How to withdraw money from credit card without charges? Credit cards are widely used for making purchases, paying bills, and managing finances. But did you know you can also use a credit card to withdraw money? This is known as a “cash advance.” While convenient, cash advances usually come with hefty fees and high interest rates. However, there are ways to withdraw money from a credit card without incurring charges.
This blog will guide you on how to do it effectively while saving on fees and charges.
Table of Contents
Withdraw Money from Credit Card Without Charges
1. Understanding Cash Advances
A cash advance is when you use your credit card to withdraw cash, either from an ATM or at a bank. While it sounds easy, most credit card companies charge fees, often around 3-5% of the amount withdrawn. Additionally, interest on a cash advance starts accruing immediately, with no grace period, making it an expensive option.
Here’s a quick look at the typical fees associated with cash advances:
| Fee Type | Typical Cost |
|---|---|
| Cash Advance Fee | 3% to 5% of the withdrawal amount |
| ATM Fees | $2 to $5 per transaction |
| Interest Rate | Usually higher than standard purchases |
| No Grace Period | Interest starts from the day of withdrawal |
Luckily, there are ways to avoid these charges or at least minimize them.
2. Use a 0% APR Credit Card
One of the best ways to avoid paying extra fees on cash advances is to use a credit card that offers a 0% APR introductory period on cash advances. Some credit cards offer this as a promotional feature when you sign up for a new card.
During the 0% APR period, you can withdraw money from the card without paying any interest, which can save you a lot of money if you need quick cash. However, always check the terms and conditions to see if cash advances are included in the 0% APR offer, as not all cards provide this feature.
| Key Benefit | Details |
|---|---|
| 0% APR Introductory Period | No interest for a limited time |
| Avoid Interest Charges | Withdraw without accruing interest |
| Limitations | May apply only to certain cards |
3. Choose a Credit Card with No Cash Advance Fee
Some credit cards are designed to offer fee-free cash advances. These cards are rare, but they do exist. If you often find yourself needing to withdraw cash from your credit card, consider applying for one of these cards.
With a no-cash-advance-fee credit card, you can avoid the usual 3-5% charge. However, keep in mind that while you may not pay a fee, interest may still accrue on the withdrawn amount, unless the card also has a 0% APR promotion.
| Benefit | Details |
|---|---|
| No Cash Advance Fee | Save 3% to 5% on withdrawal fees |
| Ideal for Frequent Users | Great for those who need cash often |
4. Withdraw from a Bank with Credit Card
Some banks allow you to withdraw cash from your credit card without charging a fee, especially if you are a long-standing customer or hold multiple accounts with them. For example, if you have both a savings account and a credit card with the same bank, they may offer promotions or perks, including free cash withdrawals from your credit card.
Check with your bank to see if they have any such offers. Sometimes, banks waive cash advance fees for loyal customers, or they offer rewards programs that allow you to redeem points for free cash advances.
5. Transfer Money to a Checking or Savings Account
Another option is to transfer the money from your credit card to your checking or savings account, rather than withdrawing it in cash. Some credit cards allow you to transfer funds directly to a bank account without treating it as a cash advance.
This option typically avoids the cash advance fees and high interest rates. However, be sure to check if the transfer counts as a purchase or a cash advance. If it counts as a purchase, you may be able to take advantage of lower interest rates or even interest-free periods.
6. Use a Credit Card Linked to a Line of Credit
If your credit card is linked to a line of credit, you may be able to withdraw cash without paying cash advance fees. A line of credit acts like a loan, allowing you to borrow money as needed, but it typically comes with lower interest rates compared to cash advances.
Some banks or credit unions offer this feature, where you can use your credit card to access the line of credit for free or at a lower cost. This can be a cheaper alternative to withdrawing money directly from the credit card.
| Benefit | Details |
|---|---|
| Access to Line of Credit | Lower interest compared to cash advances |
| No Cash Advance Fee | May offer fee-free withdrawals |
7. Withdraw Cash Using Rewards Points
Some credit cards allow you to redeem your rewards points for cash or statement credits. This means you can essentially withdraw money without using the credit card’s cash advance feature.
While this won’t give you physical cash in hand, it does allow you to use your credit card rewards to offset any purchases you’ve made. For instance, if you’ve used your card to buy groceries, you can redeem points for a statement credit to cover that cost.
8. Use Peer-to-Peer Payment Apps
Apps like Venmo, PayPal, and Cash App let you send money from your credit card to your linked bank account or directly to someone else. However, many of these apps charge a fee for credit card transactions, usually around 3%.
If you can find a peer-to-peer payment service that doesn’t charge a fee for credit card transfers, this could be another way to withdraw money without incurring fees. Keep an eye out for promotions or offers that allow free transfers.
9. Set Up a Personal Loan with a Lower Interest Rate
If you need cash urgently but want to avoid high interest rates and fees, consider taking out a personal loan. Personal loans typically have lower interest rates than credit card cash advances. You can then use the loan to get the cash you need without using your credit card.
This may not be a direct way to withdraw money from a credit card, but it can be a cheaper alternative if you need cash.
Tips for Avoiding Cash Advance Fees
- Avoid ATMs: Using an ATM to withdraw money from a credit card often triggers additional fees.
- Look for Promotions: Some credit cards offer 0% APR on cash advances or promotions that waive fees.
- Check Your Credit Card Terms: Review your card’s terms to see if cash advances incur fees or high interest rates.
- Use Online Payment Methods: Peer-to-peer apps can offer cheaper ways to access cash from a credit card.
FAQs: How to Withdraw Money from Credit Card Without Charges
Q. Can I withdraw money from my credit card without paying interest?
A. Yes, if your credit card offers a 0% APR period on cash advances, you can withdraw without paying interest during the promotional period.
Q. Do all credit cards charge fees for cash advances?
A. Most credit cards do, but some offer no-fee cash advances. Check your card’s terms or consider applying for a card that has this feature.
Q. Can I use rewards points to withdraw money?
A. You can’t directly withdraw cash, but you can redeem points for statement credits, which offsets your expenses.
By following the methods above, you can avoid hefty fees when withdrawing money from your credit card. Always be mindful of your card’s terms, and use these strategies to make your finances more manageable.
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