Can credit cards be used at ATMs?

credit-card-handEver needed cash in a hurry and wondered if you could get it from your credit card at an ATM? In most cases, you can. But don’t do it unless it’s a real emergency.

Almost all Visa, Mastercard, American Express and Discover credit cards will allow you to get money via an ATM. It’s called a cash advance. In order to get a cash advance, you will need to have a PIN number set up with your card’s bank. You may have been given this PIN when getting the card; if not, you’ll need to request it. Some banks will let you retrieve or set a PIN online, while others will only mail it to you. So, if you think you’ll ever need this service, you’re best off finding out your PIN in advance.

Getting a cash advance on your credit card is a terrible idea, which is why we say only use it in an emergency. Here’s why: a cash advance almost always has a higher interest rate than the rate you pay on credit card purchases, plus it offers no grace period to pay off the amount you’ve withdrawn — you begin paying interest from the day you take out the cash from the ATM.

For example — and not to pick on any one issuer because they are all similar in this regard — say you have the Capital One QuickSilver Card. Looking at the card’s terms & conditions, you will see that the interest rate on purchases could be as low as 14.74% while the interest rate on cash advances is 24.74%, a full 10 percentage points higher. And, if you take a cash advance today, you’ll start paying interest tomorrow. If you took out a $200 cash advance from an ATM with this card, you’d have roughly 13 or 14 cents interest tacked on tomorrow and the next day and the next day. If you wait until your bill is due to pay it off, you could easily pay an extra $4 to get that $200 cash advance. And, if you don’t pay off your complete card balance each month, this just grows and grows.

One other note, because people can get confused. You can not take a cash advance with a store credit card that is not a Visa, Mastercard, American Express or Discover. For example, you can’t use a Home Depot credit card at an ATM. On the other hand, you could use a Walmart Mastercard at an ATM.

Bottom line: getting cash from your credit card at an ATM is a bad idea, but it can definitely be done.