How to Get Money on a Credit Card & What to Know

Credit cards are primarily designed to facilitate purchases, allowing consumers to defer payment or earn rewards. However, these financial tools also offer specific mechanisms through which cardholders can access cash or direct funds from their available credit line. Understanding these methods is important, as they operate differently from standard purchase transactions.

Cash Advances

A cash advance allows you to withdraw a portion of your credit limit as immediate cash. Before initiating a cash advance, it is important to know your specific cash advance limit, which is often a subset of your overall credit limit and can be considerably lower. For ATM withdrawals, a Personal Identification Number (PIN) is required. Cash advance transactions generally incur a fee at the time of the transaction.

One common method for obtaining a cash advance is through an Automated Teller Machine (ATM). You would insert your credit card, enter your PIN, select the “cash advance” or “withdrawal from credit” option, and then specify the desired amount. Alternatively, you can obtain a cash advance directly from a bank teller by presenting your credit card and a valid form of identification. Some credit card issuers also permit cash advances to be deposited directly into your linked bank account via their online portal or a phone request.

Interest on cash advances typically begins accruing immediately from the transaction date, unlike credit card purchases which often come with an interest-free grace period. The fees associated with cash advances commonly range from 3% to 5% of the transaction amount, or a flat minimum fee. These fees are added to the cash advance balance, further increasing the total amount owed.

Balance Transfers to Your Account

Some credit card issuers provide an option to transfer a balance directly to your checking or savings account. This differs from a standard balance transfer, which is used to consolidate debt from one credit card to another. To be eligible, you must have sufficient available credit on your card to cover the transfer amount and any associated fees. You will also need your bank account details.

Initiating a balance transfer to your bank account can often be done through your credit card issuer’s online portal. You would navigate to the balance transfer section, select the option for transferring funds to a bank account, and then input the desired transfer amount. Alternatively, you can contact your credit card issuer’s customer service department by phone to request and facilitate the transfer.

Balance transfers to your account typically involve a fee, commonly ranging from 3% to 5% of the transferred amount. Some credit card offers may include promotional 0% Annual Percentage Rate (APR) periods for balance transfers, which means no interest accrues on the transferred amount for a set duration. However, after this promotional period ends, any remaining balance will be subject to the standard, often higher, cash advance APR. New purchases made on the card during a promotional balance transfer period may not benefit from the 0% APR and could begin accruing interest immediately at the regular purchase APR.

Credit Card Convenience Checks

Credit card convenience checks are pre-printed checks linked to your credit card’s credit line. These checks function similarly to personal checks but draw funds directly from your available credit rather than a bank account. You can determine if you have these checks by reviewing your statements or contacting your issuer. Convenience checks may have a separate, lower limit than your overall credit limit.

To use a convenience check, you fill it out much like a regular check. The check can then be deposited into your own bank account. While some banks may allow you to cash these checks directly, depositing them is generally the more straightforward method. These checks can also be used to pay bills or make payments to individuals or businesses that do not accept credit payments directly.

Transactions made with convenience checks are almost always treated by the issuer as cash advances. Consequently, convenience checks typically incur a cash advance fee upon transaction, and interest begins accruing immediately from the date the check is processed, without the benefit of a grace period.

Financial Implications of Accessing Funds

Accessing funds directly from a credit card carries financial implications. The Annual Percentage Rate (APR) applied to these transactions is typically higher than the APR for purchases on the same card. This elevated interest rate means the cost of borrowing cash is generally more expensive than the cost of financing typical purchases.

Interest on cash advances and convenience checks usually begins accruing immediately from the transaction date. Unlike purchases, which often have a grace period before interest is charged if the full statement balance is paid by the due date, cash advances offer no such reprieve. This immediate interest accrual contributes to the rapid growth of the outstanding balance. In addition to interest, these transactions also involve various fees, which are added to the principal, increasing the total debt from the outset.

Using a significant portion of your available credit limit for cash advances or balance transfers can also impact your credit utilization ratio. This ratio, which compares your outstanding credit card balances to your total available credit, is a major factor in credit scoring. A high utilization ratio can negatively affect your credit score, potentially making it harder to obtain new credit or secure favorable terms in the future. Credit card payments are often allocated to balances with the highest APR first, meaning your minimum payments might prioritize the higher-interest cash advance balance.