If you need money in emergencies and can’t get it from anyone else, you can use your credit cards to get a cash advance. So if you’re wondering: Can you use a credit card at an ATM, Hanfincal will provide the answer in this article.
1. A cash advance definition
A cash advance is a short-term cash loan obtained by using your credit card at a bank or ATM. In other words, a cash advance occurs when you withdraw money from an ATM using your credit cards rather than your debit cards or ATM cards.
2. Can you use a credit card at an ATM?
You can use a credit card at any ATM to withdraw cash. Whether at a bank or other financial institution, ATMs are set up to allow you to conduct many transactions, including taking out a cash advance with a credit card.
3. How to get cash from a credit card at an ATM?
If you have a PIN, you can get cash from a credit card at an ATM by following 6 steps:
- Step 1: Insert your card into an ATM.
- Step 2: Enter the PIN.
- Step 3: Choose “cash withdrawal” or “cash advance.”
- Step 4: Select the “credit” option (if any).
- Step 5: Enter the amount you want to withdraw.
- Step 6: Accept any fees associated with the transaction. Finish the transaction and collect your cash.
If you did not receive a PIN when you opened your credit card account, you can contact the credit card issuer and request one. You may have to wait a few business days for the PIN.
4. The costs of using a credit card at an ATM
Using a credit card at an ATM is expensive, you have to face 3 different fees below:
- ATM fees: This fee is levied by the financial institution that handles the transaction — the owner of the ATM or the bank from which you obtained your advance. Moreover, businesses that allow ATMs to operate on their premises may charge customers who use the ATM.
- High interest rate: Cash advance interest rates are typically 4 to 5% higher than purchase balance interest rates. Moreover, interest starts accruing right away because cash advances don’t have grace periods.
- Cash advance fees: When a cardholder withdraws money from an ATM, the credit card company typically charges a one-time fee of 3% to 5% or $8 to $10 (whichever is greater). The exact fee will be specified in the terms and conditions of the card. For example, if you obtain a $1000 cash advance. The issuer will charge a fee ranging from $30 to $50.
5. Alternatives to using your credit card at an ATM
There are 7 alternatives to using your credit card at an ATM that you need to know:
- Regular credit card spending: Use your credit card to pay for things whenever possible, whether online shopping, supermarket, or utility bills. That way, you’ll be able to keep your cash on hand for situations where cards aren’t accepted.
- Loans from friends or family: You may be able to obtain a loan from a friend or relative. However, you must treat your loan the same manner as you would a bank loan.
- A personal loan: The interest rate for borrowers with excellent credit is almost always lower than the average credit card rate. Even if you don’t have a high credit score, you might find that rate significantly lower than when using a credit card cash advance. In case you want to get more credit scores, here’s the best way to do online. It’s entirely FREE!
- Using your emergency fund: According to many financial experts, you should have three months’ worth of expenses set aside to cover unexpected costs. As a result, you can limit cash advances in emergencies.
- Lending circle: A lending circle allows you to borrow money while paying little to no interest—and your credit score may even increase as a result.
- Credit card installment plan: A credit card installment plan is when you agree in advance to pay for a purchase in equal monthly installments over a set number of months. If you have the option, look for stores affiliated with your card’s issuer to maximize your savings.
- Debt consolidation: A debt consolidation loan combines existing debts into a new loan with a lower interest rate than the current debt.
A cash advance should be the last choice when you have no better solution. If you need to use your credit card at an ATM to withdraw cash, you must understand the fees. All of the valuable information Hanfincal provides above can assist you in taking notes on this topic. Furthermore, if someone asks you, “Can you use a credit card at an ATM?” We hope you can respond and help them understand the reality of a cash advance.
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