Personal Finance

Can You Get Cash Back With a Credit Card? Cash Back vs. Cash Advances

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When choosing a credit card, there are many factors to take into consideration, including interest rates, annual fees, your personal spending habits, and the rewards it offers. You may also wonder if you can get cash back with a credit card. The short answer? Absolutely — some credit cards offer cash back options (though not all).

Two of the key ways you can get cash back from a credit card: a cash advance or cash back rewards (though it’s important to note that cash back rewards don’t always directly translate to “cash” or “dollars”). Nevertheless, one of the best perks that credit cards offer is cash back rewards, with different types of rewards structures to consider — from flat rate and tiered rewards to a welcome bonus up-front.

Let’s explore a few helpful features, lucrative perks, and how to get cash back on your credit card so you can start reaping the benefits.

Can You Take Cash Out of a Credit Card?

First, let’s start with the basics. Can you withdraw cash from a credit card as you would with a debit card? Not exactly, but you can take out a cash advance from a credit card.

From there, it’s important to understand the difference between cash advances and cash back rewards. While they sound similar, they are actually quite different. A cash advance is essentially a small loan you take against your existing credit with a bank, whereas cash back rewards are dollars or points that you earn by using your credit card to make a purchase. 

How To Get a Cash Advance on a Credit Card

Can you take cash out of a credit card? Yes. Many banks offer the ability for cardholders to take out a cash advance on your credit card. In doing so, you essentially borrow a loan against your full credit with a lender. 

Pros

Taking a cash advance on your credit card is a quick, easy way to access cash, especially when you need it urgently.

There are a few key ways to take a cash advance from your credit card: 

  • Convenience check issued by your bank
  • In person at a branch
  • Using your credit card in lieu of a debit card at an ATM

How much of a cash advance you can take out of your credit card depends on your bank and how much you already borrowed against your credit. Options vary by bank and by credit card type, particularly as not all banks have physical branches. Generally speaking, cash advances are limited to a certain percentage of your credit limit. From there, the sum you choose to borrow appears on your next credit card statement. It’s a convenient, straightforward transaction.

Cons

While taking a cash advance from a credit card is simple and efficient, the convenience can come at a cost. Here are some of the downfalls of taking a cash advance from a credit card:

  • Additional Fees: A cash advance may be subject to additional fees — typically three to five percent — so it’s important to check the fine print on your bank’s terms and conditions.
  • Immediate Interest Accrual: Just like purchases you make on your credit card, a cash advance is also liable for interest. The difference is that interest on cash advances begins to accrue immediately, from the day you take the cash advance.
  • Impact on Credit Score: A cash advance can also impact your credit score if you don’t pay it back right away. This is mainly because a cash advance still applies as a fraction of your overall credit utilization rate, which can account for up to 30 percent of your credit score. If that sum sits on your credit card statement for a month or longer, it’s possible you could see a negative impact on your credit score. 

Cash Back With a Credit Card at a Register

There’s one place where your cash back options are more limited, and that’s at the register at retailers and grocery stores. So can you get cash back with a credit card at a register? For the most part, no. Most credit cards do not offer the ability to get cash back at a register, though there are some exceptions. Otherwise, you’ll need a debit card.

When using a debit card to make a purchase at a retail store, you’re asked to select whether you want cash back, and in which dollar amount. In doing so, you essentially use your debit card to make a withdrawal as you would at an ATM at the same time you complete your purchase. 

Credit Card Rewards: How To Earn Cash Back 

So what is cash back on a credit card, exactly, and where can you get cash back with a credit card? There are three main credit card rewards structures: points, mileage, and cash back (as well as other lesser-known perks).

  • Points: Points earned based on a specified rate per dollar spent, most commonly redeemable for gift cards, a statement credit, travel, or cash.
  • Mileage: Same basic principle as points-based cards, with points redeemable for booking travel.
  • Cash Back: Dollars earned instead of points, set at a specified rate per dollar spent.

For points or mileage credit cards, the value of a point earned may differ depending on how you choose to redeem your points, which can lead to cardholder confusion. When redeeming points for travel, for example, your points may be more valuable than when redeeming your points for a statement credit, gift card, or another redemption option. 

Thankfully, cards with cash back options have a much simpler, straightforward reward plan than points or mileage credit cards.

Cash Back Rewards: Which Structure Is Best for You?

One of the best perks that credit cards offer is cash back rewards, and there are a few different types of rewards to choose from:

  • Flat Rate
  • Tiered Rate
  • Rotating

The best cash back rewards card for you will ultimately depend on your personal lifestyle and spending habits.

Flat Rate on All Purchases

Flat rate cash back credit cards are the most straightforward of all options. With a flat rate, you receive a fixed percentage of cash back on every purchase, regardless of the type of purchase made (gas, groceries, retail, etc.). 

For example, if you spend $100 and your cash back reward rate is three percent, you receive $3 back on the transaction. From there, cash back rewards include redemption options such as a statement credit, check, or bank deposit, though your lender may make other options available. 

Tiered Rate on Purchases

Tiered cash back rewards cards are slightly more complex than flat-rate cards, but are still relatively straightforward. The most common tiered cash back rewards include major categories such as dining, groceries, gas, and entertainment. Some cards offer a higher percentage cash back reward for certain categories, and a lower rate for others. 

Rotating Rewards

With rotating categories, credit card companies change which categories receive a higher rate of cash back on a periodic basis. The benefit to rotating categories is that they tend to offer some of the highest cash rewards rates: up to six percent for most cards. It can be challenging to make the most of your card’s potential, however, because the categories change so frequently. 

Your Best Bet

Ultimately, the best way to get your hands on cash quickly — and without associated interest or penalties — is by using a debit card to get cash back at certain retailers, or simply at an ATM. In most cases, getting cash back at a register with a credit card is not possible at a retail store, and taking a cash advance through your credit card can be costly. 

If you’re looking to earn cash back from your monthly purchases, however, choosing a credit card with a rewards structure that meets your spending habits may be your best bet. 

Looking to pay off your existing credit card debt? Use our credit card payoff calculator to estimate your payoff timeline.

Sourcing

  • Credit cards that do offer cash back at a register. Discover (2022).
  • Confusion caused by varying value of points at redemption. CNBC (June 2022).  
  • How flat-rate credit cards work. U.S. News & World Report (October 2022). 
  • How rotating rewards work. Time (June 2022).  
  • Rotating rewards offer up to 6 percent back. U.S. News & World Report (October 2022).

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