How to Use an ATM With a Credit Card

Using a credit card at an automated teller machine (ATM) offers a way to access cash from your credit line. While credit cards are primarily designed for purchases, they can also facilitate cash withdrawals, known as cash advances. This process differs significantly from using a debit card, which directly accesses funds from your bank account. The following information details these distinctions and associated financial implications.

Understanding Credit Card Cash Advances

A credit card cash advance involves borrowing cash directly from your available credit limit. This transaction functions like a short-term loan, distinct from standard credit card purchases. Cash advances carry higher costs and immediate financial repercussions.

Two primary types of costs are associated with a cash advance. First, a cash advance fee is imposed by the credit card issuer, often calculated as a percentage of the transaction amount, ranging from 3% to 5%. Some issuers may levy a flat minimum fee, such as $5 or $10. This fee is added directly to your outstanding balance.

Second, interest accrues immediately from the transaction date on a cash advance, unlike typical purchases which benefit from a grace period. The annual percentage rate (APR) applied to cash advances is higher than the APR for standard purchases. This immediate and elevated interest rate increases the total cost of borrowing.

A credit card cash advance differs from a debit card withdrawal. A debit card accesses funds already present in your checking or savings account, incurring no interest or cash advance fees. Conversely, a credit card cash advance is a form of debt, utilizing your credit line and immediately incurring fees and interest charges.

Preparing for an ATM Cash Advance

Before initiating a cash advance at an ATM, ensure you have a Personal Identification Number (PIN) for your credit card. Unlike retail purchases that often only require a signature, ATM transactions require a PIN. If you do not have a PIN or have forgotten it, request one from your credit card issuer through their online portal, mobile app, or customer service.

Determine your specific cash advance limit, as this is a subset of your overall credit limit. This information is available on your monthly statement, within your online account, or by calling the card issuer’s customer service department. Exceeding this limit will result in a declined transaction.

Beyond the credit card issuer’s cash advance limit, ATMs may impose daily withdrawal limits. These limits vary by ATM operator or financial institution, ranging from a few hundred to over a thousand dollars. Confirming these limits prevents issues during the transaction.

Finally, verify your current available credit to cover the desired cash advance amount, fees, and immediate interest. Accessing your credit card account online or via mobile app provides a real-time view of your available credit. Confirming these details ensures a smooth transaction.

Executing an ATM Cash Advance

Locate an ATM displaying your credit card’s payment network logo (e.g., Visa, Mastercard, American Express, Discover). Insert your credit card into the designated slot.

The ATM will prompt you to enter your four-digit Personal Identification Number (PIN). After entering your PIN, the machine will present transaction options.

Select the “Cash Advance” or “Withdrawal from Credit” option. Avoid selecting “Checking” or “Savings,” as these options are for debit card transactions linked to bank accounts. Choosing the incorrect option will result in a declined transaction.

Enter the desired cash amount. Ensure this amount is within your card’s cash advance limit and the ATM’s daily withdrawal limit. The ATM will display a transaction summary, including the amount and any ATM operator fees. Confirm the details before proceeding.

After confirming the transaction, the ATM will dispense the cash. Collect your cash, credit card, and transaction receipt. The receipt provides a record of the transaction for tracking.