How to Get Money From a Credit Card

Credit cards primarily serve as a convenient tool for purchases and expense management. However, situations may arise where individuals need to access liquid funds directly from their credit card accounts. This article explores common ways to access cash, detailing the processes and financial considerations involved.

Cash Advances

A cash advance allows you to borrow money directly from your credit card’s available credit limit. This differs from a standard purchase because you receive cash rather than goods or services.

You can obtain a cash advance at an automated teller machine (ATM) using your credit card and a personal identification number (PIN). ATMs may have daily withdrawal limits, and transactions are subject to immediate fees. Another option is visiting a bank branch and presenting your credit card and identification to a teller. Credit card issuers also provide convenience checks, which draw funds from your cash advance line and can be used for payments or transfers.

Cash advances incur specific costs. They are subject to a cash advance fee, typically a flat fee (e.g., $5 or $10) or a percentage (commonly 3% to 5%) of the amount advanced. For example, a $100 cash advance might incur a $5 fee.

Additionally, cash advances carry a higher annual percentage rate (APR) compared to purchases, often several percentage points higher. Unlike purchases, which may have an interest-free grace period, interest on a cash advance generally begins accruing immediately from the transaction date. This means there is no period without interest charges on the borrowed amount.

Using Credit Cards for Peer-to-Peer Payments

Many individuals use popular peer-to-peer (P2P) payment applications to send money, and these platforms often allow linking a credit card as a funding source. Applications such as Venmo, PayPal, and Cash App enable users to connect their credit cards to facilitate transfers to friends, family, or for services.

When sending money using a credit card through a P2P app, you select the credit card as your funding source and enter the recipient’s information and amount. While this appears to be a standard payment, credit card issuers generally categorize these transactions as cash advances rather than purchases. This classification has significant financial implications.

Using a credit card for P2P payments usually incurs two layers of fees. The P2P application itself often charges a fee for credit card-funded transactions, typically a percentage of the amount sent, commonly around 3%. For instance, sending $100 via a P2P app with a credit card might incur a $3 fee from the app.

On top of this, because the transaction is treated as a cash advance by the credit card issuer, you will also be charged the credit card’s standard cash advance fee. The higher cash advance APR also applies immediately, with interest accruing from the transaction date. These combined fees and immediate interest charges can make using a credit card for P2P payments expensive.

Requesting an Overpayment Refund

An overpayment occurs when your credit card account shows a negative balance, meaning you have paid more than the outstanding amount due. This can happen for several reasons, such as making a payment larger than your balance, receiving a refund for a returned item after you have already paid off the original purchase, or due to a billing error where an extra charge was reversed. Identifying an overpayment is straightforward, as your monthly statement or online account portal will display a credit balance, usually indicated with a minus sign or parentheses.

If your credit card account has a negative balance, you are entitled to request a refund of the overpaid amount. To initiate this process, you will need to contact your credit card issuer directly. This can typically be done by calling the customer service number on the back of your card, using a secure messaging system through your online account, or sometimes through an online portal request.

Credit card companies generally process overpayment refunds in a few ways. They may mail a check to the address on file, issue a direct deposit to a bank account linked to your credit card for payments, or in some cases, apply the credit to another credit card account you hold with the same issuer. This method of obtaining money from a credit card is distinct from cash advances because you are simply retrieving your own funds that were mistakenly or incidentally overpaid, rather than borrowing new money from your credit line.