Can You Withdraw Money From an ATM With a Credit Card?

A credit card cash advance allows you to obtain physical currency directly from your credit card account. This action, formally known as a cash advance, lets you borrow against your available credit line. It represents a short-term loan that draws from your existing credit limit.

How to Obtain a Cash Advance

To obtain a cash advance at an ATM, insert your credit card and enter your Personal Identification Number (PIN) to authenticate the transaction. The ATM menu will typically present options such as “cash withdrawal” or “cash advance.” Select the appropriate option and input the desired amount of cash you wish to withdraw, ensuring it falls within your card’s cash advance limit and the ATM’s daily withdrawal limits. The ATM will dispense the requested cash.

Understanding the Costs

Credit card cash advances are a costly option for obtaining funds. A primary cost is the transaction fee, which is typically either a flat amount, such as $5 or $10, or a percentage of the advanced amount, commonly ranging from 3% to 5%, with the greater of the two usually applied. For instance, a $100 cash advance with a 5% fee and a $10 minimum would incur a $10 fee.

Another significant cost is the interest accrual, which begins immediately from the date of the transaction. Unlike standard credit card purchases that often have a grace period before interest charges apply, cash advances typically do not offer this benefit. The Annual Percentage Rate (APR) for cash advances is generally higher than the APR for regular purchases, often ranging from 20% to 30% or more. This higher interest rate, combined with immediate accrual, means that even a small cash advance can become expensive quickly if not repaid promptly.

Key Differences from Other Transactions

A credit card cash advance differs significantly from other common financial transactions, particularly standard credit card purchases and debit card withdrawals. For credit card purchases, interest typically begins to accrue only after a grace period, provided the full statement balance is paid by the due date. This grace period does not apply to cash advances. Furthermore, cash advances incur specific transaction fees, which are generally not associated with credit card purchases.

Comparing a cash advance to a debit card withdrawal also highlights important distinctions. When you use a debit card, you are accessing your own funds held in a checking or savings account, meaning there is no borrowed money and thus no interest charges. Conversely, a credit card cash advance is a form of borrowing, and it is subject to both interest and fees, as it is not drawing from your personal bank balance.

Limitations on Cash Advances

Credit card cash advances are subject to restrictions which limit the amount of cash you can obtain. Credit card issuers set a specific cash advance limit, which is typically a fraction of your overall credit limit, often ranging from 20% to 50%. This means you cannot access your entire credit line as a cash advance. Additionally, ATMs often impose their own daily withdrawal limits, which can further restrict the amount of cash available in a single transaction.

Taking a cash advance immediately reduces your available credit on the card, similar to a regular purchase. Not all credit cards permit cash advances, and some issuers may even allow cardholders to disable or set a very low limit for this feature. Understanding these limitations is important before relying on a cash advance for immediate funds.