Paying with a credit card is great for most things–superior to cash, in fact, as they make it possible to earn valuable rewards for spending you planned to make anyway. Plus, they’re safer to carry than wads of currency, as you (usually) aren’t liable for unauthorized purchases.
Still, sometimes you need cash. If you’re in a bind that only cash can solve, you may wonder: Can you withdraw money from a credit card? The quick answer is yes, but it’s rarely a good idea. Here’s what you need to know.
Can you get cash back with your credit card?
There are several ways to get cash back with your credit card. With little exception, these methods are all considered a “cash advance.”
Your cash advance limit is considerably lower than your total credit line. Cash advances count toward your credit limit in the same way as regular purchases.
For example, if you’ve got a credit card with a $10,000 credit limit, you may only have a $3,000 cash advance limit. By initiating a $1,000 cash advance, your available credit would drop to $9,000, and your cash advance limit would drop to $2,000 until you make a payment.
Pros and cons of using your credit card to get cash
There are often steep fees associated with cash advances. And the fact that you’re effectively liquidating your available credit because you’re low on cash may indicate that you’re spending beyond your means. Cash advances should only be used in an emergency.
Consumer spending, shopping, and savings expert Trae Bodge averts the need for a cash advance with a simple trick. “Rather than taking a cash advance, I would investigate a ‘Buy Now Pay Later’ (BNPL) option,” she says, referring to abnormally large purchases. “As long as you understand the rules, you can spread your payments out interest-free.”
BNPL services can keep you from racking up large bills on your credit card that you’re obliged to pay off to avoid interest. Generally, you must pay your bill in full within a few months. That keeps more money in your bank account for when you’ve got a cash expense.
Pros
- You can get cash when you need it. If you’ve got an urgent bill that requires more cash than you’ve got, you can front yourself the money and pay off your credit card later.
- You don’t have to open an additional loan. Applying for a personal loan would require a credit check. Not so with a cash advance.
- Cash advances are easy. You can often use your credit card to get cash instantly online or via an ATM, and there are also cash advance apps to help you along.
Cons
- APR is often higher than normal. Cash advance interest rates are almost always higher than the interest rates you’d pay for regular purchases.
- You’re guaranteed to pay interest. Most credit cards will waive interest on purchases if you pay your bill by the due date each month, but cash advances begin accruing interest immediately.
- Cash advances have initiation fees. You’ll often pay between $10 or 5% of the transaction amount, whichever is higher.
- Your credit score may suffer. Cash advances eat up a portion of your credit limit, which can raise your credit utilization. If your credit utilization is too high, your credit score may drop.
Most credit card holders are well aware of the above disadvantages regarding credit card cash advances. But there are some behind-the-scenes reasons, as well.
“What people don’t understand is that the lender issuing the cash advance loan now considers you a higher risk,” says Credit Expert John Ulzheimer, formerly of FICO and Equifax. “One of the reasons credit card issuers take punitive actions towards consumers, like closing their accounts or lowering their credit limits, is if they make certain types of transactions. One of those transactions is a cash advance. It screams of desperation, and lenders aren’t stupid.”
How to get cash from your credit card
Again, we don’t recommend squeezing your credit card for cash unless you absolutely have to. Borrowing money you don’t have is a slippery slope toward crippling interest charges, which make eliminating debt extremely tough. Only use the following options if your back is against the wall.
How to use a credit card to get cash at an ATM
Many credit cards can be used as a debit card at an ATM–but only if you’ve preset a PIN on your card. If you don’t have a PIN, you can create one by calling your card’s customer service number.
Simply insert your credit card and enter your PIN to withdraw money. The ATM may ask whether you’d like to use checking, debit, or credit. Select credit and enter the amount of money you’d like to withdraw.
The ATM should warn you of any fees you’ll pay for the transaction. Note that this doesn’t include card-specific fees, such as cash advance APR and one-time fees.
How to get cash back from a credit card at the store
If you’re wondering how to get cash back from a credit card at the store, you’ve got limited options.
Some credit cards offer a feature that allows you to essentially overpay at the register, which results in the cashier handing you cash. When using the Discover it® Cash Back at checkout, the merchant terminal will ask you how much cash you’d like to receive. You can choose up to $120 every 24 hours.
Alternatively, you can often use credit cards to buy “cash equivalents” like Visa and Mastercard gift cards. These are effectively debit cards. Some stores even allow you to purchase money orders with these cards. Just note that there are almost always fees for buying gift cards and money orders.
Neither option is considered a cash advance, so you won’t be subject to fees associated with cash advances.
How to use a balance transfer to get cash
Balance transfers usually refer to moving debt from one account to another. For example, if you’ve got two credit cards, each with $2,500 balances, you could transfer your $5,000 in debt onto a single card to consolidate (and potentially lower) your monthly minimum payments.
But sometimes you can even transfer a portion of your credit line to your bank account via a balance transfer check issued by your credit card’s bank. You can fill out these checks and easily deposit them into your bank account.
How to get cash back from P2P payment services
Payment platforms like Venmo and PayPal allow you to send money to friends and family (or anyone else with an account) for a fee. From there, the recipient can deposit the money into their bank account. In other words, if you send money to your partner, they could easily cash out the money for you. In many cases, your credit card will even earn rewards for the transaction.
There are a couple of things to watch out for, however:
- Expect to pay around 3% in fees for the privilege of sending money via credit card.
- Some credit card issuers code these purchases as a cash advance (though many do not).
The exception is a service from American Express called Amex Send. This allows you to transfer money from your Amex card to anyone with a Venmo or PayPal account for free (though you’ll be charged interest like any other purchase). You won’t earn rewards with this service.
Frequently asked questions
How do I get cash back from my credit card?
There are several ways to get cash back from your credit card. You can withdraw money at an ATM or receive convenience checks from your card issuer that, when deposited, draw from your credit line. Sometimes you can even deposit money directly into your bank account from your card by submitting a request online.
Can you withdraw money from a credit card?
Yes, you can withdraw money from a credit card–but the most common methods are categorized as a cash advance, which comes with high fees.
