Can I use a credit card at an ATM?

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Man using ATM
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Most banking customers are very familiar with ATMs and use them from time to time to get cash with their debit card. But can you use a credit card at an ATM? The answer is yes, but that does not necessarily mean it is a good idea.

Can you use a credit card at an ATM?

Automated teller machines offer a great replacement to bank tellers for quick, self-service transactions. You can use most ATMs these days to deposit checks or cash, check your balance, or withdraw cash from a checking or savings account with a debit card. But can you use a credit card at an ATM? The short answer is yes.

Credit cards and debit cards are virtually identical in appearance. And both link to a financial account that allows you to withdraw cash. When you withdraw from a regular checking or savings account, your withdrawal lowers your balance. This is a pretty familiar situation for most of us.

When you use a credit card at an ATM, instead of drawing from an account with a cash balance, you increase the debt on your card. If you have a $500 balance and withdraw $200 in cash, you would then have a $700 credit card balance. But beware that all balances are not treated equally. More on that coming up in the section on cash advance fees.

Many credit cards do not support a cash withdrawal by default. For that, you may need to contact your bank to get a personal identification number (PIN) similar to your debit card.

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Setting a PIN to use a credit card at an ATM

If you walk up to an ATM and put your credit card in the machine, it might not work right away. Once, I accidentally pulled my credit card out of my wallet instead of my debit card and couldn’t figure out why the ATM wouldn’t give me my cash. There was a clear and simple answer to that question. Facepalm!

To set a PIN for your credit card, you just need to contact your card issuer. A quick phone call with customer service should be all it takes to get your PIN or change it to something you like more than the one the bank might issue you by default.

Just remember that if your card does not have a PIN, you won’t accidentally use it for cash in a situation like I described above. Because of the big fees associated with a credit card cash advance, you may want to skip using your credit card at the ATM all together.

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Cash advance fees for using a credit card at an ATM

If you do think using your credit card at an ATM sounds like a good idea, stop to look at the fees before you insert your card into the slot. There are two costs to consider associated with using a credit card at an ATM.

First, you may have to pay a cash advance fee when using your credit card at an ATM. Depending on the credit cards you have to choose from, that could easily cost you 3% of your total withdrawal in addition to fees charged by the ATM. For a $200 withdrawal at an ATM with a $4.00 fee, you would pay $10 to withdraw that cash.

Next, you may find yourself hit with a higher interest rate from a cash advance than standard purchases. Even some of the best credit cards charge more for cash advances. If you don’t pay off your balance in full, that is going to become a very expensive cash withdrawal very quickly.

Remember that you should always pay your card off in full every month if you can to avoid finance charges.

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Why you should generally avoid using your credit card at an ATM

As a general rule, you should do your best to avoid using a credit card at an ATM. Because of the cash advance fees and higher interest rate, borrowing cash from a credit card is almost never a good idea.

Also keep in mind that if you are using a rewards credit card, you probably won’t earn any rewards from a cash advance transaction, so you will end up further behind than using your credit card at a store or online for a regular purchase.

Using a credit card at an ATM should be a last resort if you need cash in a serious pinch. Otherwise, skip it and use your debit card or, even better, use your card for a regular purchase that earns rewards. But, as always, make sure to pay off that bill in full by the due date.

Read money expert Clark Howard’s philosophy on credit cards

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