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There could be many reasons you might want to use a credit card at an automated teller machine (ATM). Perhaps you've run into unexpected car repairs or another emergency that requires funds you don't have in your bank account. Maybe your child has an expense that you are unable to cover. Whatever the reason for using a credit card to make a cash withdrawal, it's essential to understand what you're getting into. Here, we'll cover the ins and outs of dropping by your local bank or credit union for a cash advance and offer options that can save you money.
The short answer is yes, you can use a credit card at nearly any ATM to withdraw cash. Whether the ATM is at a bank, credit union, or other financial institution, ATMs are set up to allow you to conduct all kinds of business, including using a credit card to take out a cash advance.
Before you pull out the plastic, though, keep reading. There are things about using a credit card to take a cash advance at an ATM that you'll need to understand. Once you know everything there is to know about cash advances, you'll be in a far better position to make an informed decision.
When you borrow funds from a credit card, it is considered a cash advance. There are several ways you can use a credit card to take a cash advance.
If you've ever used a debit card to take funds from an automatic teller machine (ATM), you'll likely find it easy to use a credit card instead. The differences are slight, and as long as you follow the prompts on the screen, you should have no trouble.
Here are two steps you'll need to take before you arrive at the ATM:
1. Make sure you know the personal identification number (PIN) associated with the credit card. If you've forgotten it or have never set one up, give the credit card company a call (you can find the phone number on the back of the card). Customer service should be able to provide you with the PIN or help you set one up. You'll need this number before you can make the ATM transaction.
2. While you have the credit card issuer on the line, make sure to ask the following:
Before the credit card company representative answers any of your questions, expect them to ask questions of their own. They want to ensure that you're the legitimate cardholder and not someone trying to conduct a fraudulent transaction.
Once you're at the ATM and have inserted your card, there are only six more steps to take, each of which requires you to follow the prompts on the screen. While the wording may vary by ATM, they should all work along these lines:
Unless you have no other options, a cash advance rarely makes sense (don't worry -- we'll cover alternatives in a moment). Here's why:
If you need money fast, a cash advance from an ATM is not your only option. Here are a few others worth considering.
Personal loans are versatile financial products, and most lenders do not care how you spend the money. If you have a strong credit score, you'll find it easy to land a loan with just about any lender -- in person or online. Better yet, the interest rate for borrowers with high credit scores is almost always lower than the average rate on a credit card. Even if you don't have a strong credit score, you may find that rate considerably lower than the rate charged for a credit card cash advance. The only rub is that if your credit score is low, you'll likely be hit with costly loan fees.
If you're only looking to borrow a small amount, it pays to ask your bank for a loan. No matter where your credit score lands, your bank knows you and can quickly see how well you pay bills and manage money. If possible, offer up collateral. Collateral is something of value that you put up in exchange for the loan. It could be anything of value, from a classic car to coins or jewelry. The good news is that it will increase your chances of snagging the loan. The not-so-good news is that the bank has a legal right to repossess the collateral and sell it if you fail to make payments as promised.
Let's say you only need $500 and know you can repay it in the next four to six weeks. As long as you've never stiffed them before on a loan, it's fair to ask someone who cares about you to front the money. Be sure to create and sign a promissory note and then stick with your promise to repay.
No matter what you do, avoid payday lenders at all costs. Their interest rates often exceed 400% (despite what they may tell you), and you'll likely find yourself in an endless struggle to pay them off without taking out a second loan to cover the first.
Yes, you can withdraw funds from a credit card through an ATM.
You will likely be charged an ATM fee, pay a high interest rate on the credit card, and incur any additional fees charged by your credit card company.
No, unlike a traditional ATM card, you cannot access your bank account through your credit card at an ATM.
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