When you need cash due to an emergency or to pay bills, you may be wondering if it's possible to withdraw it from your credit card. Many credit card companies allow you to get funds from your card through a cash advance. While this may be convenient in a hurry, it is important to weigh the pros and cons before using your credit card to get cash. If your credit card has a PIN, you can get cash advances directly from an ATM.
Otherwise, you can take your card to a bank that offers advances through your card's payment network, such as Mastercard or Visa. A credit card cash advance is a withdrawal of cash from your credit card account. Generally, cash advances are limited to a percentage of your card's credit limit. You can only withdraw cash up to your card's cash advance limit, which you can find on the credit card account page (or app) or in the cardholder's agreement.
You may have to pay a service fee if you request a cash advance at an ATM like you do for any other transaction. In addition to getting a credit card cash advance through an ATM, you can also use what is known as a convenience check. Not only does interest start to accrue immediately, but many credit cards also charge a higher APR on cash advances than on purchases and balance transfers. You see, your cash advance balance is separate from other balances you have on your credit card, including the purchase balance and the amount you owe on any balance transfer. The appeal of credit card cash advances is no mystery; when you need quick cash, the convenience of going to an ATM with your credit card is no small thing.
However, accepting a cash advance by credit card has costs and, in some cases, limits on the amount you can withdraw. In fact, the APR for a credit card cash advance can easily be between 5% and 10% higher than the normal purchase rate. In most cases, the APR for cash advances is higher than the regular APR for purchases or balance transfers. If you don't see it, you can call your credit card company to ask if cash advances are an option with your card and, if so, what your limit is. A cash advance on your credit card may seem like a quick way to get money, but there are fees and risks to consider.
And unlike having at least 21 days to pay for a credit card purchase in full before incurring interest, there is no grace period for cash advances. Although they may sometimes be better than the alternative, you should consider a credit card cash advance only as a last resort. You can check your credit card statement or call your card issuer to find out your cash advance limit.
