using a cash advance should be a last resort because of the cost.
How cash back rewards work and how to redeem them
When you use a card that offers cash back rewards, the card issuer tracks your spending and credits a percentage of each purchase back to your account. The percentage varies by card — some offer 1 percent on all purchases, others offer higher rates on specific categories like groceries or gas, and some offer a flat rate on everything. This reward is yours to keep; the card issuer pays it, not you.
To redeem your rewards, log into your card's online account or mobile app and look for a "Rewards" or "Benefits" section. You will see your current balance in dollars or points. Most cards let you choose how to redeem: as a statement credit (which reduces your next bill), as a direct deposit to a bank account you link, or sometimes as a check mailed to you. Statement credit is when ready; bank deposits usually post within one to three business days. There is no fee for redeeming rewards this way.
Some cards also let you redeem rewards for travel, merchandise, or gift cards, but if you need cash, the statement credit or bank deposit option is what you want. Check your card's rewards page to see which redemption methods are available — not all cards offer all options.
What a cash advance is and why it costs more
A cash advance is a short-term loan you take against your credit card's available balance. You can get one by visiting an ATM with your card and PIN, by going to a bank teller and asking for a cash advance, or sometimes through a convenience check the issuer sends you. The moment you withdraw the money, you owe it back to the card issuer.
Cash advances carry three costs that regular purchases do not. First, there is an upfront fee, usually 3 to 5 percent of the amount you withdraw — so a $500 cash advance might cost $15 to $25 just to get the money. Second, the interest rate on cash advances is higher than the rate on regular purchases, often 2 to 3 percentage points above your standard APR. Third, and most important, interest starts accruing when ready. Unlike regular credit card purchases, which have a grace period before interest kicks in, a cash advance charges interest from day one.
Because of these costs, a cash advance should only be used in a genuine emergency when you have no other way to get cash. If you have a rewards balance sitting on your card, redeeming it as a bank deposit is free and takes a few days — that is almost always the better choice.
When you might use a cash advance and what it costs in real terms
A cash advance makes sense only when you need cash when ready and have no other option. Examples include a car breakdown where a mechanic only takes cash, a medical expense at a clinic that does not take cards, or a family emergency where you need money before your next paycheck and cannot wait for a bank transfer.
Here is what a cash advance actually costs. Say you withdraw $500 at a 4 percent fee and a 24 percent APR. The fee is $20 upfront. If you pay back the $520 in full within one month, the interest is roughly $10 more, for a total cost of $30. If you carry the balance for three months, the interest alone could be $30 or more. Compare this to redeeming $500 in rewards as a bank deposit, which costs nothing and takes two to three days — the only reason to use a cash advance is if you cannot wait.
Before you take a cash advance, check whether your card issuer offers any way to get cash without the advance fee. Some cards let you withdraw cash at partner banks for free, or let you transfer a balance to a linked bank account at no cost. Your card's terms and conditions or customer service line can tell you what options are available.
The difference between rewards cash back and a cash advance
| Feature | Rewards Cash Back | Cash Advance |
|---|---|---|
| What it is | Money the card issuer gives you as a reward for spending | A loan you take against your credit card balance |
| How you get it | Earned automatically on purchases; redeemed through your account | Withdrawn at an ATM, bank, or via convenience check |
| Cost to you | None | Upfront fee (3–5%) plus interest from day one |
| Interest rate | Not applicable | Higher than regular purchase APR, often 24%+ |
| Grace period | Not applicable | None; interest starts when ready |
| Best use | Any time you want cash from your rewards | Emergency only, when you cannot wait for other options |
How to avoid needing a cash advance
The best way to avoid a cash advance is to keep cash on hand and to know where you can get it quickly without borrowing. Keep $100 to $200 in actual cash at home for small emergencies. Know which ATMs near you are free to use — your bank's ATMs are usually free, and many grocery stores offer free cash back with a debit card purchase even if you do not have an account there.
If you use a credit card for most purchases, your rewards will build up over time. Redeeming rewards as a bank deposit gives you cash in your account within a few days at no cost. This is a much cheaper way to get cash than a cash advance, so if you have rewards sitting on your card, redeem them before you consider borrowing.
If you find yourself needing cash advances regularly, that is a sign your budget does not match your income. A cash advance is expensive and should be temporary. If you are using one more than once or twice a year, consider whether you need to build an emergency fund, adjust your spending, or look at your income.
How to redeem rewards as cash in your bank account
The process varies slightly by card issuer, but the basic steps are the same. First, log into your credit card account online or through the mobile app. Look for a section labeled "Rewards," "Benefits," "Redeem," or "Account Benefits" — the exact name depends on your issuer. Click on it and you should see your current rewards balance in dollars.
Next, select the option to redeem as a bank deposit or direct deposit. You will be asked to confirm or enter a bank account number. Use the account you want the money deposited to — this is usually a checking account, but some issuers allow savings accounts too. Confirm the amount you want to redeem and submit. Most issuers will show you a confirmation number and an estimated deposit date, usually one to three business days.
If you cannot find the rewards section in your online account, call the customer service number on the back of your card. A representative can walk you through the redemption process or redeem the rewards for you over the phone. Some older cards or smaller issuers may not offer online redemption, so a phone call might be your only option.
Frequently Asked Questions
Can I get cash back at a store checkout with a credit card?
Yes, many stores let you request cash back when you swipe or insert your credit card at checkout, just like with a debit card. The store adds the cash amount to your total purchase, and you get the cash when ready. This is a regular purchase, not a cash advance, so it does not carry the extra fees or interest. However, not all stores offer this, and some have limits on how much cash back you can get.
Do I have to pay taxes on cash back rewards?
No. Cash back rewards are not considered income by the IRS because they are a reduction in the price you paid for the item, not a separate payment. You do not report them on your tax return. This is different from some other rewards like sign-up bonuses, which may have tax implications depending on the amount and your card issuer's reporting.
What happens if I take a cash advance and do not pay it back right away?
The balance stays on your credit card and accrues interest at the cash advance rate, which is usually higher than your regular purchase rate. The interest compounds daily, so the longer you carry it, the more you owe. If you do not pay your full bill by the due date, you may also be charged a late fee. This is why cash advances are expensive — the interest adds up quickly.
Can I use rewards cash back to pay off a cash advance?
Yes. When you redeem rewards as a statement credit, it reduces your overall credit card balance, which includes any cash advance balance. This is actually a smart move if you have taken a cash advance — redeem your rewards when ready to pay down the expensive debt as fast as possible.
Is there a limit to how much cash back I can earn?
Most cards do not have a hard limit on how much rewards you can earn, but some cards cap rewards in certain categories. For example, a card might offer 5 percent cash back on groceries but only up to $1,500 in purchases per quarter, then 1 percent after that. Check your card's terms to see if any caps explore. Your total available credit limit does not change based on rewards earned.