Withdrawing Cash from Credit Card at an ATM

 New users of banking instruments often have several questions in mind including:

  • Can you use a credit card at an ATM?
  • Can you withdraw cash from a credit card?
  • Can I withdraw money from credit card?
  • Can you take cash out of a credit card?

Before we learn the answer to the question “can you use a credit card to withdraw cash at an ATM? It is important to learn the difference between a credit card, debit card and an ATM card.

What is a credit card? how is it different from a debit card?

A card credit is issued by the bank to a card holder that can be used to pay for any merchandise, shopping etc. It is different from a debit card in the sense that with a credit card you 'borrow' money that you will repay later. You can borrow any amount of money as long as it is within your 'credit card limit'. A debit card deducts that amount from your associated account. Once you make a purchase the merchant sends in the transaction to the bank and that amount of money is transferred from your checking account to theirs. Another difference is that there is no interest to be paid upon using a debit card, whereas credit cards have a high interest rate. 

What is an ATM?

An ATM is a money vending machine which is installed by a bank inside its premises or any other public place like fuel station, hospital, shop, market etc. From this machine you can withdraw money in hard cash form, or you can transfer money, pay bills, know about account balance and perform various other functions using a plastic card known as ATM card or debit card. ATM is the abbreviation for ‘automated teller machine’ or ‘automatic teller machine’. It not only allows the ease and security of not carrying too much cash all the time but also allows one to make any basic transactions without having to go to a bank to withdraw money from their account. An ATM allows you to withdraw money from your account even if in another country. 

The question is:
Can you use a credit card at an ATM to withdraw money?

Yes, a credit card can be used at an ATM to withdraw cash. But this comes with a cost, since the fees and interest rates are very high. Upon receiving the credit card, check the cardholder or letter with it to see if 'cash advance APR' and/or 'cash advance fee' is mentioned. If yes, then the credit card is valid for use with an ATM as per the fee mentioned. Usually these are high and it is always more advisable to use a debit card at the ATM. A 'Cash advance credit card limit' will also be mentioned that determines how much cash can be withdrawn from the ATM using that credit card. Depending on the Cash advance fee you will owe a certain amount extra over what you actually withdraw. For example, on a withdrawal of $500 with a fee of 5%, the total you owe will be $525. Adding to that will be the interest should you delay the repayment. The interest rate is very costly and further goes in the favor of using debit card at the ATM.

Like a debit card, a PIN is also needed for using the credit card at the ATM. This will either be issued to you when the card arrives or you will have to request it from the bank that issued the card. Upon the request, it will be activated in approximately 7 to 10 days. 

However, credit cards are definitely safer than carrying cash. Because in case if you even lose the card, it can be blocked or deactivated immediately but if cash is lost then there are no returns on that. Using a credit card can also help build your credit rating. This is just like 'putting in a good word' for you at the bank so further services are available to you. Loans get approved easily and so on. Another benefit of using credit cards is that in case you are unsatisfied with the product you purchased, you can request a 'charge back' through your card. Hopefully this article helps you with the question “Can you use a credit card at an ATM?”. Feel free to ask questions in comments section if any.