A credit card cash advance lets you use your credit card to withdraw cash. The money is borrowed from your total line of credit. More companies are offering credit card advance options because it is becoming rarer for individuals to carry cash. Smaller businesses still require you to have cash, but you cannot always stop by a bank to prepare for these purchases. As long as your credit card has a PIN, you can go to any ATM to withdraw cash from your credit card.
While it is convenient to withdraw credit card money, there are some downsides. You must pay a cash advance fee whenever you want to withdraw cash from your credit card. The fee varies depending on the company. Some companies charge a flat rate between $5 to $10 for each advance. Other credit card companies charge you a percentage of how much you withdraw, on average around 3 to 5 percent. Listed below are some of the best credit cards for cash withdrawal options and how to perform a withdrawal.
Withdrawing Cash from your Credit Card
The first step to making a credit card cash advance is checking whether cash advances are allowed. The majority of credit cards allow you to withdraw cash from your balance, but there are some cards without this option. For example, most starter credit cards do not have a cash withdrawal option. Once you know a cash withdrawal is an option, you must find an eligible location.
Most credit card advances are performed at an ATM, but some cards allow you to complete the withdrawal at the bank. In order to withdraw cash from an ATM, your card must have a PIN. On top of the cash advance fee, some ATMs have a service fee to withdraw cash from a credit card. Because of this, it is best to go to your bank whenever possible. Banks are also upfront about whatever fees you must pay, while an ATM includes the service charge after the transaction.
When you withdraw credit card money, your account is charged like you made a traditional credit card purchase. This means your maximum credit limit is decreased by the amount you withdraw, and the money you withdraw will accrue interest the moment it leaves your credit card account.
Another credit card cash advance option is to use a convenience check. This service is only offered by select credit cards. These companies send you several convenience checks when you open your account. These checks are meant to be used in emergency situations, such as paying for an unexpected medical bill.
DCU Visa Platinum
In terms of credit card cash credit options, no card beats the DCU Visa Platinum. The Visa Platinum does not charge any fee for cash advance. It also does not have any annual fees. However, the card does not have any other reward perks or a sign-up bonus. If you live near smaller stores that prefer cash, it is worth applying for a Visa Platinum card.
The best ways to get cash from a credit card are through Capital One. All of the Capital One cards have lower than average fees, in addition to other benefits. The QuicksilverOne card has either a fee of $10 per withdrawal or 3 percent, whichever is higher. Unlike other companies, the rate never increases with larger withdrawals. It also has a low annual fee and lets you earn 1.5 percent cash back on all your purchases.
Another capital one cash advance option comes from the Venture Rewards card. It features the same cash advance fees as the QuicksilverOne, but it provides additional benefits. As a sign-up bonus, you can get 50,000 bonus miles once you spend over $3,000 within the first three months. You also earn doubles the miles for each dollar spent on a charge. The Venture Rewards card does have a higher annual fee than the QuicksilverOne card.
Discover Cash Back
Discover cash advance allows you to withdraw money from ATMs and credit unions, as well as letting you transfer cash directly into a checking account. Since most other credit cards do not have this option, Discover is one of the most versatile credit cards. Discover charges a small transaction fee, which is noted in your cardmember agreement. Discover allows you to earn 5 percent back on purchases at Amazon, most grocery stores, restaurants, gas stations and PayPal transactions. You earn 1 percent back at any other location.
Discover also offers a credit line advance through convenience checks. This is helpful if you normally use credit card advances to withdraw large sums. Using a check is more convenient since you can specify the exact amount you want without having to go to a bank. There are also fewer service fees when you use a Discover convenience check.
Personal Loans vs. Credit Card Advances
A credit line advance can sometimes be used over a personal loan. The biggest disadvantage with a credit card cash advance is you are limited by your total line of available credit. Not only does this keep you from withdrawing large amounts, but it also means you are unable to use your credit card again until you pay back the money. There is also no cash out credit card online option, so you are limited to making withdrawals at an ATM or bank.
A credit card advance is much quicker than a personal loan, and it does not require you to go through a lengthy application process. Personal loans also have much higher interest rates, as the goal of the lender is to make a profit by charging you over a long period of time. You may end up spending hundreds in interest fees for a personal loan, while withdrawing from your credit card only costs a few dollars.
Another benefit when you withdraw credit card money versus taking out a loan is no limitations. With a personal loan, you must justify what you are going to spend the money on. Some loans allow you to spend the money on whatever you want, but most set strict limitations on how you use the loan.