Using a credit card for all your regular expenses means you don’t have to carry cash in your wallet, and you get an itemized bill of your spending at the end of each billing period. In addition to the convenience offered by credit cards, using a credit card can also help you get rewarded for your spending, and some cards offer consumer protection and benefits that you simply cannot get with other forms of payment.
But did you know that you can use your Capital One credit card to withdraw cash from an ATM? But before you do, make sure you understand the advantages and disadvantages associated with it.
In this guide, we will explain how to get a cash advance from a Capital One credit card. We will also answer all your burning questions. For example, does Capital One charge for cash advances? Also, which Capital One credit cards offer this option?
What is a cash advance?
A cash advance is a credit card transaction that allows you to receive cash in exchange for new credit card payments. This means that you will use your credit card at the ATM in the same way you would use your debit card, but the cash you receive will show up on your credit card bill.
You might be wondering why you are taking cash from your credit card instead of using it for something you need to buy. We all know that there are situations where cash is still crucial and using a credit card as a payment might not make sense. For example, you may find that your debit card is not working, but you urgently need cash to pay a friend. Or maybe you want to make a purchase from someone who doesn’t accept credit cards as payment (for example, you want to buy furniture from Facebook Marketplace or Craigslist).
Before taking cash with a Capital One credit card, be aware that this is probably not the best idea due to the risks involved. First, you will have to pay a fee for accessing cash with a credit card at an ATM. Not only is there an upfront cash advance fee that you will have to pay no matter what, but the interest rate on cash advances is higher than the standard variable rate for purchases.
In addition, Capital One’s cash advance does not have a grace period. This means that the cash you access with your credit card will begin to earn interest from day one. This makes the cash advance significantly more expensive than paying for credit card purchases, which won’t start accruing interest until the end of a grace period of at least 21 days. An alternative to this option would be to take out a personal loan, which on average has an annual interest rate much lower than that of a cash advance, and the interest will not start accruing right away.
Fees and interest associated with a Capital One cash advance can add up quickly and may use up more of your line of credit than intended. This will increase your credit utilization ratio, especially if your credit limit is not very high, and may ultimately lower your overall credit score. If you need to take a cash advance, try contacting your lender and see if they can increase your credit limit first.
How to get a cash advance with Capital One
To be eligible for a Capital One cash advance, you must have a Capital One credit card. From there, you will need to find out if your credit card has a personal identification number or PIN.
How to get a cash advance if your credit card has a PIN
If your Capital One credit card has its own PIN, you can use it to withdraw cash from an ATM. All you have to do is insert your card into any ATM, as if you were using a debit card. From there, you will enter your pin and follow the instructions to complete the cash advance.
According to Capital One, you need to understand what fees the ATM might charge if you choose these options. And remember, the ATM fee charged for Capital One cash withdrawal must be paid on top of the Capital One cash withdrawal fee.
How to get a cash advance if your credit card doesn’t have a PIN
If your credit card does not have a PIN, you can still use your Capital One credit card to get cash at a regular bank branch with the Visa and Mastercard logos.
According to Capital One, if you go this route, you’ll need to provide government-issued photo ID (such as a driver’s license) along with your credit card.
Also, keep in mind that your credit card may also send “convenience checks”, which can work similarly to cash advances. All you have to do to use the convenience check is make it for yourself. From there, you will go to your bank and deposit a check or ask for cash.
Which Capital One cards offer cash advance?
All Capital One credit cards allow you to withdraw cash if your card has sufficient funds. However, interest rates on a Capital One cash advance credit card can vary, so make sure you know your card’s annual cash advance percentage in advance.
Is a cash advance right for you?
When it comes to getting a cash advance from your Capital One card, just because you can doesn’t mean you should. In the end, there are advantages and disadvantages to consider before using a credit card to get cash.
Due to the fact that cash advances require an upfront payment, you should probably only use this option if you can’t get cash with a cheaper option like your debit card. Also, keep in mind that if you can use your credit card to make a purchase directly instead of withdrawing cash, you will get a grace period that will allow you to avoid charging interest right away.
Pros and cons of cash advances
Like many other financial transactions, cash withdrawal has its pros and cons:
pros
- You get cash when you need it or when you can’t use a credit card.
- You can cover unexpected cash expenses when money is short or between paydays.
Minuses
- Cash advances require an upfront payment, usually between 3% and 5% of the amount of cash you withdraw.
- Credit card interest rates are higher for cash advances than for purchases.
- There is no grace period, so interest begins to accrue immediately.
- This can increase your credit utilization rate and, in turn, lower your credit score.
Alternatives to cash advances
Because cash advances aren’t cheap, you can also consider some alternative ways to access cash when you need it. For example, you may consider getting a personal loan if you can wait a few days to access your cash. Many personal loans can be applied online and you will receive a competitive fixed interest rate, a fixed monthly payment and a fixed repayment schedule that will never be charged.
You can also take out a loan of 401k, provided you save for retirement in this type of employer-sponsored account. Another alternative is to withdraw the money you have deposited into the Roth IRA account, which you can do without paying any taxes or fees, as long as you deduct only the contributions.
There are other alternatives, such as payday loans and car loans, but you should avoid these options as they can be even more expensive (and problematic) than cash advances.
essence
Your Capital One credit card has some great benefits, and it’s nice to know you can use it for cash advances if you really need to.
However, there are cheaper ways to get the cash you need, so avoid the cycle of getting one cash advance after another. Using a credit card to get cash from an ATM can be convenient, but it will cost you money.
*All credit card information for Capital One Savor Cash Rewards, Capital One Spark Miles Select for Business and Capital One Spark Classic for Business has been independently collected by CreditCards.com and has not been verified by the issuer. The Capital One Savor Credit Card, Capital One Spark Miles Select for Business and Capital One Spark Classic for Business are no longer available through CreditCards.com.
Editorial disclaimer
The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.