Can I Use a Credit Card at an ATM?

Many people wonder whether they can use a credit card at an ATM, how it works, and whether or not they should. In short, using a credit card at an ATM can be a quick and easy way to get some cash in a pinch, but it is generally a bad idea due to fees and interest.

Can I Use a Credit Card at an ATM?

Automated teller machines offer a great replacement to bank tellers for quick, self-service transactions. You can use most ATMs these days to deposit checks or cash, check your balance, or withdraw cash from a checking or savings account with a debit card. But can you use a credit card at an ATM? The short answer is yes.

Credit cards and debit cards are virtually identical in appearance. And both link to a financial account that allows you to withdraw cash. When you withdraw from a regular checking or savings account, your withdrawal lowers your balance. This is a pretty familiar situation for most of us.

When you use a credit card at an ATM, instead of drawing from an account with a cash balance, you increase the debt on your card. If you have a $500 balance and withdraw $200 in cash, you would then have a $700 credit card balance. But beware that all balances are not treated equally. More on that coming up in the section on cash advance fees.

Many credit cards do not support a cash withdrawal by default. For that, you may need to contact your bank to get a personal identification number (PIN) similar to your debit card.

How Does Using a Credit Card at an ATM Work?

Using an ATM to get cash using a credit card is very similar to withdrawing money with a debit card. Locate an ATM near you, preferably one that does not charge fees and is on the correct network for your credit card issuer.

Once you choose the ATM that you’d like to use, insert the credit card. The ATM may ask for the PIN associated with that card. Since you don’t have to use the PIN when making purchases with a credit card, you may not know it. You can resolve this by calling the number on the back of the credit card and getting your PIN reset. Once you’ve entered your PIN, you can enter the amount of cash you’d like to receive, making sure not to exceed your card’s cash advance limit, and the ATM will distribute the money to you.

How do I get money from an ATM with a credit card?

You’re really still thinking of taking out a cash advance? Here’s how you can do it, but your future self will probably thank you if you don’t.

  1. Check to make sure your card allows cash advances. You can call the phone number on the back of your credit card to find out.
  2. Make sure you know how much of your cash advance credit limit is available. You can usually see this on a statement, or you could call the phone number on the back of your card.
  3. Find or set your PIN. This may have come with your card when you received it in the mail. If not, you will probably have to request it from the issuer by logging into your account online or calling the phone number on the back of your card. It might take 7-10 days to get the PIN set up.
  4. Understand the terms and fees for cash advances on your card. Figure out when you’ll pay it back, and do the math to figure out how much extra money you will be paying for the cash you’re getting.
  5. Think about other options so you don’t really have to get cash out with a credit card.
  6. If you’ve decided to go through with it, find an ATM and withdraw cash with your card and PIN. You might also get charged a fee for using the ATM if it’s in a different network than your bank.
  7. Pay back the cash advance back as soon as you can. It will start accruing interest immediately, so if you don’t pay it back right away the debt could snowball out of control.

Useful Tip: Don’t pay ATM fees

I probably shouldn’t even tell you this here since we like to keep the focus on credit cards, but I do have a really good tip about using ATMs…

Charles Schwab has a special free checking account. They refund all ATM fees at the end of the month.If you ever get cash out of an ATM, this might be a checking account to consider.

I’ve been using this card for years. It gives me a certain satisfaction being able to take $20 out any ATM anywhere, no matter how high the fee, because I know I’ll be getting it back at the end of the month.

It’s connected to a brokerage account, but you don’t even have to use that.

This card won’t help you if you’re strapped for cash, but I figured I’d let you know about it since it’s silly to waste $2 or more to get out $20! Although that’s still low compared to the money you might be wasting if you use your credit card at the ATM.

Where can you withdraw cash?

You can get cash out on most credit cards in the following ways:

  • Using a cash machine

  • At your provider's branch with ID, e.g. passport

  • Cashback when you pay with your card in a shop

There are also card transactions which are treated as cash advances, even though you don't withdraw any physical cash. These include:

  • Making a mortgage payment

  • Paying a utility bill

  • Buying travel money and travellers' cheques

  • Buying gift vouchers

  • Betting or gambling (including lottery tickets and most transactions in a casino)

Why you should generally avoid using your credit card at an ATM

As a general rule, you should do your best to avoid using a credit card at an ATM. Because of the cash advance fees and higher interest rate, borrowing cash from a credit card is almost never a good idea.

Also keep in mind that if you are using a rewards credit card, you probably won’t earn any rewards from a cash advance transaction, so you will end up further behind than using your credit card at a store or online for a regular purchase.

Using a credit card at an ATM should be a last resort if you need cash in a serious pinch. Otherwise, skip it and use your debit card or, even better, use your card for a regular purchase that earns rewards. But, as always, make sure to pay off that bill in full by the due date.

Balance Transfer Credit Cards

If you’re having trouble paying your bills, you may be able to buy some time by transferring a balance. Read our guide first to make sure you understand the risks of doing a balance transfer, and make sure you have a solid plan for paying off debt before you do it. Then, if you decide a balance transfer might be right for you see our top picks.

What are the Costs of Using a Credit Card at an ATM?

Getting cash from an ATM using a credit card is convenient but comes with very hefty fees that consumers need to consider. Just like debit cards, credit cards are part of specific ATM networks based on the card’s issuer. Using a credit card to withdraw cash from an ATM outside of its network normally incurs a fee from the ATM network. Additionally, businesses that let ATMs operate on the premises can charge an additional fee to consumers who use the ATM. These fees alone can increase the cost of your transaction by two to ten dollars.

Credit card companies also charge fees for cash advances, further increasing the cost. Typically, cash advances cost a flat fee or a percentage of the cash you withdraw from the ATM, whichever is higher. So, if your card charges $5 or 3% for a cash advance and you withdraw $20, you’ll be hit with a $5 fee, which works out to be 25% of your cash advance. If you withdraw $300, your fee will be $9. This means that small withdrawals can be incredibly expensive on a percentage basis.

The last way credit card companies make money on cash advances is through interest. Interest on cash advances tends to be four to five percent higher than the interest on purchase balances. Many cards also start charging interest immediately, rather than waiting until the statement closes and payment comes due. This means you could be hit with a surprise interest bill if you get a cash advance early in your statement, and don’t pay it off right away.

What You Should Know Before Using a Credit Card at an ATM

Before getting a cash advance from an ATM by using your credit card, there are a few things you should know.

What is My Current Card Balance and What is My Cash Advance Limit?

You don’t want to go to an ATM looking for cash and come away realizing that you’ve already reached your card’s limit or you can’t withdraw as much as you actually need. Most cards have a separate, lower limit for cash advances than purchases. The limit can sometimes be raised, however, by calling the card’s customer service line. Therefore, knowing what your cash advance limit is ahead of your ATM visit is extremely important in determining if you need to request an increased line of credit.

What Terms and Fees are Involved?

As mentioned before, card companies charge fees on cash advances. Knowing the exact fees, you’ll be dealing with and the terms of the cash advance, such as when interest will start to accrue, is essential. For reference, the terms may be slightly different for business facing credit cards vs. consumer facing credit cards.

Are There Alternatives to Taking a Cash Advance?

Since cash advances are so costly, you should take time to consider whether there are alternatives to getting one. Asking to borrow some cash from a friend, writing a check, or paying a surcharge to use your credit card instead of getting cash from an ATM can save you money in the long run.

Using your credit card to get a cash advance from an ATM can be a convenient way to get cash in a hurry, but the fees associated with a cash advance means they should only be used when they are truly necessary.

 

References:

[1] Can You Use a Credit Card at an ATM? https://lendedu.com/blog/can-use-credit-card-atm/

[2] Can I Use a Credit Card at an ATM? How Cash Advances Work https://www.creditcardinsider.com/blog/can-use-credit-card-atm-cash-advances-work/

[3] Can I use a credit card at an ATM? https://clark.com/personal-finance-credit/credit-debit-cards/can-i-use-a-credit-card-at-an-atm/