5 Ways To Withdraw Money From Your Credit Card
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Last updated 04/22/2024 by
Benjamin LockeEdited by
Summary:
We explore various methods to withdraw cash from your credit card, including using ATMs, convenience checks, balance transfers, purchasing cryptocurrency, and utilizing P2P payment services. While these methods provide flexibility, they often come with high fees and interest rates, making it important to consider the costs and terms before proceeding.
Finding yourself in urgent need of cash without access to your bank account or debit card can be incredibly stressful. Whether you’re facing an immediate financial demand within the hour or need to secure funds within the next day, the situation requires a swift and effective solution. In such moments, a credit card might be your only available resource. But how can you convert this piece of plastic into the cash you urgently need? Here’s what you need to know.
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What’s the easiest way to withdraw money from your credit card?
The easiest way to withdraw money from your credit card is by using it at an ATM with your PIN or through cash advance options provided by your bank. However, you can also consider using convenience checks issued by your credit card company, purchasing cryptocurrency as a means to convert credit to cash, utilizing peer-to-peer (P2P) payment services to send money to someone who can withdraw it for you, or executing a balance transfer to your bank account if your credit card issuer allows it
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Is it smart to withdraw money from your credit card?
In most cases, cash advances allow you to get cash but have lower limits than your overall credit limit and come with high fees. For instance, if your credit limit is $10,000, your cash advance limit might only be $3,000. Taking a $1,000 cash advance would reduce your available credit to $9,000 and your cash advance limit to $2,000.
ProTip
“In withdrawing cash from a credit card, individuals should consider the convenience, costs, and potential consequences. Options like ATM cash advances, convenience checks, and cash back at point-of-sale transactions differ in fees, interest rates, and ease of use. To avoid excessive charges and negative credit impacts, it’s crucial to be cautious, minimize cash withdrawals, and repay promptly to avoid accruing interest.”– Bhavin Swadas, Founder & CEO – Coupon Stroller
Tip 1: How to withdraw cash from an ATM with your credit card
Withdrawing cash using your credit card at an ATM is a straightforward process but not without its costs. If you have a PIN set up for your credit card, you can use it at an ATM just as you would a debit card. To set up a PIN, contact your credit card’s customer service. At the ATM, after inserting your credit card and entering your PIN, choose the “credit” option, then specify the withdrawal amount. Be mindful of transaction fees the ATM may display, and remember, these do not include the potentially higher fees your credit card may charge, such as cash advance APRs or one-time fees.
Steps to withdraw cash using a credit card at an ATM
Using a credit card at an ATM typically incurs high fees and interest rates. Follow these steps carefully to withdraw cash:
- Check your account: Know your cash advance limit by reviewing your credit card statement. It’s often much lower than your credit limit.
- Set up a PIN: If you don’t have a PIN, contact your credit card issuer to create one.
- Find a compatible ATM: Use ATMs that accept your card’s network (Visa, Mastercard, etc.).
- Insert your credit card and enter your PIN: Follow the ATM prompts to initiate a transaction.
- Select the transaction type: Choose “cash withdrawal” or “cash advance.”
- Choose account type: Select “credit” if prompted. Some ATMs might not ask for this.
- Enter withdrawal amount: Make sure it doesn’t exceed your cash advance limit.
- Acknowledge fees: Note any ATM transaction fees, plus your card’s cash advance fees and APR.
- Complete the transaction: Confirm your withdrawal, wait for the ATM to process it, and then collect your cash and card.
Cost-effective alternatives
The primary risk of withdrawing cash from a credit card at an ATM lies in the high costs involved. Cash advances come with high APRs from the day of the transaction, plus additional ATM and one-time fees. This can make it one of the most expensive ways to access cash. Here are some alternatives to consider.
- Using a Debit Card: If possible, use a debit card linked to your checking account for cash withdrawals to avoid the high fees and interest rates associated with credit card cash advances.
- Personal Loans: For larger sums, a personal loan might offer lower interest rates compared to credit card cash advances.
- Credit Card Cash Back: Some credit cards offer cash back on purchases, which can be a more cost-effective way to access funds without incurring high fees.
- Emergency Savings: Building and using an emergency savings fund can prevent the need for costly cash advances in the future.
SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more
Community reviews are used to determine product recommendation ratings, but these ratings are not influenced by partner compensation. SuperMoney checks for and removes fake reviews when identified.
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Withdrawing cash from a credit card should be a last resort due to the high costs involved. Always consider alternative options that may be more economical and less impactful on your financial health.
Tip 2: Getting cash back from a credit card at stores
Getting cash back directly from a credit card at a store is not widely available, but there are a couple of methods:
| Method | Description | Limit/Fees |
|---|---|---|
| Cash Over at the Register | Some credit cards allow you to get extra cash at checkout. For example, with the Discover Cash Back card, the payment terminal may offer you the option to receive cash back. | Up to $120 every 24 hours |
| Buying Cash Equivalents | You can use your credit card to buy items that act like cash, such as Visa or Mastercard gift cards, and sometimes money orders. | Varies, usually involves fees |
Tip 3: Using a balance transfer for cash
Balance transfers are typically used to move debt from one credit card to another, aiming to consolidate debt and potentially reduce monthly payments. For instance, if you have two credit cards each with a $2,500 balance, you could transfer the total $5,000 debt onto one card.
However, you can also use a balance transfer to get cash directly into your bank account. This is done through a balance transfer check provided by your credit card issuer. Simply fill out the check and deposit it into your bank account to access the funds.
Tip 4: Use a convenience check.
How to use convenience checks
Convenience checks are checks provided by your credit card issuer that you can write against your credit line. Here’s how to use them:
- Check Availability: Not all credit card issuers provide convenience checks, so you’ll need to check with yours.
- Write a Check: Write the check to yourself and deposit it into your bank account, just like a regular check.
- Consider the Costs: Using a convenience check is similar to getting a cash advance, so it comes with high fees and interest rates that start accruing immediately.
Tip 5: Purchasing cryptocurrency
Some credit cards allow you to purchase cryptocurrency directly from exchanges. This method is a bit more indirect but can be used to convert credit into cash:
- Find a Crypto Exchange: Look for a cryptocurrency exchange that accepts credit card purchases.
- Buy Cryptocurrency: Use your credit card to buy cryptocurrency.
- Sell for Cash: Sell the cryptocurrency for cash, which can then be withdrawn to your bank account.
- Be Cautious: This method involves several risks, including transaction fees, the volatility of cryptocurrency prices, and the possibility that your credit card issuer treats the purchase as a cash advance, accruing high fees and interest.
While it might seem like an innovative method, using your credit card to purchase cryptocurrency carries significant considerations. Many credit card companies and cryptocurrency exchanges either restrict or advise against this practice. The reasons for this caution include the high risk and volatility inherent in cryptocurrency markets. Moreover, transactions of this nature are frequently categorized as cash advances by credit card issuers. This classification means that from the moment of purchase, you’re likely to incur high interest rates and additional cash advance fees.
Given these factors, it’s crucial to carefully review your credit card’s terms and conditions before proceeding with such a transaction. Understanding the financial implications, including any immediate fees and interest charges, can help you make a more informed decision. For those considering cryptocurrency as a means to access cash, exploring alternative and less costly options may prove to be a wiser financial strategy.
Tip 6: Use a P2P payment service.
How to get cash from peer-to-peer (P2P) payment services
Platforms like Venmo and PayPal offer a way to get cash by sending money. You can use your credit card to send money to someone you trust, and they can then deposit the funds into their bank account. This method might even earn you rewards on your credit card.
Be aware of the following:
- You’ll likely incur a fee of about 3% for sending money with your credit card.
- Some transactions might be classified as cash advances by your credit card issuer, although not all are.
- American Express offers a specific service, Amex Send, which allows free transfers to anyone with a Venmo or PayPal account. However, this will be usually be treated like a purchase and accrue interest (and you won’t earn rewards).
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FAQ
Can I withdraw cash from my credit card without a PIN?
No, withdrawing cash from an ATM using your credit card typically requires a PIN. If you don’t have a PIN, you can request one from your credit card issuer. Alternatively, you can use convenience checks or balance transfers if you need cash without using an ATM.
Does withdrawing cash from a credit card affect my credit score?
Yes, withdrawing cash from your credit card can affect your credit score. This is because it increases your credit utilization ratio, which is a key factor in credit scoring. High utilization can signal to lenders that you’re over-reliant on credit, potentially lowering your score.
Are there any credit cards that offer lower fees for cash advances?
While most credit cards charge high fees and interest rates for cash advances, some cards are designed with lower cash advance fees or promotional rates. It’s important to read the terms and conditions or contact the card issuer for details. However, even with lower fees, interest typically starts accruing immediately.
Can I use my credit card to withdraw cash from any ATM?
You can use your credit card to withdraw cash from most ATMs that accept your card’s network, such as Visa or Mastercard. However, not all ATMs may be compatible, and there may be additional fees associated with using ATMs outside your credit card issuer’s network. Always check for any network logos on the ATM to ensure compatibility.
Key takeaways
- Using an ATM with a PIN is the most straightforward method to withdraw cash from your credit card.
- Convenience checks and balance transfers can directly deposit cash into your bank account but come with high fees and interest.
- Purchasing cryptocurrency and using P2P payment services are innovative ways to access cash, though they carry risks and fees.
- Understanding the costs and limitations of each method is crucial to manage finances effectively and avoid unnecessary debt.
SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more
Community reviews are used to determine product recommendation ratings, but these ratings are not influenced by partner compensation. SuperMoney checks for and removes fake reviews when identified.
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