Why You Should Avoid Getting Cash From The ATM With A Credit Card

File this under “just because you can, doesn’t mean you should.” Yes, you can use a credit card at an ATM to get a cash advance. And you can conduct this type of transaction domestically, as well as in many parts of the world. Fact is, you don’t have to be in your hometown or state to get a cash advance through an ATM. But before you slip that card into the slot, know what you’re getting into when you’re getting cash out.

How To Withdraw Cash With A Credit Card

The process of using a credit card to get cash at an ATM is very similar to using a debit card for a withdrawal. After you’ve selected the ATM you want to use (preferably one that doesn’t charge transaction fees), insert the credit card. You might be asked to enter the PIN associated with the card.

Once you’ve punched in the PIN, you can enter the cash amount you’d like to receive and the ATM will disburse the money, much like a standard transaction. In order for the transaction to be successful, you’ll need to be sure that the amount you’re requesting doesn’t exceed your credit card’s cash advance limit.

Using a credit card for an ATM cash advance may come with some additional transaction fees.

Cash Advance Fees

When credit cards are used at an ATM to make a withdrawal, credit card companies treat it as a cash advance. You’ll pay the same applicable cash advance fees as you would if you used your credit card to secure a cash advance. You can expect to pay either a flat rate or a percentage of the cash advance, depending on which is higher. In some instances, you might be required to pay a fee somewhere around $5 or 3% of the advance amount.

Review the disclosures for your particular credit card to determine exactly how much you’ll be charged for the cash advance. Credit card companies are mandated by law to be transparent about costs associated with using your card.

Interest

Accessing cash using a credit card at an ATM can cost you:  Interest rates on this type of cash advance can be 4% to 5% higher than the interest on purchase balances. In some cases, the APR can be 27.49% or more, despite the fact the APR on purchases is much lower.

Keep in mind also that some cards start charging interest on cash advances right away, instead of waiting until the statement closes and a payment comes due. If that happens, you could end up paying additional interest charges on your bill if you secured a cash advance from an ATM early in your card statement period and you don’t pay the balance off right away.

ATM Fees

If you use a credit card to withdraw cash from an ATM that’s outside of its network, expect to pay a fee to that network. In addition, businesses that allow ATMs to operate on their premises can charge consumers a fee just for using the ATM. The cost of your transaction can add up to several dollars if you find yourself paying two separate fees. Convenience, so it seems, has its price.