Credit card in atm

Hi Jon
You should not have a problem in France but with your bank. That’s a cash advance with interest! Are you meaning your debit card?

Yeah - you'll be paying interest from the moment that money comes out (as opposed to the usual delay you have when you purchase something). If you're OK with that, fine, but you won't find many people (other than maybe someone who works for a cc company) recommend you use your cc for a cash advance.

Someone correct me if I am wrong, but I think the high interest rate for the cash advance then applies to the entire balance.

Yes, it will work IF you have a PIN for the card and you call the card issuer to notify them you will be in France. Otherwise it might trigger a fraud alert that would shut down your card. So call the card (goes for any card you will use overseas).

The wisdom of such a plan is another question, but it can be done. I have a PIN on a card with 0 balance that I bring for just this situation - in case I loose my ATM card or run into some freak situation where I need more cash than I have in my checking account. Never needed it but it's a contingency plan.

Financially the best option would be to get cash from an ATM card (debit card) and if desired use a credit card for purchases in places where they are accepted (most hotels, many restaurants and stores).

I rely on a Charles Schwab debit card for withdrawing money from ATMs all over the world. It almost always works, and there is no fee. The exchange rate is good.

In the event that it is lost or stolen, or doesn't work (which is highly unusual, but happens occasionally), I have a spare debit card. Both my cards are fee-free, but even WITH a fee, I think the rate would be preferable to using a credit card.

I use my credit card only for sales transactions. I can't imagine using it to withdraw cash, except in the most dire of emergencies. Even getting cash at my home bank or via Travelex before I travel, or at the airport when I arrive, despite the less favorable exchange rate, would be a better option. Though I guess it depends on the credit card. Perhaps the original poster has a card which functions both as a debit and credit card, or just mis-typed?

As others have mentioned, it will be cash advance. Check your card for terms and fees. but generally the transaction will cost you $10 or 5% of the transaction, whichever is more. Then as others mentioned interest begins with the transaction, as opposed to a 30 day grace period, and the interest is in the range of 20 to 25% APR. Cards usually waive the Foreign Transaction Fee (FTF) if it has one.

I do not think that this is as terrible as most people make it out to be. For a $200 withdrawal, you will be hit with a $10 charge. If you wait a month to pay it off, you will pay another $4 in interest, so in the end, the money cost you 7%. Not great, but people who bank with some large banks get hit with a $5 fee and 3% FTF, so 5.5% on $200, exchanging cash is worse, but a good ATM card is a much better deal (~1%), but maybe you do not have access to one.

If you go this route, some tips:
- You can go online immediately (or same day) and pay off the card, that will avoid nearly all interest.
- Use a card with a zero balance. The interest for the cash advance does not apply to purchases, but any payments are applied to the purchase balance before reducing the cash advance balance. If you keep the balance at zero, no problem, but if you carry a large balance, then it is an issue, but then carrying a large balance is an issue as well.

Cash advance is one tool you have for getting money. Understand the costs, compare to other options, it may work well for you, or you may decide other options work, but it is something everyone should have access to when travelling.

You might want to review the “Money” section of Travel Tips on this site. It’ll suggest the best ways to deal with cash and credit cards overseas.

If you are truly planning on using a credit card to get cash at an ATM rather than a debit card, be sure to check the interest rates/fees information for you card so you know what you will get charged. It's possible to do this but not the recommended 'best' way to get cash.

Zoe,

Most credit card companies apply your payments to whatever outstanding portion of the balance has the lowest interest rate and then to the next interest rate level and so on (you would have to read the terms on the specific card to see how this is done specifically). So if you don't pay off your card entirely each month it might appear the cash advance interest rate applies to everything since that would be the last part of the balance paid off.

Don't even think credit card. Get an ATM card, preferable from a smaller bank. Mine waives all ATM fees. Very easy rot use.

Some cards are worse than others for charging either high interest rates, cash advance fees or both on cash withdrawals from an ATM. For me, a cash advance on a credit card is only an emergency backup option. Using your debit card to get cash is a much better deal.

If you have to do it, I'd suggest using your credit card to purchase goods to the maximum extent possible and attempt to use the absolute minimum amount of cash possible during your trip.