How to withdraw money from a credit card at the ATM

Nowadays, an average American has around 3 credit cards. No wonder! With all the cashback options, insurance packages, and travel rewards available on the market, juggling several cards is rapidly becoming an essential survival skill. But what about the cases when you need none of these and just want to withdraw cash from a credit card? Well, we hope you get money to spare, as that can get really expensive really fast. In this article, we’ll talk about how to cash out a credit card, the costs of doing so, and how to offset them.

Is Withdrawing Cash from a Credit Card a Good Idea?

In banking, this type of withdrawal is called a credit card cash advance. Even though most cards allow customers to withdraw cash at any ATM or bank branch, you should only do so in case of emergency because it’s one of the most expensive ways to get some cash. Besides paying a transaction fee, you’ll also pay a higher-than-usual APR, as credit card cash advances are considered short-term loans.

Where Can You Withdraw Cash from a Credit Card?

There are several ways to cash out a credit card. These include:

• ATMs. All you need is to insert your card and enter its PIN.
• Bank Branches. In this case, you’ll be asked to provide your ID.
• Online Transfers. Some issuers allow clients to transfer money from credit lines to connected checking accounts via the bank’s app or website.
• Convenience Checks. Some credit companies mail customers paper "convenience checks" that can be deposited at the bank to get cash.

Step-by-Step Guide: How to Withdraw Money from a Credit Card

Apart from paying extra, the process is pretty much the same as when using a debit card:

1. Find the nearest ATM in your bank’s network.
2. Put your card into an ATM.
3. Type in the PIN for your credit card.
4. Choose "cash advance" or "cash withdrawal".
5. If the system asks you to choose between credit, debit, or checking, press "credit".
6. Enter how much money you want to cash out.
7. Confirm the transaction.

Understanding the Costs of a Credit Card ATM Cash Withdrawal

Cashing out a credit card is going to cost you extra, so always think twice before doing that. Usually, you’ll have to deal with a higher APR, upfront fees, and currency charges if you’re abroad. Read the terms of your credit card to learn what charges to expect.

Interest Rates and How They Work

Cash advance APR is higher than the normal APR and can often exceed 30%. Cash advances often begin accruing interest immediately, but the exact timing depends on your card’s terms: Discover’s pricing schedule says interest starts on the later of the transaction date or the first day of the billing period in which the advance posts, while the American Express Gold Card starts charging interest on the transaction date.

Cash Advance Fees

Banks always charge extra for withdrawals. For most cards, the fee is either $10 or 3–5% of the withdrawal, depending on which is greater. For example, if you want to withdraw $500 with a 5% fee, you’ll have to pay $25.

Currency Conversion Charges

When withdrawing money abroad, you’ll have to pay a foreign transaction fee. However, some ATMs employ Dynamic Currency Conversion, which allows foreigners to pay in their home currency. Although this might seem a preferable option, it is often paired with unfavorable exchange rates.

Popular Credit Cards and Their Cash Withdrawal Fees

It’s always a good idea to check the fees for a cash advance on a credit card before applying for it. Let’s compare cash withdrawal fees of some popular cards:

Limits on Withdrawing Cash from a Credit Card

If you’ve ever tried to withdraw money with a credit card at an ATM, you probably know that you can’t simply take as much as you want. There’s always a limit set by a card issuer. You can typically withdraw 20% to 30% of your available credit limit, with premium cards typically having lower limits. To find the withdrawal limit of your card, check your monthly statement or look for "Account Details" in your bank's app.

Besides cash advance limits imposed by the banks, there are also ATM restrictions. Most ATMs allow customers to withdraw between $300 and $1,000 per day. This restriction stops criminals from quickly cashing out what they’ve stolen (at least in theory). If you need to withdraw a large sum, visit your local bank.

How to Make Smarter Credit Card Withdrawals

If possible, always use your debit card rather than your credit card to withdraw money. In cases where you absolutely must make a credit card cash advance, pay it back as quickly as you can to avoid accruing interest. Don’t wait for the monthly statement to arrive, as your interest balance will grow every day.

Also, remember the cash advance fee. If you know how much cash you’ll need this week, withdraw it all in one transaction. This is way cheaper than having to pay each time you need cash.

Conclusion

Generally, withdrawing cash from a credit card is among the worst ways to quickly get some cash, and you should resort to it only in actual emergencies. Consider other alternatives, such as cashing out the debit card or getting a personal loan. You can also borrow money from friends or family members. But if you decide to go with this method, bear the consequences in mind and try to quickly pay off your balance.

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