Most of us know how to use our credit cards to make purchases, but not everyone knows how to get cash from a credit card at an ATM. When you use your credit card to request a cash advance, you can withdraw money from your credit card and use it to pay rent, pay back friends and family, cover bills, and more.
Can you use a credit card at an ATM to get a cash advance? Absolutely. Would you? Not unless you need to. Cash advances come with extra fees and high interest rates, so they should only be used as a last resort. Here’s what you need to know about how cash advances work, how to get cash from your credit card at an ATM, and what cash advance alternatives you should consider before taking money out of your credit card.
What is a cash advance?
A cash advance is a transaction that allows you to withdraw money from a credit card. Instead of using your credit card to buy goods or services, you are essentially using your credit card to buy cash. The money you withdraw under a cash advance becomes part of your credit card balance.
Getting cash from a credit card is one way to make sure 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.
In most cases, cash advance interest rates are between 20-25 percent APR, and there is no grace period where you can pay off your balance without being charged interest. The APR of the cash advance will begin immediately.
To minimize the cost of a cash advance, pay off your credit card balance in full as soon as possible. The longer you keep a cash advance on your credit card without paying it off, the more you risk building up high-interest credit card debt.
How to use a credit card in an ATM to withdraw money
If you need to withdraw money from a credit card at an ATM, you can request a cash advance here:
- Insert your credit card into an ATM
- Enter your credit card PIN
- Choose the “cash payment” or “cash advance” option.
- Select the “credit” option if necessary (you may be asked to choose between check, debit or credit)
- Enter the amount of cash you want to withdraw
- Acknowledge that you accept any fees associated with the transaction
- Complete the transaction and collect your cash
Using a credit card at an ATM is much like using a debit card – just follow the instructions to withdraw cash, acknowledge your acceptance of the fees and charges, and collect your money.
Things to consider before taking out a cash advance
There may be a case where you need to take out a cash advance due to an emergency, but despite whatever reason has brought you to an ATM with your credit card, you need to develop a plan to pay off the cash advance as quickly as possible. But with all of this in mind, there are three major downsides to a cash advance. Let’s take a look at a few.
Cash Advance Fees
First, your bank will charge a cash advance fee every time you use a credit card at the ATM. With ATM fees already higher than ever, paying an extra cash advance on your ATM transaction is an added expense that you should try to avoid whenever possible. The exact fee you will be charged varies from issuer to issuer.
Cardholders can find this information in their card’s terms and conditions. Be sure to read these carefully before accepting your fate with a cash advance.
High interest rates
Cash advance interest rates can be much higher than the interest your credit card issuer charges for purchases — and since cash advances don’t come with grace periods, that interest starts running right away. Interest on a cash advance can seriously add to your debt, especially if you carry a balance on your credit card from month to month.
Negative effects on credit scores
The third disadvantage of a cash advance has to do with your credit score. Taking out a cash advance will lower your available credit, so be prepared for your credit score to drop. In other words, if the balance is not paid off and interest starts accruing immediately, your credit utilization ratio will increase and your credit score will decrease. You can also expect lenders to see you as a bigger credit risk, since people generally only request cash advances when they don’t have enough money in their checking account to cover an expense that requires cash.
Alternatives to cash advances
If you need cash but don’t want to pay the extra expenses associated with a cash advance, you have a few options. If you have a debit card, you can withdraw money from an ATM without having to pay a cash advance fee, as long as you use an ATM in your bank’s network. You can also visit a bank branch and cash a check in person.
If you need to use your credit card to make a cash payment because you don’t have enough money in your checking account to cover the cost, see if there are other ways to transfer the money. Peer-to-peer payment apps like Venmo or Square Cash (often called Cash App) allow you to send money to friends and family. This means that if you were hoping to get cash to pay back a friend or relative, you might be able to Venmo or Cash App them instead.
Be aware that Venmo and Square Cash both charge a 3 percent fee for credit card transactions. Some credit card issuers also code peer-to-peer payments as cash advances. So it’s still best to use a debit card or linked checking account with Venmo and the Cash App whenever possible.
Finally, you can consider a personal loan. If you need cash fast but don’t want to deal with the high costs of a cash advance, a personal loan can get you the money you need at a much more reasonable interest rate. From August 2024, the average private loan interest rate is just over 12 percent. When you take out a personal loan, you receive a lump sum that you can use to pay rent, pay medical bills or cover other types of expenses that require cash.
An exception to consider
Don’t confuse a cash advance with a “cash back credit card.” The latter is a rewards card that gives you cash back in the form of rewards you can redeem to an eligible account or to bank statements. However, some Wells Fargo cards allow cardholders to redeem their money back as a withdrawal at a Wells Fargo ATM. In that case, you do not take a cash advance. Instead, you redeem your cashback rewards. There will not be a cash advance fee or interest to consider.
Bottom line
Remember that a cash advance should always be seen as a last resort. It’s important to exhaust all your other options before deciding to get cash from a credit card at an ATM, such as using a debit card, a payment app or a personal loan. You can even borrow cash from a friend if the opportunity presents itself. Interest rates on cash advances tend to run higher than regular purchases, so keep in mind the financial consequences if you are unable to pay off your account balance quickly.