How do you get cash with a credit card

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Getting cash from your credit card is called a cash advance. A cash advance borrows money from your credit card account instead of using the credit to buy something. This option can be helpful if you find yourself in an emergency and need cash.

A Federal Reserve study in 2017 stated that 44% of adults could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money. This is an improvement from the 50% of adults who weren't ready for emergency costs when asked in 2013. If at all possible, it's critical to have emergency cash on hand for when life delivers an unexpected situation.

Getting cash from your credit card is simple and here are the steps to take:

1. Check your latest statement to confirm how much cash you can take out. Your cash advance limit can vary depending on the type of card you have.
2. Read the terms of your agreement so you understand if there are fees associated with taking out cash. Usually, there is a one time fee plus interest, and rates are often higher for cash advances than when you charge purchases.
3. Know your personal identification number or PIN number that was assigned to your credit card.
4. Withdraw money from an ATM where your credit card is accepted. Select "credit" when prompted to make a withdrawal from checking, savings or credit.
5. Go to a bank to withdraw money against the limit on your credit card. Check that the bank offers advances from your credit card issuer, such as Mastercard or Visa.

Can I Get a Cash Advance Online?

Another way to receive cash is through a cash advance loan online. An online cash advance loan works when you apply with an online lender for a short-term loan. You fill out an online application and once approved you find out how much money you qualify for.

That money can then be used as an emergency fund to pay off those unexpected bills or expenses. The payment for a cash advance loan can include a fee on top of the monthly payment that is due.

Are Cash Advances a Bad Idea?

Many personal finance experts caution that cash advances from your credit card can be a bad idea and suggest to only use them in an emergency situation. Cash advances from your credit card can be a really expensive short-term loan as the current average interest rate for cash advances is 23.7%, according to CreditCards.com.

Notably, credit reports do not indicate when a cash advance is taken against a credit card account; so cash advances do not directly affect your credit history (as long as you pay them back in a timely manner).

Should I Get a Cash Advance From My Credit Card?

You should ask yourself some questions before getting a cash advance:

• Is the cash advance an emergency to take care of a bill or expense?
• Can you pay the money back in a month or in a few months?
• Can you borrow money from a friend or family member?
• Do you really need to buy what you are about to buy?
• Do you need help improving your personal finance habits?

The more you can learn more about credit, finances and budgeting could help to improve your own situation in the short term versus taking on extra debt.

Whether it's because money's tight or just out of curiosity, consumers sometimes wonder how to get cash from a credit card. You can use a credit card for most purchases, but there are also bills that can only be paid in cash.

Most credit card companies let you withdraw cash with your card. This feature is called a credit card cash advance, and it's like taking out a loan against your credit limit. There are some notable drawbacks, specifically high interest rates and fees, so it's generally not recommended if you have other options.

In this guide, we'll go over how cash advances work in case you ever need to use one, and then go over some of those other options you could consider first.

How to get cash from a credit card

Here's how to get cash from a credit card through an ATM:

1. Insert your credit card into the ATM.
2. Enter the PIN for your credit card.
3. Choose the "cash advance" option.
4. Select the amount of cash you want.
5. Confirm the transaction.

An ATM is usually the easiest way to get a cash advance, and the process is similar to how a debit card withdrawal works. However, you need to have your credit card's PIN for this method. If you don't have this or your card didn't come with a PIN, you can contact the card issuer to set it up.

Before you get a cash advance, confirm that your card offers this feature and check what its limit is. Credit cards have a separate cash advance limit that's smaller than the credit limit.

Here are a few other ways to get cash advances:

• Ask your card issuer for convenience checks. These are checks you can write that are tied to your credit card account.
• Purchase a money order with your credit card.
• Wire money to yourself through a money transfer service, such as Western Union, and pay with your credit card.

Keep in mind that none of those options will get around cash advance fees. Since they're still considered cash advances, they have the same drawbacks.

Drawbacks of a credit card cash advance

Credit card cash advances have three significant drawbacks:

• They include fees. These fees are typically around 5% of the transaction amount with a minimum of $10.
• They have high interest rates. Most credit cards have a separate APR (interest rate) specifically for cash advances. The cash advance APR is almost always higher than the purchase APR, with many cards charging about 25%.
• Interest charges start immediately. While purchases have a grace period before accruing interest, cash advances don't. The card company will start charging you interest right away.

To put this all into perspective, let's break down the typical costs of a $1,000 cash advance. The fee would cost you $50 right off the bat. There's also the immediate interest charges. With a 25% APR, one month would add about $21 in interest.

Learn more: How Does Credit Card Interest Work?

That's a total of $71 in fees and interest, assuming you pay off the cash advance in a month. If you need more time, that cash advance APR will keep costing you more.

Cash advances may be your best option in emergencies. They're certainly better than borrowing money from a predatory lender, such as a payday lender that charges extremely high interest rates.

But before you go with this option, it's worth seeing if any alternatives work for your situation. There are apps that offer a free cash advance with no credit check. Or, you could potentially get money from your credit card without paying cash advance fees and interest.

Other ways to get cash from your credit card

Depending on what you need the money for, it might be possible to get cash from your credit card and have it processed as a purchase, not a cash advance. Here are the best ways to do this.

Buy prepaid gift cards

A popular method is to use a credit card to buy a prepaid gift card, and then using the prepaid card to buy a money order. Some websites and stores sell these cards for a small fee, such as $5.95 for a $500 gift card.

The tricky part is buying the money order. Not every merchant will let you purchase a money order with a prepaid card, but many major retailers and grocery stores do. Once you have the money order, you can make yourself the recipient and convert it to cash.

For an example of how this works, imagine you use your credit card to buy a $500 prepaid gift card. With the fee, it costs you $505.95. After that, you buy a money order, which costs about $1.

You end up with $499, and all it took was one purchase of $505.95. That's a small price to pay, and since it was a purchase, you don't get charged the cash advance APR. With rewards credit cards, it can even be possible to break even or come out ahead on fees because of the rewards earned on the purchase.

Send money with a payments app in exchange for cash

Several of the top payments apps let you send money to family and friends with a credit card for a fee, which is usually 3% of the transaction. You can do this with the following apps:

• Venmo
• PayPal
• Cash App

If you know somebody who doesn't mind helping you out, you could pay them through an app and ask them to withdraw the money for you. For example, you send your best friend $300 through Venmo, and then they withdraw $300 from their bank account to pay you back. With a 3% credit card fee, this would cost you $9.

This technically isn't how these payment apps are supposed to be used, as they're not intended for cash advances. But it's unlikely to be an issue when you're sending money to someone you know first, especially if it's a one-time thing.

Pay bills with Plastiq

Plastiq is a service that lets you pay almost any bill using your credit card. How it works is simple:

• On the Plastiq website, you provide the recipient information and the amount you're paying them.
• You can pay by credit card for a 2.85% fee.
• Plastiq then sends the money to the recipient as a check or an ACH transfer, depending on what you choose.
• You can also have Plastiq wire the money, although that has an additional fee.

While Plastiq doesn't let you send money to yourself, you can use it to cover bills that don't accept credit card payments. Many people use it to make their rent or mortgage payments this way.

Even though credit cards aren't intended to be a way to get cash, you can use them like this in a pinch. Whichever method you choose, make sure you only borrow as much as you need, and aim to pay it back as quickly as possible.

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