Can I use a Credit Card at an ATM?

Much like debit cards, you can use most credit cards at ATMs. However, you will most likely be charged a cash advance fee along with interest on whatever money you pull out of the ATM, making it a potentially costly transaction.

You need a PIN

To protect your card in the situation that your credit card is stolen, you need a PIN to pull cash out of your account. This is a beneficial protection feature because of how untraceable the cash would become. When you make a purchase directly with the credit card, it appears on your account, and you can cancel the card, disabling future use of the card. However, if someone takes a cash advance using your credit card, there is no way to stop the transaction, and this money becomes easy to use and untraceable. This is why you need a PIN to pull money out of an ATM with your credit card. Most times you will have to set up a PIN when you set up your credit card; however, if this is not the case, simply call your credit card company, provide your proof of ownership, and create a four-digit personalized code. Then, when you pull cash out of an ATM, you will be asked to type in this code.

Steps

The process of making a cash advance can be relatively complicated, making it less effective than debit cards to withdraw cash. First, you should check your account in order to ensure that you are in good standing. If you are behind on your payments or if you have a large balance and the bank is questionable that you can pay, then it is unlikely that the bank will grant you a cash advance from an ATM.

Secondly, you should research the terms and rates of cash advances for your specific credit card. Often, credit cards will charge you a cash advance fee of either $10 or 5% depending on whichever is greater. Thus, you are usually charged a hefty fee whenever you pull money out. Also, you will receive a separate cash advance APR if you do not pay back your cash advance on time. Interest rates of cash advances are higher, making it imperative that you pay off your cash advance promptly in order to avoid large interest rates.

The average interest rate for cash advances is around 24%, which is about 5-6% higher than you will have for purchases, which is why it is usually better to make purchases directly with your credit card instead of pulling out money in an ATM.

The next step is to find an ATM, preferably one issued by the bank that issues your credit card. If you use an ATM that is from a different bank, both banks will likely charge you a 2-3% fee on your cash advance, making it extremely costly.

Most banks will give you a full list of locations with ATMs on their website. Thus, you should research where the nearest ATM is to you so that you can save time.

When you find the ATM, you simply need to insert your credit card and enter your PIN. When you do that, a list of options will appear on the screen, and you should choose the cash advance option.

Many times, a warning will appear on the screen asking if you will accept the extra fees. In order to receive your money, you must accept these fees. If you do not accept the fees, then your transaction will be canceled, which is why cash advances can be costly.

After you complete these steps, your cash should be dispensed from the machine. Once you receive your cash, you need to ensure that you finish the transaction and take your credit card back. This prevents anyone behind you from being able to use your credit card or credit card information and steal money.

Reasons to not make Cash Advances 

You should know that you will most likely not receive points for any of your cash advances. Most rewards cards specifically list types of transactions that do not provide points. Cash advances are usually among these transactions, which is another reason it is better to directly make purchases with your credit card. You should only pull money out of an ATM if you have to because you are charged high fees, and you do not receive points.

Also, cash advances are usually bad signs to lenders and could result in a lower credit score. People normally only make cash advances when they are desperate, which can be a bad sign for lenders. Banks do not like risky investments, which is why they charge fees for cash advances in order to disincentivize you from making them.

There is also a cash advance limit and no grace period. Usually, the credit line extended by credit card companies only reaches a certain fraction of your income, meaning that you can only pull a certain amount of money out of an ATM. Also, purchases usually have a grace period before they start charging interest. However, cash advances often will charge interest immediately, making it necessary to pay off your cash advance debt as quickly as you possibly can.

Conclusion

In conclusion, you can use your credit card at an ATM, but it can be costly to do so. Making purchases directly with your credit card will charge fewer fees, smaller interest, give rewards, and not damage your reliability. It is a relatively simple process to pull cash out at an ATM through a cash advance, but it can also be a very costly one.