If you need cash quickly, it’s possible to withdraw it on most credit cards.
This is known as a cash advance, but it’s rarely recommended because of the high withdrawal fees and interest payments, which usually kick in straightaway.
As well as making purchases and transferring balances, most credit cards allow you to withdraw cash as you would with a debit card. This is known as a cash advance.
The problem is that unlike a debit card you will often be hit with a fee and interest is charged from the moment you take out the cash. This makes using a credit card for cash advances expensive, even if you clear your credit card balance every month.
It’s also not just notes and coins that may be considered as a cash transaction with a credit card. Other transactions, such as mortgage payments or utility bills, may be deemed cash transactions too. If unsure, it’s best to check with your card provider first.
Making an electronic transfer from your credit card to your current account will also incur a fee, but if you have a specialist money transfer credit card, you can at least avoid paying interest for a set period.
If you do withdraw cash on your credit card, try to clear your balance straightaway to minimise the interest you’ll pay.
It’s likely that the amount you can withdraw in cash will be lower than your overall credit limit, which you use for purchases or a balance transfer.
For example, if you had a £2,000 credit card limit, you may only be able to withdraw £1,200 in cash.
As well as withdrawing notes and coins, the following could also be considered a cash advance:
Not all spending costs the same on a credit card. Taking out cash is typically more expensive than making purchases because interest is charged straightaway and then every day until you pay off your balance
There is also likely to be an additional cash advance fee for using your credit card in an ATM, for example. This could be a fixed fee or a percentage of the amount you have withdrawn.
Yes, but this will probably be even more expensive because you will be hit with extra fees.
In addition to the cash advance fee and interest charges there will be a foreign usage fee and if the cash withdrawal is in British pounds and not the local currency, you’ll also have to pay a dynamic currency conversion (DCC) fee. The exchange rate won’t be the best either.
In the normal way you would take out cash with a debit card.
You can withdraw cash from an ATM using your PIN, over the counter at a bank or by getting cashback at a shop.
However, while getting cash out isn’t difficult, you need to be aware of the additional costs you may incur.
While you will not be able to withdraw cash from an ATM on any credit card fee-free, there are credit cards that do allow you to access cash or spend on your card without paying interest. Here's how they work:
Agreed overdraft facilities are another option if you need a smaller amount of fee-free borrowing. Some banks are prepared to offer you up to several hundred pounds of agreed overdraft, provided you pay it back in good order – often more if you’re a current student. But beware, if you go over your agreed threshold or time limit, interest rates on overdrafts can be quite steep – often reaching 40%.
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Once you have your card, you just need to activate it and it will be ready to use.
MoneySuperMarket is a credit broker not a lender. You must be 18 or over and a UK resident.