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Can I take cash out with a credit card?
Have you ever been in a situation where you’re pressed for cash between paydays and you’ve considered taking cash out with your credit card? On the other hand, perhaps you just left your debit card at home and only have your credit card with you.
There are plenty of situations where it may be tempting to use your credit card to take cash out, but it’s really something you should avoid. And if you have to, it’s not something you should make a habit of.
It will leave you out of pocket
The vast majority of credit cards will charge you for taking cash out at a hole in the wall. If you do take out cash with your credit card, you can expect to pay:
- A one-off charge for cash withdrawals – usually around 1 to 3% of the money you withdraw. Many credit cards have a minimum charge of £3.
- Interest on the money you take out. This is often charged from the day you take the cash out, so you don’t get the typical 45 to 60-day interest-free period that you get when you pay for something directly with your credit card.
- Another one-off charge if you take cash out abroad. This can be as much as 3% of the cash you take out.
It’s important to remember that different credit card providers will have different rules about cash withdrawals, and some may be more strict than others. In certain cases, taking cash out with your credit card could even damage your credit history.
This is why it’s worth checking the terms of your credit agreement to see how a cash withdrawal is treated by your lender.
Keeping an eye out for cash advances
On your credit card terms and conditions, you’ll probably see something called a cash advance referenced quite often. This is the official term given for when you take money from your credit card balance to get or transfer actual cash. This can be in the form of:
- Withdrawing cash from a cash machine
- Buying foreign currencies
- Transferring cash from your credit card account to another online account (whether to a friend or your own online banking account)
- Buying Traveller’s Cheques
Essentially, any transaction where you receive money is called a cash advance. Credit cards are generally used to purchase goods and services, and overall they’re not intended to be used in a way that means you can withdraw the credit card balance.
If you think you might be tempted to take cash out…
Some types of credit cards – like money transfer cards – are designed so that you withdraw cash from the credit card and pay an interest rate on the money you take out until it is repaid. This works in many ways like a loan, but is one of the only situations where you should be considering taking out cash with a credit card.
Other credit cards may allow you to make cash advances for a smaller fee, so if you think you might be tempted to withdraw cash with your credit card; it might be a good idea to try to find one offering this instead.