Getting money from a credit card is not the same as getting money from a debit card. While consumers use the cards interchangeably, there are differences worth noting.
Sometimes, credit card holders need money in a pinch. When this happens, they usually head to the ATM for a cash withdrawal. However, which card is best to use at the ATM? While a debit card is the best choice here, not everyone has one. Those who only have credit cards can still withdraw money but consequences are different than when using a debit card at an ATM. How someone gets cash from a credit card is different than getting money from a debit card.
When to Get a Cash Advance When credit card holders need money in a pinch, they immediately look for an ATM. Not all stores and vendors take credit cards. Even today, there are many cash-only establishments. A cash advance on a credit card is similar to purchasing a product with a credit card. The money is not immediately withdrawn from the bank account like a debit card purchase would be. Instead, the money is added to the credit card balance where interest is charged until the amount is paid off.
Where to Get a Credit Card Cash Advance There are two primary places to get a cash advance. The first is at an ATM. This is the easiest place to go since most ATMs are available 24 hours a day, with many having outside access. To get a cash advance from an ATM, consumers need a personal identification number (PIN) attached to the credit card. The other place to get a cash advance is at the bank teller's window. This, of course, is not as convenient as going to an ATM because banks are not open all the time. If consumers need to withdraw money when the bank is closed and don't have a PIN connected to their credit card, they are out of luck. When visiting the bank teller's window for a cash advance, consumers need to show a form of ID. Consumers also need to visit banks that are within the credit card cash advance network. It pays to check before heading to the bank.
Other Ways to Get a Cash Advance Some credit cards have convenience checks that are tied to credit card accounts. Consumers can write this check to themselves to withdraw money from their credit card account. This way of receiving a cash advance carries the same types of fees as doing it from a bank or an ATM. Consumers who have secure cards should check with their bank to ensure that they can initiate a cash advance.
Why a Cash Advance Should Be Done Only in an Emergency Consumers should understand that cash advances from a credit card should only be done in the case of an emergency. It is not something to do at a whim because one is hungry and sees a hot dog cart. Cash advances are expensive. It is one of the most expensive ways to withdraw money. Most credit cards charge a flat cash advance fee while others charge a percentage of the cash advance. The interest on cash advances is usually higher than that for purchases. Additionally, this interest starts accruing after the advances made unlike that for purchases.