Can you withdraw money with a credit card?

Withdrawing cash with a credit card is one of the most practical alternatives you can use to meet your day-to-day expenses; such as filling up your gas tank, paying your bills, even unexpected expenses in emergency situations.

The option to withdraw cash from your account is available at most banks and financial services companies. However, we offer you the opportunity to learn how to withdraw money efficiently with a credit card.

Can I really withdraw money from a Credit Card?

Of course you can. Withdrawing a portion of your funds from a credit card is known as a “credit advance” and is basically a short-term loan.

The purpose of this type of cash advance is the same as when you make a payment at any establishment, you simply enter the credit card in the ATM and enter the PIN data associated with you card.

If you still don’t know how to use your credit card PIN, no problem. Obtaining the key is much simpler than you think, you just have to consult directly with your bank or access one of its online platforms to request it and make cash transactions.

Operation of cash advances

If you are currently going through a difficult economic situation and you intend to request money through an advance with your credit card. Then withdrawing money from your credit card is not the most advisable alternative to use.

It is almost a normalized and natural situation that you should swipe your credit card when you do not have money available to meet your expenses in a given situation, but those debts will undoubtedly be more difficult to pay in the future.

Here are two reasons why it is not the most appropriate to use a cash advance through a credit card:

These are really expensive financial instruments

Withdrawing money from a credit card involves costs, to which you must add the interest charged by the bank for carrying out the operation and using your money, in case you do not have funds in your account.

Each day that passes without returning the money to the bank, you will be surcharged commissions, applying higher interest rates on your debt.

Unlike charges made with a credit card, there is no “grace period” at a merchant. When you use your credit card, interest will begin to be charged from the date you withdraw a cash advance.

If you decide to withdraw a cash advance through an ATM, you must take into account that you will be charged an amount applying an interest rate that can vary between 3% and 5%, to which you must also add the commission charged by the ATM.

The best options are also expensive

To give you a much clearer example, the use of American Express cards have an annual percentage rate (APR) ranging from 18.24% to 29.24% applied to purchases. This compares to a cash advance fee with an APR of 29.49%.

Negative point on credit record

Something that many people are unaware of is that a cash advance can affect your credit record with your credit card and bank.

Each cash advance request is a recharge made according to the amount of credit you actually have available. In this sense, the bank may take these cash advances negatively.

Since the bank will interpret that you are using more money than you have in your account without paying for it.

Steps to obtain a cash advance with your credit card

If, in spite of the recommendations we have given you, you have the need to withdraw your money or make a cash advance. Then you should pay special attention to each of the following steps.

Pay close attention:

  1. Verify the amount you can withdraw. A person who has a credit card has the possibility of verifying the amount available in his or her bank balance.
  2. Know the cash advance limit. Some financial entities establish a limit on the amount of money that their users can withdraw through an ATM.
  3. Go to an ATM and enter your credit card. Next, you must enter your credit card PIN.
  4. The teller will indicate the possible options. Choose between “cash withdrawal” or “cash advance”. For cash advances you must choose the second option.
  5. If the “Debit” or “Credit” options are displayed, choose “Credit”.
  6. Enter the amount you wish to withdraw.
  7. Accept the fees that the ATM will charge for the transaction.
  8. Complete the transaction and withdraw the cash.

As you can see, the collection of this type of credit is similar to what happens with debit cards. Pay close attention to the steps mentioned above so that you will not have problems later on.

Why aren’t there such high charges on debit cards?

It is important to note that the money you have available on your debit card is yours and has been previously deposited by a third party.

The bank, understanding that it has the possibility to function as a channel; charges much lower commissions so that a greater number of people use its products.

If we talk about the credit card, this is money that the bank grants on its own and therefore, they lend or deliver it in the way that is most convenient for the institution, so people accept or not the conditions of use.

To avoid large fees, some experts recommend that before opting for the “advance credit” alternative, you should explore the possibility of accessing an affordable loan with lower interest rates.

Advantages of using a credit card to obtain cash

Here are the positive points about using a credit advance. Pay attention:

  • You will get money quickly. Simply go to your nearest ATM and withdraw the amount you need from your account.
  • You can withdraw cash at any ATM. VISA and Mastercard bands are available in almost any country, so you have the possibility to withdraw money in an easy and simple way.
  • This is a quick transaction. Any ATM has the option to withdraw funds.
  • It is available 24 hours a day. There is no time limit to execute the transaction, as long as the ATM has money available.
  • Most banks accept the transaction. As we have mentioned, the cash advance is very easy to manage, even if you decide to manage the money from another bank.

Considering these advantages, we can’t deny that the temptation to resort to a cash advance outweighs the temptation to go into debt. However, with consistent management of your expenses, you will be able to maintain your balance without the need to resort to credit.

Alternatives to avoid a cash advance with your credit card

We have already detailed some of the main reasons why a cash advance through a credit card is not the best credit option, unless you really need the money urgently.

Here are some alternatives that may be worthwhile:

  • Apply for a loan online. Nowadays there are many private institutions that offer inexpensive and quite easy to pay loans.
  • Take out a loan at the bank. If you already have a credit card and a good credit record, it is more than likely that you also have a good profile to qualify for a low-cost loan.
  • Use money from your checking account. It may seem very simple, but in the future you will appreciate that it is one of the best options available.
  • Find a way to pay directly with your card. If you have to make a payment at any establishment, it is best to use a direct point-of-sale payment with the TDC.

In case you look closely, you may have the option of withdrawing money at an ATM with your credit card. It is important to clarify that it will not always be one of the first options to consider, since it represents a much more costly debt in the future.

If you have any anecdote with a cash advance at an ATM with a credit card, tell us about it! In this way we will expand and enrich the available options we have mentioned.

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