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March 24, 2017

Can You Get Cashback with a Credit Card?

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Are you in a bind and need some cash? There are a few ways to get immediate cash back from a credit card, but be careful. Read on for the details.

If you're asking this question, you probably mean "can you use your credit card to get some immediate cold, hard cash."

We all know that with a debit card, you can just say "I want $40 cash back" at the checkout at a grocery store. Debit cards can do this because you're just withdrawing money you already have directly from your checking account.

Maybe you need some cash fast and don't have enough in your bank account. Can you do the same with a credit card?

Chase Freedom Unlimited
Apply for Chase Freedom Unlimited
Deal: Enjoy 5% cash back on travel purchased through Chase Travel, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.

Click here to visit Chase's secure website for more information, including the online application.

It's not as simple, but there are still a couple of ways you can get emergency cash with a credit card.

  1. A cash advance
  2. Convenience checks
  3. Discover Cash Over Purchase
  4. Cash back rewards

1. A Cash Advance

Just about all credit cards offer a cash advance service. It's what it sounds like - you can get some cash right now and pay it off later. This allows you to withdraw cash from an ATM or at a bank. But you can only get cash up to a certain amount (usually just $300-$500).

You need to set up your account to be allowed to make cash withdrawals first. This is easy. Just call your card issuer and get a PIN number. You'll need this PIN number at the ATM or bank counter (just like how you do it with a debit card).

Think of a cash advance as a short-term loan. But be careful: this loan has very costly terms. First, there's a cash advance fee, which is usually 3-5% of the amount you're withdrawing. A 5% fee on a $300 withdrawal already costs you $15.

Secondly, the APR for cash advances is much higher than your credit card's normal APR (as high as 25% or more). And it starts accruing as soon as you make the withdrawal. So you need to make sure you can pay it off ASAP.

2. Convenience Checks

You probably get blank checks in the mail once in a while from your card issuer. They look just like a personal check, but they're tied to your credit card account. You probably wonder, "Can I use them?"

You can make the check out to anyone to make a purchase, pay a debt, or even do a balance transfer. You can even make it out to yourself if you need cash in your bank account. When the check is cashed, your card issuer pays it off, and you start accruing interest immediately.

If you're using it to pay someone or purchase something, then the transaction is treated as a cash advance and the same costly terms apply. The fee is 3-5% of the amount of the check, plus a high interest rate that starts right away.

Yes, it's convenient to be able to just sign a check to pay someone, without needing any real money. They seem like gifts from the card issuer. So easy to pay rent, bills, or a home repair with them. But watch out. If you're not diligent about paying it back ASAP, you'll be stuck with high, fast-accruing interest.

And be careful - if you write out checks that go over your credit limit, you'll be subjected to the penalty APR, which is often as high as 30%.

Tip: Convenience checks sometimes have special promotions, such as 0% intro APR for balance transfers. It could be a smart move to use a 0% APR promotion to transfer over a balance from another credit card with higher interest. But you'll need to make sure you can pay it off before the promotional period ends. Make sure you read the fine print carefully. Sometimes, the 0% APR promotion is for balance transfers only, and not for purchases.

3. Cash Over Purchase with Discover

Discover is the only major credit card issuer to offer a "cash over purchase" feature. This allows you to get cash back at over 60 popular retailers (including Ralphs and Walmart), saving you a trip to the ATM.

When you check out at the register, simply choose how much cash back you'd like to get, and you'll be charged the entire purchase plus the cash price. Just like a debit card. You are limited to $120 cash back every 24 hours.

And the best part is that there is no extra transaction fee and no special interest rate. Discover cards are the only real way to get immediate cash back without penalty (you're still subjected to your regular purchase APR if you don't pay it off each statement cycle).

See our list of our favorite Discover cards.

4. Cash Back Rewards

And of course, you can get cash back with cash back credit card rewards. A lot of credit cards give you rewards on everyday spending, which you can then collect as a direct deposit into your bank account or a statement credit on your bill.

This is a great way to get something back for your everyday purchases. To get the most rewards possible, select the card that fits best with your lifestyle. For example, if most of your spending is towards groceries and gas, then choose a card that gives the most cash back in those categories. If your spending is varied, a flat-rate cash back for everything is best.

Of course, this is not immediate cash back. Depending on your spending, it may take a few months to accrue a substantial amount of cash back rewards.

See our list of the best credit cards for cash back. Our favorite cash back card is the Chase Freedom Unlimited®.

Bottom Line

If you're in a bind and need some immediate cash, there are ways to get cash out with your credit card. But you have to be very careful because it is never a free loan. Besides the 3-5% transaction fee and possible ATM charge, you'll also be charged a high interest rate that starts right away. So cash advances or convenience checks should only be used in real emergency situations. And make sure you pay it back as quickly as possible.

Write to Anna G at Follow us on Twitter and Facebook for our latest posts.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Editorial Note: This content is not provided by Chase. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by Chase. This site may be compensated through the Advertiser's affiliate programs.

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