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How do you get cash from a credit card?

How To Get Cash From Credit Card

You can get cash from a credit card with a few simple steps: choosing your card, traveling to a location where you can use it, following directions/prompts, and getting your cash!

Many credit cards allow their users to get cash from them. If you are thinking of getting cash from a credit card, you may be wondering how to do so. As you can see, the process is pretty straightforward, but there are some things you need to know about credit cards before you decide to withdraw cash from them. Here is everything you need to know about the cashing process with credit cards. 

Is Cash Back the Same as Getting Cash From Your Credit Card?

Before you move forward with getting cash from your credit card, it will be helpful to understand the distinction between cash back and cash withdrawals. Because these two processes sound similar, many people get them confused with one another. Getting cash back from your credit card is not the same as getting cash from your credit card. 

Cash back is a reward that your credit card company may have. With this, if you spend a certain amount, shop at a specific retailer, or meet similar conditions, you will credit back on your credit card statement, which you can use similarly to cash. In most cases, you can use this “cash” by transferring it to your checking account, buying a gift card, or using it to pay off your credit card. 

Getting cash from your card involves borrowing from that limit and has nothing to do with credit card rewards.  

Where Can I Find a Credit Card?

If you don’t already have a credit card you can withdraw money from, and you want to move forward with a credit card cash advance—one type of the many different cash advance loans, you will have to apply for one. 

You can find credit cards with banks, credit unions, retailers, and online lenders. Online lenders and retailers may be more flexible than financial institutions like banks or credit unions. And so, if you are applying for a credit card with bad credit, start with those options. If you still cannot get approved for a credit card, consider adding a cosigner or co-borrower to your application. This can help with approval and a higher credit card balance.

To apply for a credit card, you’ll need a government-issued photo ID, proof of income, proof of residency, and your social security number or TIN (tax identification number). You’ll also need to complete a formal application with the credit card companies you are applying with. 

To find the best credit card for you, apply for pre-approval with a handful of lenders and compare credit card limits, interest rates, cashing factors, rewards, and the lenders themselves. By looking at all these factors you can rest assured that you are finding a credit card option that works best for you. 

A Step-by-Step Process on Getting Cash From a Credit Card

If you want to move forward with getting cash from a credit card, you will need to go through these steps:

StepDescription
Choose the Card You Want To UseCompare cashing availability on different cards.
Head To a Place You Can Use Your CardGo to an ATM, a branch/store of your card issuer, or make a purchase at a retail location.
Move Forward With the Prompts To Get CashFollow the prompts on the machine at the chosen location.
Get Cash and Use ItReceive the funds from the machine or teller after the transaction is complete.
Repay the Cash You BorrowedRemember to pay back the withdrawn cash, which will be added to your card statement.
Apply for a New Card (If Needed)If you don’t have an appropriate card, consider applying for a new one to access cash from credit.

Below is more detail on each step:

Step 1: Figure Out What Card You Want To Use 

The first step is to figure out what card you want to use for cash back. Most people have a few cards they can use, so comparing their cashing availability is a good idea before deciding. You should pay attention to your cashing limit, whether there are any fees, and the interest rate applied to that transaction. 

Step 2: Head To a Place You Can Use Your Card

Once you know which card you want to use to get cash, your next step is to head to an ATM, a branch/store of your card issuer, or purchase something at a retail location. You’ll need your credit card, sometimes an ID, and you need to know your zip code. 

When using an ATM, double-check to make sure that they accept your card type, and then place the card in there. When getting cash back after a purchase, simply buy something for a cash back option. And finally, the least common way of getting cash back is to head to a location for the issuer, for example, if you have a card with a bank, you can head there and talk to a teller.  

Step 3: Move Forward With the Prompts To Get Cash

Once you are where you need to be, all you have to do is follow the prompts on the machine. With an ATM and a store purchase, it will be similar to when you withdraw cash from a debit card. Simply select the cashback prompt and then select or enter how much money you want to withdraw. 

Step 4: Get Cash and Use It 

Once your transaction is over, someone will hand you the funds, or they will be dispensed automatically. From here, take your cash and use it as you need.  

Step 5: Repay the Cash You Borrowed

And finally, once you have used your cash, don’t forget about having to pay it back, that cash withdrawal will be added to your card statement and you can pay it off monthly. 

And so, as you can see, getting cash from a card that you already have is pretty straightforward. If you don’t have a card you can use immediately, you can apply for a new one. 

Some Drawbacks and Things to Consider When Getting Cash from a Credit Card

Credit card cash advances can definitely be convenient if you already have a card and need fast cash; you don’t have to go through an application and wait for approval. And it is relatively easy to do so. However, it would be best to consider potential downsides and a few other variables before getting cash from your credit card. 

Your Credit Utilization Change

Your credit utilization is the ratio that measures your available credit against the amount of debt you have. When you borrow cash from a card, you will be impacting your credit utilization in the two ways possible: your available credit and credit usage. If your credit utilization exceeds 30%, it can hurt your credit scores. And so, if borrowing cash from your card raises your credit utilization above 30%, you may want to reconsider. You should also be mindful of your card’s credit utilization independently, as well.

Interest Rate on a Credit Card Cash Advance Is Usually Higher Than Using Your Card 

When borrowing a cash advance from a credit card, the interest rate will be higher than if you were to use your card as a credit transaction. And that cash withdrawal will start accruing interest immediately. The typical interest rate for a credit card cash advance stands at close to 24%, while for purchases, it’s around 16% on average.1

So, familiarize yourself with your card’s interest charges/APR so there are no surprises with your cash advance. Another thing to be mindful of is that you may have ATM fees that will be charged to your credit card. 

The Due Date on Your Cash Advance

Another thing you need to keep in mind with a credit card cash advance is the due date on your card bill. In most cases, your cash advance amount will be added to your credit card statement, and you will have to pay the cash advance back like you would with a regular credit transaction. As mentioned above, credit card companies will have higher cash advance interest rates.  

Being Aware of the Cash Advance Limit

Your credit card company will give you a credit limit on both your credit card transactions and your cash advance. And so, before you withdraw a cash advance from your credit card, make sure you know your limit. 

There May Be a Cash Advance Fee

When withdrawing cash, there may be a few cash advance fees you will have to pay, while other fees may be avoided. For example, there may be an initial cash advance fee and then if you miss the due date there may be an additional charge that you will have to pay. Cash advance fees are commonly calculated as a percentage of the amount you take out or a flat fee. Usually that percentage is between 5% to 6% of the withdrawn sum or a fee of $10, depending on which is higher.2 

Alternative Options 

A credit card cash advance isn’t your only option if you have to cover expenses. Personal loans are a great option if you need cash quickly and don’t have the best credit. You can find personal loan lenders online, with banks and credit unions. Once approved, the funds can be sent straight to a bank account and withdrawn as cash with your debit card. Because these are installment loans, you’ll have to repay them in steady monthly payments.

Another thing you can consider is simply using your card as a credit transaction for your expenses. With a credit transaction, you likely will have more money you can use, less interest, and fewer fees to pay. And so consider that option instead. 

One last thing to consider if you need a few hundred dollars in cash is to get a side hustle. There are many jobs that can mean quick cash and flexible hours, like dog walking, grocery delivery, or ridesharing. If you have the option to borrow from friends or family, you may want to consider it—there likely won’t be any interest due on that, and flexibility with repayment. However, borrowing money from friends and family may get complicated. 

FAQS: Credit Card Cash Advances

What are cash advance fees, and how does my card company calculate them?

Cash advance fees are charges imposed by your credit card company when you borrow cash against your credit account. These cash advance fees can be a flat amount or a percentage of the cash advance, depending on the terms.

How does a cash advance impact my credit score compared to regular credit card transactions?

Taking a cash advance can affect your credit score by increasing your credit utilization rate. If the cash advance significantly increases your balance on your account, it can have a negative effect. Additionally, frequent cash advances might be viewed as a sign of financial distress by lenders.

Are there daily or monthly limits set by credit card issuers for cash advances on credit card accounts?

Yes, most issuers set daily and monthly limits for cash advances. These limits can vary based on the card and your credit history

Is there a grace period for cash advances, or does the cash advance APR begin immediately?

Unlike regular card purchases, cash advances typically don’t have a grace period. This means the interest starts accruing from the day you take out the cash.

Can I pay off just the cash advance amount separately from my credit card account balance?

Most companies apply payments to the balance with the lowest interest rate first. This means payments might go towards purchases before the cash advance. It’s crucial to check with your credit card issuer about their payment allocation policies.

If I don’t have enough funds in my checking account, can I use a debit card to repay the cash advance taken from my credit card?

While you typically cannot directly use a debit card to repay a cash advance, you can transfer funds from your checking account linked to your debit card to your credit account to cover the cash advance amount.

How can I find out the specific terms, including cash advance interest and fees, for cash advances on my credit card?

The specific terms associated with cash advances, including the cash advance APR and fees, can be found in your card agreement. Alternatively, you can contact your card issuer’s customer service for detailed information on a cash advance.

Are there any alternatives to credit card cash advances if I need immediate cash but don’t want to impact my bank account balance?

Yes, alternatives include personal loans, overdraft protection, borrowing from friends or family, or seeking short-term employment or side hustles. Always consider the implications on your bank account and overall financial health before making a decision.

The Bottom Line With CreditNinja 

If you are considering getting cash from your card it’s essential to be mindful of the associated fees, interest rates, and the impact on your credit score. While cash advances can be a quick solution, exploring alternative options like personal loans or using the card for regular transactions might be more financially prudent in the long run. Always make an informed decision and ensure timely repayment to avoid accumulating high-interest debt. To learn more about cash advances, loans, and other aspects of your finances, check out CreditNinja’s blogs. 

References:

  1. What Is a Credit Card Cash Advance and How Do They Work? | Incharge.org
  2. Steer Clear of This ‘Bad Idea’: Cash Advances on Credit Cards | The New York Times 

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