How to Use Credit Card at ATM -

Is it Possible to get cash using Credit Card at ATM ?

Many individuals are familiar with using credit cards for purchases, but fewer are aware of the process of obtaining cash from a credit card at ATM. While it’s possible to get a cash advance from an ATM using your credit card, it’s generally not recommended unless absolutely necessary.

key notes:

Around 20-30% APR
Typically around 3% to 5% of the total amount withdrawn.
Impact on Credit Scores:

Cash Advance Service :

Cash advances incur extra fees and often carry high interest rates, making them a costly option. It’s advisable to explore alternatives before resorting to a cash advance. Below, we’ll delve into how cash advances function, the steps to obtain cash from your credit card at ATM, and alternative options to consider before opting for a cash advance.

A cash advance is a service offered by credit card issuers that allows cardholders to withdraw cash from their credit card account. This can typically be done through an ATM or by visiting a bank or financial institution that accepts credit cards for cash advances. Unlike regular credit card purchases, where you’re buying goods or services, a cash advance provides you with actual cash that you can use for various purposes.

The amount withdrawn becomes part of your credit card balance, subject to the card’s terms and conditions.

While convenient for accessing funds when needed, obtaining a cash advance from a credit card at ATM comes with costs. Expect to incur a cash advance fee at the ATM, along with a higher interest rate on the withdrawn cash. Cash advance interest rates typically range between 20-30% APR, and unlike regular purchases, there’s no grace period during which you can avoid interest charges. The cash advance APR applies immediately upon withdrawal.

Learn more about : 2.5% Cash Back Credit Card

Several drawbacks Credit Card at ATM :

However, cash advances come with several drawbacks Credit Card at ATM :

High Fees: Credit card companies often charge a fee for cash advances, typically a percentage of the amount withdrawn or a flat fee, whichever is higher.

High Interest Rates: Interest begins accruing immediately on cash advances, often at a higher rate than for purchases. Unlike regular purchases, which may have a grace period before interest accrues, cash advances start accumulating interest from the moment the transaction is made.
- For instance, the Blue Cash Preferred® Card from American Express, known for its excellent rewards for grocery shopping and typically reserved for those with good or excellent credit, carries a variable APR ranging from 19.24% to 29.99% on purchases, with cash advances subject to a fixed 29.99% APR. On the other hand, the Capital One QuicksilverOne Cash Rewards Credit Card, suitable for applicants with fair to average credit seeking cash back rewards, maintains a flat 30.74% APR for both purchases and cash advances.

No Grace Period: Unlike regular credit card purchases, which may offer a grace period before interest accrues if the balance is paid in full by the due date, cash advances generally have no grace period. This means you’ll start accruing interest on the cash advance amount immediately, regardless of when you pay it back.

Impact on Credit Scores: Taking out a cash advance can lower your available credit, potentially leading to an increase in your credit utilization rate. If the balance isn’t paid off promptly and interest begins accruing immediately, your credit score may decrease. Lenders may also view you as a higher credit risk because cash advances are often sought when there’s insufficient funds in your checking account to cover expenses requiring cash.

Cash Advance Fees: Each time you use your credit card at ATM to request a cash advance, your bank will charge you a cash advance fee. Given that ATM fees are already high, paying an additional cash advance fee further adds to the expense. The exact fee varies by issuer and can be found in the terms and conditions of your credit card.Credit card issuers often charge a fee for each cash advance requested, typically around 3% to 5% of the total amount withdrawn.

Because of these drawbacks, cash advances should typically be used only as a last resort in emergency situations. It’s generally better to explore other options for accessing funds, such as using a debit card, taking out a personal loan, or borrowing from a friend or family member, before resorting to a cash advance from a credit card.

How to Use Credit Card at ATM to Withdraw Money

To withdraw money from a credit card at an ATM, follow these steps:

Insert Your Credit Card: Insert your credit card into the ATM card slot.

Enter Your Credit Card PIN: Enter the Personal Identification Number (PIN) associated with your credit card.

Select Cash Withdrawal Option: Choose the “cash withdrawal” or “cash advance” option on the ATM screen.

Choose Credit Option (if necessary): If prompted, select the “credit” option. Some ATMs may ask you to choose between checking, debit, or credit accounts.

Enter Withdrawal Amount: Enter the amount of cash you wish to withdraw from your credit card.

Acknowledge Fees: Acknowledge any fees associated with the transaction. These may include cash advance fees charged by your credit card issuer and any ATM fees.

Complete Transaction: Confirm the transaction and wait for the ATM to process it.

Collect Your Cash: Once the transaction is approved, the ATM will dispense the requested amount of cash. Collect your cash and any receipts.

It’s important to be aware of the fees and interest rates associated with cash advances from credit cards. These transactions made through Credit Card at ATMs often incur higher fees and interest rates compared to regular credit card purchases. Therefore, it’s wise to only use a cash advance from a credit card as a last resort in emergencies.

Consider Alternatives Ways to Withdraw Money:

Given the high interest rates associated with withdrawing money from a credit card at ATM, we recommend exploring alternative methods unless you are facing an emergency situation.

ATM Withdrawals with Debit Card: If you have a debit card, you can withdraw cash from an ATM without incurring a cash advance fee, provided you use an ATM within your bank’s network. Additionally, you can visit a bank branch and cash a check in person.

Peer-to-Peer Payment Apps: Explore peer-to-peer payment apps like Venmo or Square Cash (Cash App), which allow you to send money to friends and family. This can be a convenient way to transfer money without needing cash. Be mindful that these apps may charge a fee for credit card transactions, and some credit card issuers may classify peer-to-peer payments as cash advances.

Personal Loans: If you need cash quickly but want to avoid the high costs of a cash advance, consider a personal loan. As of March 13, 2024, the average interest rate for personal loans is 12.10%. Personal loans provide a lump sum of money that can be used for various expenses, such as rent or medical bills.

Bottom Line:

In conclusion, always view a cash advance as a last resort. Exhaust all other options, such as using a debit card, payment apps, or obtaining a personal loan, before resorting to a cash advance from a credit card at ATM. Cash advances typically incur higher interest rates than regular purchases, so consider the financial implications if you’re unable to pay off your account balance promptly.