Can You Use a Credit Card at an ATM?

Man using an cash dispenser on the street

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Maybe you're running short on money in your checking account, or perhaps you left your debit card at home. If you need cash, you may be able to use your credit card to withdraw money from an ATM—a process known as a cash advance. Keep in mind, though, that if you obtain a cash advance at an ATM, you'll likely pay a cash advance fee. Plus, the APR (annual percentage rate) for a cash advance may be higher than the APR for a purchase with a credit card.

What Is a Cash Advance?

You can think of a cash advance as a short-term loan from your credit card issuer.

Most credit cards let you borrow a set amount of cash as an advance. The limit for the cash advance may be in the hundreds or even thousands of dollars. You probably won't be able to borrow as much as your regular credit limit would allow. Look at your credit card statement or reach out to the card issuer to find out the cash advance limit for your card.

When you borrow cash using your credit card, the amount you borrow is added to your credit card balance. This has a few potential downsides, such as driving up your credit card's minimum payment and increasing your credit utilization, which is an important factor in your credit scores. If the amount you borrow is substantial, your credit utilization could increase drastically, and that could hurt your credit scores.

How Much Does a Cash Advance Cost?

A cash advance is a quick way to get cash, but it normally comes at a price. Credit card cash advances typically charge fees as well as interest that could be much higher than you'd get on other types of loans, such as personal loans.

The interest on the amount you borrow often exceeds the APR for a credit card purchase. In fact, the cash advance APR frequently can be several percentage points higher than the card's standard purchase APR. For example, your purchase APR may be 13.99%, but your cash advance APR may be 19.99%. Generally, the interest on a cash advance starts accruing as soon you borrow the money.

In addition, the credit card issuer may hit you with a cash advance fee. An example of a cash advance fee is $10 or 5% of the cash advance amount, whichever is higher. On top of the cash advance fee, the operator of the ATM may charge a flat fee for using their machine.

How to Use Your Credit Card at an ATM

If you have a PIN for your credit card, you can insert your card at an ATM, enter your PIN and withdraw cash. Most ATMs cap the dollar amount or number of transactions per day, however, so you may need to visit your financial institution to obtain the advance if you need to take out more than a few hundred dollars.

If you didn't get a PIN when you opened your credit card account, you can call your credit card issuer and request one. You might end up having to wait a few business days for the PIN.

Alternatives to Using Your Credit Card at an ATM

Because cash advances typically come with high costs and can affect your credit score, it's a good idea to look into alternatives. Those options include:

  • Loan from friends or family: You may be able to ask a friend or relative for a loan. Be sure, though, to treat your loan just like you would a loan with a bank. Put your repayment agreement in writing and keep up your end of the bargain by making regular payments (potentially with interest).
  • Lending circle: You may not be familiar with a lending circle, but it could be a valid alternative to a cash advance. A lending circle lets you borrow money and pay little to no interest—and your credit score might even get a boost. The nonprofit Mission Asset Fund provides lending circles and reports lending activity to the three national consumer credit bureaus (Experian, TransUnion and Equifax).
  • Use the credit card to make a purchase: Instead of getting a cash advance and paying fees and higher interest, it might make more financial sense to simply make the purchase with the card.
  • Debt consolidation loan: A debt consolidation loan rolls existing debt into one new loan, normally at a lower interest rate than the existing debt. This enables you to make a single monthly payment rather than many payments to various lenders. A debt consolidation loan can free up more money in your budget and help you avoid the need for a cash advance.

There are other options as well, but they are best to be avoided. These include payday loans, title loans and pawn shop loans. People often turn to payday loans because they do not require collateral. Payday lenders usually charge high fees as well as triple-digit APRs. Unfortunately, these loans can worsen your financial situation if you don't pay them off as soon as possible. Payday loans are a last-ditch alternative to cash advances.

The Bottom Line

A cash advance from a credit card can be a short-term fix when you're short on cash. Be sure to exhaust other options, such as a loan from friends or family, before you take advantage of a cash advance. If you're not diligent about paying off a cash advance as soon as possible, the associated APRs and fees can set you back even further financially. If you have the time, making an effort to improve your credit standing can help you qualify for more borrowing options that won't cost you as much.