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Credit cards offer a convenient way to pay for goods and services. However, did you know that you can also get cash from a credit card? In this guide, we will explore the various methods of getting cash from your credit card, including their pros and cons.
What is a cash advance?
A cash advance is a feature offered by credit card companies that allow cardholders to withdraw cash from an ATM or bank branch. The amount of cash that you can withdraw will depend on your credit limit and the terms and conditions of your credit card.
It is possible to use a credit card at an ATM to get a cash advance. However, this should only be done as a last resort, as cash advances come with additional fees and high-interest rates.
When you request a cash advance, you are essentially borrowing money from your credit card company. This borrowed amount is then added to your credit card balance and subject to interest charges, typically at a much higher rate than regular purchases. Additionally, cash advances often come with a fee that is charged as a percentage of the amount withdrawn. These fees and interest rates can quickly add up, making cash advances a very expensive way to access cash.
If you need to access cash, there are other alternatives to consider before resorting to a cash advance. One option is to use a debit card at an ATM, as this typically does not incur the same fees and high-interest rates as a cash advance. You could also consider applying for a personal loan, which may have lower interest rates and fees than a cash advance.
How to get cash from a credit card
There are several ways to get cash from your credit card:
- Cash advance from an ATM: This is the most common way to get cash from a credit card. To withdraw cash from an ATM, you will need to have a PIN (personal identification number) for your credit card. Be aware that cash advances usually come with high fees and interest rates.
- Cash advance from a bank: You can also get cash from your credit card by visiting a bank and requesting a cash advance. This method usually has lower fees than getting a cash advance from an ATM.
- Balance transfer to a bank account: Another option is to transfer the balance from your credit card to a bank account. This method allows you to get cash from your credit card without paying high fees and interest rates. However, you will need to pay a balance transfer fee, which is usually a percentage of the transferred amount.
- Convenience checks: Some credit card companies offer convenience checks, which are similar to regular checks. You can use these checks to withdraw cash from your credit card. However, be aware that convenience checks also come with fees and high-interest rates.
How to use a credit card at an ATM to withdraw money
First, insert your credit card into the ATM. You’ll then be prompted to enter your credit card PIN, which is a personal identification number you set up when you received your credit card. Make sure you enter your PIN carefully and keep it confidential.
Next, select the “cash withdrawal” or “cash advance” option from the ATM menu. This option may be labeled differently depending on the type of ATM you’re using, but it should be easy to spot on the screen.
After selecting the cash withdrawal option, you may be asked to choose between “checking,” “debit,” or “credit” account types. In this case, select the “credit” option.
Then, enter the amount of cash you’d like to withdraw. Keep in mind that there may be a limit on how much cash you can withdraw in a single transaction, so check with your credit card issuer or the ATM provider to find out what the limit is.
Before the transaction is complete, you’ll be asked to acknowledge that you accept any fees associated with the cash advance. These fees can include a cash advance fee charged by your credit card issuer and any ATM fees charged by the ATM provider. Make sure you read and understand the fees before you accept them.
Once you’ve accepted the fees, complete the transaction and collect your cash. Be sure to take your credit card from the ATM and any receipts that may have been printed.
Using a credit card at an ATM to withdraw cash can be a convenient option, but it’s important to remember that cash advances can be expensive due to the fees involved. It’s always a good idea to explore other options, such as a personal loan or a line of credit, before resorting to a cash advance.
Pros and cons of getting cash from a credit card at the ATM
Before you decide to get cash from your credit card, it’s important to understand the pros and cons.
- Quick and convenient: One of the biggest advantages of getting cash from a credit card at an ATM is its speed and convenience. If you need cash urgently, you can simply walk up to an ATM, insert your credit card, enter your PIN, and withdraw the cash you need within a matter of minutes. This can be especially helpful if you find yourself in a situation where you don’t have access to other forms of payment or need cash immediately.
- No separate loan or credit line required: Unlike other types of loans or lines of credit, you don’t need to apply separately for a cash advance from your credit card. You simply need to have an available credit limit on your card and be able to access an ATM. This can make getting cash much easier and quicker than other forms of borrowing.
- Helps cover unexpected expenses: Another advantage of getting cash from a credit card at the ATM is that it can help you cover unexpected expenses that may arise. For example, if you have a sudden car repair or medical bill, you can use your credit card to withdraw cash and pay for the expenses. This can be especially helpful if you don’t have enough cash on hand or don’t want to wait for a loan to be approved.
However, it’s important to keep in mind that there are also some potential downsides to getting cash from a credit card at an ATM. These can include high fees and interest rates, which can make cash advances an expensive way to borrow money. Additionally, cash advances may also impact your credit score negatively if you don’t pay them back on time. It’s important to weigh the pros and cons carefully before deciding to take a cash advance from your credit card.
- Cash advance fees: When you use your credit card at an ATM to withdraw cash, your bank will charge you a cash advance fee, which is an additional expense on top of the already high ATM fees. The fee amount varies by issuer, so it’s important to check your card’s terms and conditions before taking out a cash advance.
- High interest rates: Cash advance interest rates are typically much higher than the interest rate for regular purchases on your credit card. Additionally, there is no grace period for cash advances, so interest begins to accrue immediately. This can quickly add up and increase your debt, especially if you carry a balance on your credit card.
- Negative impact on credit scores: Taking out a cash advance can lower your available credit, which can negatively impact your credit score. If you don’t pay off the balance and interest starts accruing, your credit utilization rate will increase, and your credit score may decrease. Additionally, lenders may view you as a higher credit risk since cash advances are often taken out when you don’t have enough money in your checking account to cover an expense.
While there may be situations where you need to take out a cash advance, it’s important to develop a plan to pay it off as quickly as possible to avoid high fees and interest rates. Additionally, be aware of the potential negative impact on your credit score and only use cash advances as a last resort.
Alternatives to a cash advance
If you need cash quickly but don’t want to pay the high fees associated with a cash advance, there are a few alternatives to consider:
ATM debit card withdrawal
If you have a debit card, you can withdraw money from an ATM without having to pay a cash advance fee, as long as you use an ATM in your bank’s network. This is a quick and convenient option, especially if you need cash on the spot.
Another option is to visit a bank branch and cash a check in person. This can be a good choice if you have a check on hand and don’t want to pay a fee to cash it at a check-cashing store.
Peer-to-peer payment apps
Peer-to-peer payment apps like Venmo or Square Cash (also known as the Cash App) allow you to send money to friends and family. If you were hoping to get cash to pay back a friend or relative, you might be able to use one of these apps instead. However, be aware that they charge a 3% fee for credit card transactions and some credit card issuers code peer-to-peer payments as cash advances.
If you need cash quickly but don’t want to deal with the high cost of a cash advance, a personal loan can get you the money you need at a much more reasonable interest rate. When you take out a personal loan, you’ll receive a lump sum of money that you can use to pay off bills or cover other expenses that require cash.
It is important to carefully consider your options and choose the one that best fits your needs and budget.
Borrow money from a friend or family member
One option for obtaining money quickly is to borrow from a friend or family member. While this can be risky, as it can strain relationships if not handled properly, it can also be a good solution if the borrower is confident they can repay the loan on time.
Compared to taking out a cash advance, borrowing from someone you know may be easier and less expensive. Cash advances often come with high fees and interest rates, which can make them a costly way to access money. In contrast, borrowing from a friend or family member may not come with any fees or interest, or they may be more reasonable than what a lender would charge.
How can I get cash from a credit card without charges?
If you need to withdraw cash from your credit card and want to avoid as many fees as possible, here are a few things you can try:
- Look for a credit card with no cash advance fees: Some credit cards may not charge a fee for cash advances. If you can find such a card, it can help you save on fees.
- Pay off the cash advance on the same day: If you have to withdraw cash using your credit card, try to pay off the balance as soon as possible. This will help minimize the amount of interest you have to pay.
- Consider using a balance transfer credit card: Another option is to use a balance transfer credit card to transfer the cash advance balance to another credit card with a lower interest rate. This can help you save on interest charges.
- Avoid using your credit card for cash advances if possible: Remember that cash advances can be very expensive, so it’s best to avoid using your credit card for cash if you can. If you need cash, consider other options such as a personal loan or a line of credit.
How can I get cash off my credit card without a PIN?
If you’re looking to withdraw cash from your credit card but don’t have a PIN, there are a few options available to you. One of the most common ways to do this is by visiting a bank branch of the card issuer and requesting a cash advance from a teller. The teller will typically require some form of identification, such as a driver’s license or passport, to verify your identity before processing the cash advance.
Another option is to request a check or bank transfer from your card issuer. However, the specific options available to you will depend on your issuer, so you should call the number on the back of your card to inquire about your options.
Can you get cash from a store credit card?
It is typically only possible to obtain cash from a store credit card if the card offers cash advances. Some store credit cards do not have this option, as they are designed solely for use at the specific store they are associated with.
However, if the store credit card is a co-branded card, meaning it is associated with a major credit card network like Visa or Mastercard, it may offer cash advance options. These types of cards can be used for purchases outside of the co-branding store and may have a cash advance feature that allows you to withdraw cash from an ATM or bank using your credit line.
The bottom line
Getting cash from a credit card can be a useful tool in certain situations. However, it’s important to understand the fees and interest rates associated with cash advances. If you do decide to get cash from your credit card, make sure to pay it off as soon as possible to avoid high-interest charges.