21 August 2014 : 
Home / Tools / How to guides / Guide to Credit Cards / Using your credit card / How to withdraw cash with a credit card

6.7 How to withdraw cash with a credit card

The physical process of withdrawing cash with a credit card is much the same as withdrawing it using a debit card.

Whereas a debit card will take funds from your bank account, a credit card will take them from your credit card account, providing you have some of your credit card cash limit available to you to do this. If your credit card is already ‘maxed out’ then you may still be able to withdraw cash with it but you will receive a penalty charge for going over your credit limit.

To withdraw cash, you put your card into the cash machine (a.k.a cash point or ATM) enter your PIN and select the ‘withdraw cash’ or ‘cash’ option.

You then just select the amount you want to withdraw, usually in increments of £10. Some cash machines may offer £5 notes as well as £10 and £20 notes, but if it runs out of £5s and £10s it will only be able to offer withdrawals in increments of £20.

Some cash machines charge the cardholder a set fee of around £1.50 for withdrawing cash using a credit or debit card. Before you make a withdrawal, the machine should tell you if it is going to charge you for using this facility.

It is important to realise that withdrawing cash with a credit card costs a lot more than if you were to use a debit card.

Firstly, your credit card provider will charge you a transaction fee for taking cash out with your credit card in the form of a percentage of the amount you withdrew (this will be on top of any fees a particular cash machine charges you). The provider will often set a minimum amount that this charge can be so if the percentage amount is lower than the minimum amount then you will end up paying the minimum amount. The back of your credit card bill should tell you how much the percentage and minimum fees are for your credit card, but they are generally between 2% and 3% (min. £2 to £3).

Secondly, your credit card provider will charge you interest on any cash withdrawals made using your credit card. This interest is usually charged from the date the transaction was made until the amount is paid back in full.

Interest rates (APRs) on cash withdrawals are usually between 25% and 29% - almost double the rate you will likely be charged on your purchases.

What’s more, any payments you make on your credit card will go towards paying off the cheapest debt first. As cash balances are charged at the highest rate of interest, any payments you make towards your credit card bill will go towards clearing these last. You will therefore be paying the higher interest rates for the longer period of time on any cash withdrawals you make.

Compare Credit Cards

Back to Guide to Credit Cards Contents

Product Offers
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.

Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.
Follow Us: facebook twitter Google+

©2014 compareandsave.com is a trading name of Freedom Marketing Ltd.
Freedom Marketing Ltd is authorised and regulated by the Financial Conduct Authority, firm reference number 493117. This can be checked at http://www.fca.org.uk/register. Registered in England & Wales under registration number 05349340. The company's registered office is Freedom Marketing Limited, Colchester Centre, Hawkins Road, Colchester, Essex, United Kingdom, CO2 8JX.

Freedom Marketing Ltd is also authorised and regulated by the Financial Conduct Authority as a Credit Intermediary for all consumer credit products listed on our sites, with the exception of products from the following providers: Tesco Bank, Royal Bank of Scotland Group and Nationwide Building Society. Our CCL number is 624508/1.