Can You Get Cash Back With a Credit Card​? 4 Ways Explained

There are four main ways to get cash back with a credit card:

• Earning cash back rewards on purchases
• Getting cash back at checkout
• Redeeming credit card rewards
• Taking out a cash advance

The right option for you depends on what you want to achieve. Below, we break down each option so you can choose the best cash back method for you.

Earn cash back rewards on purchases

When you think about cash back in relation to a credit card, this is probably what you picture. You spend money on everyday purchases, like groceries, gas, dining, or online shopping, and earn a percentage back.

Credit cards typically offer 1% to 5% cash back on purchases. Flat-rate cards offer the same cash-back percentage on all purchases, while tiered cards offer higher rates in certain categories, such as groceries or travel.

The more you use your credit card, the faster your cash back rewards will add up. Credit card cash back rewards typically don’t come with additional costs if you pay your balance in full and on time.

Get cash back at checkout

You know about debit card cash back at the register – when you ask the cashier for cash back at the time of purchase, the amount is added to your purchase total. This can be an excellent way to avoid out-of-network ATM fees.

Most credit card companies don’t include this feature on their cards. But some – in particular, Discover® – may. Limits vary by store, and not all stores offer this feature. Check with your card issuer to see if your card qualifies and which stores participate.

Redeem rewards as a statement credit or deposit

Once you’ve built up your credit card rewards, you typically have several ways to access that money:

• A statement credit, where you apply your rewards directly to your credit card balance, reducing the amount you owe.
• A direct deposit, where you transfer your cash back to a linked checking or savings account.
• A check, mailed to your address, which you can deposit in your checking account and use as cash.
• A gift card to a store like Amazon, Target, Walmart, or Best Buy, that you can use for a big purchase in place of cash.

Most card issuers let you redeem rewards through their app or website. Some cards have minimum redemption thresholds, so you may need to accumulate a certain amount before you can cash out.

Take a cash advance

A credit card cash advance is when you withdraw cash from your credit card at an ATM or bank teller. Rather than taking cash out from your checking account, you’re borrowing money against your credit limit.

But it’s wise to use this method sparingly, because it often comes with hefty fees and interest. You may be charged a flat fee or a percentage of the cash advance (typically 3% to 5%), depending on your card issuer’s terms. 

The interest rate on a cash advance is usually higher than on a regular credit card purchase. And there’s no grace period, which means interest starts accruing as soon as you withdraw the funds.

A credit card cash advance is a type of short-term loan from your credit card issuer. Instead of using your card to buy something, you’re borrowing cash directly against your available credit.

You can get a cash advance in several ways. The most common is withdrawing money from an ATM using your credit card and PIN. You can also: 

• Visit a bank and request cash against your credit line
• Use convenience checks if your issuer sent them to you 
• Request cash back from the register during a transaction, if available

One thing to know: your cash advance limit is usually lower than your overall credit limit. If your credit limit is $5,000, your cash advance limit might only be $1,000 or $1,500. 

You can find your specific limit on your monthly statement or by logging into your account online.

Cash advances can help in a genuine emergency, but the costs add up quickly. Before you head to the ATM, here’s what you should know.

Cash advance fees

Credit card companies typically charge a cash advance fee. This could be a percentage of the amount or a flat fee. On a $500 cash advance with a 5% fee, you’d pay $25 in fees before any interest kicks in.

Some ATMs charge their own fees on top of what your card issuer charges. Between the card fee and the ATM fee, your total upfront costs can exceed $25.

Higher interest rates with no grace period

Cash advances often carry a higher APR than regular purchases. The average credit card APR for purchases is around 21%, but many cards have cash advance APRs of around 29%.

And, as mentioned above, there’s no grace period. Interest starts building as soon as you withdraw the cash. With regular purchases, you don’t accrue interest until your statement due date, which means you can avoid it by paying off your balance in full. With a cash advance, there’s no way to avoid interest charges.

Cash advance limits

Your cash advance limit is separate from your overall credit limit and typically much smaller. This limits how much cash you can borrow, regardless of how much available credit you have for purchases.

Check your credit card agreement or online account to see your specific limit. Knowing this number in advance can help you avoid a declined transaction when you actually need cash.

Credit score impact

Taking a cash advance won’t directly hurt your credit score – it doesn’t show up as a separate negative mark. However, it does increase your credit utilization, which is the percentage of available credit you’re using.

Credit utilization has a significant effect on your credit score. If you’re already carrying a balance, adding a cash advance can push your utilization even higher, which could potentially lower your score.

These two main methods of getting cash from a credit card work very differently. One puts money in your pocket. The other takes money out. Here’s how they differ.

When you earn cash back rewards, you’re getting paid to spend money you were already going to spend. When you take a cash advance, you’re borrowing money at a high cost.

Tip: If you’re considering a cash advance, explore alternatives first. A personal loan, borrowing from family, or even a paycheck advance through your employer may cost less than the fees and interest on a cash advance.

Getting cash back from your credit card can stretch your budget – as long as you’re earning rewards rather than paying for expensive cash advances.

A few ways to maximize your cash back:

• Match your card to your spending: Compare the best cash-back cards to find one with rewards categories that fit how you actually spend money.
• Pay your balance in full: Credit card interest charges can quickly eat into any rewards you earn.
• Redeem regularly: Check your rewards balance and cash out before points expire.
• Skip the cash advance: Unless it’s a genuine emergency with no other options, the costs rarely make sense.

Building good credit habits opens doors to better rewards cards over time. If you’re working to establish or rebuild your credit, a secured credit card like the Chime Visa® Credit Card™ can help you build a positive payment history while you work toward cards with stronger rewards programs.