Should you avoid withdrawing cash with your credit card?
Using your credit card to withdraw cash isn't an optimal scenario and where it’s possible to use another method of withdrawing cash, it’s usually advisable. Not only is it extremely expensive to withdraw cash on a credit card, but it leaves a mark on your credit record which could impact any credit applications you make in the future.
This is because withdrawing cash with your credit card can lead lenders to assume that you need to use your credit card because you don't have cash in your bank account. And even though your credit report is not the only factor that determines your eligibility for credit, it doesn't help in making your look more creditworthy.
If you do need to withdraw cash using your credit card, here are all the things to consider before you head to the ATM.
How much does it cost to withdraw cash from your credit card?
There are many similarities in how you can use a debit and credit card, however the cost of withdrawing cash is one key difference. Withdrawing cash from your credit card is an expensive way to borrow money. Each time you make a cash withdrawal from your credit card, there are two charges you'll face:
Daily interest: You will be charged interest on the amount you withdraw from the day you take it out until you pay off the balance. The interest rate for cash withdrawals is often higher than the interest rate on purchases, so ensure you are aware of the cost.
Cash advance fee: This is usually a percentage of the amount you withdraw, or a fixed fee, depending on the amount of money you withdraw. A cash advance fee is charged every time you withdraw money on a credit card, so try to avoid multiple withdrawals.
For example, a credit card may charge 3% or £10, whichever is higher. In this case, a £100 withdrawal would cost you £10, and a £1,000 withdrawal would cost you £30.
These charges differ from standard credit card purchases, which can give you up to a 28-day grace period before you start paying interest. Read more about how to understand credit card charges.
How much cash can you withdraw with your credit card?
When you withdraw cash from a credit card it is known as a cash advance. The amount of cash you can withdraw will depend on a few factors. These include:
Your total credit limit: This is the maximum amount you can borrow on your credit card. You can find this on your credit card statement.
How much of your limit you have left to use: The amount you have left to spend on your credit card can affect the amount you can withdraw from your credit card.
Your credit card's cash advance limit: Most providers set a maximum percentage of your credit limit that you can withdraw from, like 90%.
Ask your credit card provider what the cash advance limit is on your credit card, and what the charges are before making a cash withdrawal.
Where can you withdraw cash using your credit card?
You can get cash out on most credit cards in the following ways:
What is classed as withdrawing cash?
There are also card transactions which are treated as cash advances, even though you don't withdraw any physical cash. These include:
Making a mortgage payment
Paying a utility bill
Buying travel money and travellers' cheques
Buying gift vouchers
Betting or gambling (including lottery tickets and most transactions in a casino)
Does withdrawing cash on a credit card affect your credit score?
A cash advance will be recorded on your credit report, so lenders will be able to see that you have withdrawn cash with your credit card for up to six years. There is no guarantee that this will affect your credit score alone, however lenders will view it alongside the rest of your credit history to determine whether you are a reliable lender or not.
FAQs
Withdrawing cash from your credit card is an expensive way to borrow money. Each time you make a cash withdrawal from your credit card, there are two charges you'll face: Daily interest: You will be charged interest on the amount you withdraw from the day you take it out until you pay off the balance.
Can you take money out of a credit card in cash? ›
Getting cash from a credit card is one way to ensure you have money when you need it, but requesting a cash advance at an ATM can cost you. Expect to pay a cash advance fee at the ATM, and expect to pay a higher interest rate on any cash you withdraw.
Are you allowed to withdraw cash from credit card? ›
The easiest way to get cash from your credit card is to use an ATM. Insert your credit card into an ATM, enter your PIN, choose the cash advance option, and enter your withdrawal amount. Cash advances can have higher APRs than purchases or balance transfers, and interest starts accruing on them right away.
Can I use my credit card to withdraw cash? ›
Withdrawing cash using your credit card is called a cash transaction. You can withdraw cash at a cashpoint with your credit card, just like you would with your debit card. However, you should consider other options first, as cash withdrawals can be an expensive way to use your credit card.
Where can I use my credit card to withdraw money? ›
Find out how to get cash from a credit card and some things to consider before you do. Cash advances might allow you to get cash from your credit card at an ATM or bank branch. Convenience checks might be another option. They're blank checks from credit card issuers that are charged to credit card accounts.
How can I convert a credit card to cash? ›
- Step 1: Call your credit card company. ...
- Step 2: Once connected, request to speak with a representative. ...
- Step 3: Specify the amount of money you wish to transfer to your bank account. ...
- Step 4: Provide the representative with your bank account details.
The Cash advance limit is a portion of the overall Credit limit, ranging from 20% to 40%. For instance, if your Credit limit is Rs 1,00,000 then you can withdraw between Rs 20,000 to Rs 40,000 as cash. The remaining balance can be used for Card transactions only.
How much cash can I pull from my credit card? ›
Cash advances are typically capped at a percentage of your card's credit limit. For example, if your credit limit is $15,000 and the card caps your cash advance limit at 30%, your maximum cash advance will be $4,500.
Why are credit card cash withdrawals bad? ›
You'll be charged daily interest until you repay the balance, and likely an extra fee based on how much you withdraw. So the more you withdraw, the more it's going to cost you. It will also leave a record on your credit file, potentially damaging your credit score, which may affect your ability to borrow in future.
How much interest is charged on cash withdrawal from a credit card? ›
Finance Charges on Credit Card Cash Withdrawal
The rate at which the interest is charged is at the monthly percentage rate and will be levied from the date of the transaction till the repayment is made in full. Banks typically charge a rate of interest of 2.5% to 3.5% per month on all cash advances.
It is possible to use a credit card to transfer money into a bank account by using a cash advance or balance transfer check, but we can't recommend it. Cash advances are risky because of the high interest rates and costly one-time fees. Balance transfers can lead to more debt if they're not handled correctly.
How do I get cash from my credit card without cash advance? ›
Ask your card issuer for convenience checks. These are checks you can write that are tied to your credit card account. Wire money to yourself through a money transfer service, such as Western Union, and pay with your credit card. Purchase a money order with your credit card, if you can find a merchant that allows this.
How to get cash back from a credit card? ›
How to get cash from an ATM with your credit card. You can request a cash advance with your credit card from most ATMs. Simply insert your credit card into the ATM as you would any other card. Enter your PIN, and you should see an option for a cash withdrawal or cash advance.
Can I get a cash advance with credit one without a PIN? ›
No, you cannot get a cash advance with your Credit One card without a PIN. You can get a PIN for your Credit One credit card either online or over the phone, by calling (877) 825-3242. Once you get your PIN, you will be able to use your card to withdraw cash from an ATM.
What is considered a cash advance on a credit card? ›
A cash advance is when you use your credit card to access cash rather than goods and services. Transactions that are considered a cash advance include: Withdrawing cash from an ATM or from a store at the point of sale. Transferring money from your credit card account to another account.
How much cash can I take out of credit card? ›
What is the maximum cash advance limit you can withdraw from a credit card? Cash advances are typically capped at a percentage of your card's credit limit. For example, if your credit limit is $15,000 and the card caps your cash advance limit at 30%, your maximum cash advance will be $4,500.
Can I take cash from credit card in ATM? ›
You just go to an ATM and take the cash that you need, within the allocated limit. It doesn't need any special approval from the bank or anything. And you pay it back along with the charges that come with cash withdrawals. Every card has a credit limit – that is the maximum amount that can be spent on that card.
Can I use my credit card on cash all? ›
Yes, Cash App is among several person-to-person payment apps to which you can usually link a credit card to send money and to pay bills.
