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How to Withdraw Money from a Credit Card - Cash Advances Explained

Key Takeaways
  • Consumers can use their credit cards to get cash out of an ATM provided they have a PIN number.
  • Credit card issuers often send out credit card convenience checks as well, which consumers can use to write themselves a check from their line of credit.
  • Cash advances are expensive to use due to the higher rates they are charged and the added fees consumers must pay.
  • There are several alternatives to consider in place of a cash advance. For example, consumers can use their credit card to buy a prepaid debit card, or they can send themselves money via various apps like Venmo or Cash App.

If your goal is getting cash from a credit card, your main option is taking out a cash advance. You can get a cash advance on a credit card with the help of any ATM, yet you can also use credit card convenience checks to get cash out.

Either way, you should know that there are additional charges and fees that come into play when you utilize your credit limit to get cash in hand. Unfortunately, these added finance charges can make each cash advance cost considerably more than people realize.

Before you take out a cash advance, you should know about the pros and cons of utilizing this strategy. In the meantime, you should learn about cash advance alternatives that can help you access the money you need.

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What is a cash advance on a credit card?

The term “cash advance” is used to describe any time you use a credit card to get access to cash or cash alternatives. For example, the Consumer Financial Protection Bureau (CFPB) says a cash advance can include using a credit card to get cash from a bank, using a credit card to make a wire transfer, or using credit to buy travelers checks, money orders, or foreign currency.

That said, the most common methods of getting a cash advance involve using a credit card to get cash from an ATM or relying on credit card convenience checks.

In either case, the consumer gets access to cash, and the amount of their cash advance is deducted from the line of credit on their credit card. From there, they are required to repay the cash advance on their credit card just as if they had used their card to make a purchase. However, there are added fees involved in each cash advance transaction that takes place, which can make using a credit card this way an expensive proposition.

How to get cash from a credit card at an ATM

Generally speaking, you’ll need to have a PIN number for your credit card to get cash from an ATM. It’s possible your credit card issuer sent you a PIN when you received the paperwork for your new card. However, you may be able to set up a PIN for your credit card online or over the phone.

Once you have a PIN for your credit card, you can use it to get cash out of an ATM with the following steps:

  1. Insert your credit card into any ATM of your choosing
  2. Follow the prompts that ask you to enter your credit card PIN
  3. Select the option that says “cash withdrawal” or “cash advance”
  4. Select the “credit” option, if necessary
  5. Enter the amount of cash you’d like to withdraw from your credit card account
  6. Acknowledge fees listed for the transaction
  7. Complete the cash advance and accept your cash from the ATM

What to consider before taking out a cash advance

The steps outlined above make getting a cash advance look as easy as pie, but you should know about the hidden challenges and risks associated with using a credit card to get cash out. The fact is, racking up a cash advance balance can lead to considerable interest charges that can get dramatically worse over time if you don’t pay your card off completely. Not only that, but each credit card cash withdrawal has extra fees attached.

What should you know before you treat your credit card like an ATM card? Consider the following:

Higher interest rates

Credit card issuers charge a cash advance APR on each cash advance balance that is higher than the APR for purchases. These added finance charges make taking cash out of an ATM an expensive habit to get into, and one you should probably avoid if you can help it.

Extra fees and charges

Also be aware that each card issuer will charge an upfront cash advance fee each time you take out cash from your credit line. This fee typically tacks on 5% to each cash advance transaction, or $5 in fees for each $100 withdrawal.

You will also be charged an ATM fee to get cash back from an ATM, and the amount of these fees can vary widely.

No grace period

Cash advances are not afforded the same repayment terms from the credit card company as you’ll get with regular charges to your card. In fact, you don’t get a grace period when you use a credit card to get a cash advance, so interest begins accruing on your cash advance balance right away.

Impact to your credit score

Finally, you should know that increasing your credit card balance can have a considerable impact on your credit score and your overall creditworthiness. Generally speaking, you should strive to keep your credit card balance below 30% of your available credit for the best results.

Cash advance alternatives

If you are a cardmember who is hoping to get access to cash without having to drain your bank account or pay exorbitant fees for a cash advance, there are several alternatives to consider.

Prepaid debit cards

One option involves using your credit card to purchase a prepaid debit card. This strategy can help you access a card you can use for online and in-person charges without the added fees and charges of a cash advance.

If you go with this option, you should keep in mind that prepaid debit cards often come with added fees of their own, and it’s often harder to rent a car with a debit card. Also note that you could just as easily use your credit card for purchases, which also helps you avoid cash advance fees and as well as a cash advance APR on the money you access.

Online payment apps

Several online payment apps let you transfer money to yourself (or to others) that is ultimately withdrawn from your credit line. Options include CashApp, PayPal, and Venmo to name a few.

Just remember that you’ll pay a transaction fee if you utilize this option. For example, Venmo charges a 3% fee to send money with a credit card and so does CashApp. In the meantime, PayPal charges a flat fee of $.30 plus 2.90% to send cash with a credit card.

Borrow from family or friends

Individuals who need to access cash can always reach out to family members or friends for help. That said, it’s smart to agree to a repayment plan in writing, and to borrow responsibly and repay every dollar owed.

Personal loan

Borrowers with good credit can also consider taking out a personal loan. These loans let consumers borrow the cash they need with fixed interest rates, fixed monthly payments, and fixed repayment schedules that will never change.

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FAQ: How to get cash from a credit card

Why would someone need to take out a cash advance?

Taking out a cash advance is common in emergency situations where consumers need cash quickly and have few other options at their disposal.

Which cash advance alternative is best?

Borrowing money from family and friends can help you get the cash you need without paying exorbitant fees and interest charges.

How can I take out a cash advance with the least amount of fees?

Look for credit cards that have the lowest cash advance fee you can find. There are also a handful of credit cards that do not charge added fees for a cash advance.

Is there any benefit to taking a cash advance?

The main cardholder benefit of a credit card cash advance is the fact it can put cash in your hand when limited options are available.

Does buying cryptocurrency with a credit card count as a cash advance?

Each issuer has the right to handle purchases of cryptocurrency differently. However, the majority of card issuers treat crypto purchases as a cash advance.

Do any credit cards not have a cash advance fee?

There are several cash advance credit cards that don’t charge fees for a cash withdrawal from an ATM. Popular options include the PenFed Platinum Rewards Visa Signature® Card and the Prosper® Card.

Holly D. Johnson
Holly D. Johnson Finance Expert

Holly D. Johnson is an award-winning personal finance writer who covers topics like insurance, investing, credit and family finance. As a leading voice in the travel and loyalty space, Johnson has traveled with her family to more than 50 countries over the last decade.

The author has also written extensively on the power of household budgeting, and she even co-authored a book on the topic. Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love was originally published in 2017, and it teaches families how to use zero-sum budgeting to reach their financial goals. She is also the co-owner and founder of the family finance and travel website, ClubThrifty.com.

Johnson’s 10+ years of writing have focused on helping families make important financial decisions at each stage of their lives. The author also applies the financial principles she teaches to her own life, and she is currently on track to retire in her late 40’s with her partner. She currently lives in Central Indiana with her husband and children, and she is a regular contributor for Bankrate, CNN, Forbes, U.S. News and World Report Travel and many other notable publications.

* Opinions expressed here are those of the LA Times Compare Cards Team and have not been reviewed or approved by any advertiser or entities included within this content. See our editorial policy for more details.

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