Low on physical cash but need a quick $20, $50, or $100? You may be able to borrow it from your credit card. This might be a better way than taking out a personal loan no credit check, that carries with it lots of fees and interest.
While most businesses accept credit and debit cards and even mobile wallets, there are still some things that you need cash-in-hand for – like splitting the cost of a gift or paying rent.
Can you get cash off a credit card? Yes. Should you? That’s another question entirely.
Before you run away to find out whether your credit card company provides a cash advance option, there are things you need to know.
We’ll show you how to get a cash advance system set up and explain how it works, including the potential pitfalls of borrowing cash from your credit card issuer.
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How to Get Cash Off a Credit Card
There are two ways to get cash off your credit card: you can get physical cash or use the cash advance function and send it to your checking account. Each of these acts like an installment loan, where you are taking a loan directly from your credit card company, based on your card terms and conditions.
Here’s what you need to do in order to take a cash advance:
Call Your Bank & Request a Pin
In most cases, your credit card arrived in an envelope by itself. Most banks require cardholders to request a pin from the bank before they can use cash machines.
Requesting a pin should be as simple as calling the customer service line or, in some cases, visiting your local branch. Your pin number is sent to your mailing address within a few business days.
Use Your Pin at the ATM
Once you have a pin number, you’re free to use your card at an ATM and withdraw up to your cash advance limit.
You can also withdraw cash from your credit card at the issuing bank. Visiting a branch or an ATM owned by the issuing bank will prevent ATM fees that range from $2 to $5. Sometimes the fee is even higher in high traffic areas.
Use a Cash Advance with Your Checking Account
Need an injection of money but don’t need the cash itself? If you have a checking account with your credit card issuer, you may be able to transfer the cash from your credit card directly into your checking account.
Transfers still come with the pitfalls of a cash advance or other bad credit loan: high fees and interest rates. However, it’s a simple way to prevent yourself from ending up in an overdraft if you already have the two accounts – and you don’t need to wait for a pin to arrive in the mail.
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7 Things to Know About Credit Card Cash Advances
Can you get cash off a credit card? Maybe, but you need to know these seven things about cash advances before you hit ‘enter’ at the ATM.
1. Higher Interest Rates on Cash Advances
The average APR today is 14.99% – a rate that’s already unforgiving on high balances. Unfortunately, the standard APR rarely applies to cash advance requests: the average APR for a cash advance is 23.53%.
So if your asking, “can you get cash off a credit card”, prepare to pay back up to 25% interest on what you borrow.
2. Additional Fees for Cash Advances
You’ll pay nearly 25% interest on the cash you borrow, but that’s not the only fee you’re hit with.
Many card issues charge fees for every single cash advance transaction. Some charge a percentage, such as 5% of the money requested; others cap the fee at a dollar amount when 5% reaches too great a number.
While these fees seem high, if you are in a really tough spot, this will certainly be lower than if you take out a payday loan online, which can carry fees up to 399% APR.
3. Interest Starts Now
Your credit card balance accrues interest once a balance rolls over from one month to the next. Using credit cards in a healthy way means generating a balance you can pay off in full every month.
When you borrow cash from your credit card issuer, the interest begins to accrue as soon as the transaction completes. That means you need to pay it off immediately before the cost of your transaction doubles.
4. Bonuses or Points Don’t Apply
Churning is a favorite way to rack up points. Take out a massive wad of cash and pay it back immediately to benefit from substantial point bonuses.
Unfortunately, most credit cards won’t allow you to use these benefits when you’re borrowing cash. Check with your credit card issuer to learn the rules associated with your card. Given the fact that all major issuers deny rewards, it’s unlikely.
4. No Grace Period
Did you score a credit card that’s interest-free for several months? Your cash advance doesn’t apply. The interest and fees will start now, just like if you took out a no credit check loan.
5. It’s Hard to Pay It Off
We don’t mean that it’s hard to make the repayment – though, that’s difficult, too. We mean that you can’t direct payments to the cash advance directly. You’ll face charges on the cash advance until the credit card is paid off.
You can pay off other forms of cash advances quickly, as soon as you have the money. You’ll find yourself struggling with the weight of your credit card balance if you want to get rid of high-interest rates.
6. You Won’t Improve Your Credit
Choosing a cash advance over a cash loan adds to your credit card debt, which lowers your credit rating.
Other fast cash methods, like loans, improve your credit. You can borrow and then pay them off without worrying about the balance of the card.
7. You May Not Qualify
Not everyone with a credit card qualifies for cash advances – and if you do, it may be a fraction of your available credit. Plus, you can’t borrow cash on a credit card that’s maxed out because your limit includes the cash advance.
Can You Get Cash off a Credit Card? Yes, but You Shouldn’t
Credit card companies make money because their products are convenient. Most Americans have a credit card of some type, and cash advances are easy once the process is set up.
For many, a cash advance costs far more than they realize, particularly if you’re already deep in debt.
At Bonsai Finance, we show you how to find the cash you need when you need it. Financial products aren’t doled out based on creditworthiness nor do we penalize you for doing what you’re supposed to: paying back your loan quickly.
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