The most straightforward way to convert credit into cash is through an ATM withdrawal. Credit cards often allow cardholders to use their credit line to withdraw cash from ATMs that are part of the card’s network, though this is typically limited to a specific percentage of the total credit limit. For example, if you have a $5,000 credit limit, you might be able to withdraw up to 30% of that limit, or $1,500, as cash. However, ATM cash withdrawals using a credit card often come with significant fees. These include a cash advance fee, which is usually a percentage of the amount withdrawn (often between 3% and 5%), and interest rates that are higher than those for regular credit card purchases. Moreover, interest on cash advances tends to accrue immediately, without any grace period, unlike purchases that may not accrue interest until the statement due date. For many, this makes ATM withdrawals an expensive way to obtain cash quickly, especially if the money isn’t repaid promptly.

Another method of credit card cashing is through what’s known as a “balance transfer” or “convenience check.” Some credit card companies offer checks that are tied to your credit card, allowing you to write a check to yourself or to a third party and deposit it into your bank account. These checks are often treated like cash advances, so they come with similar fees and high interest rates, but they can be a good option if you need a larger sum of money than you would typically be able to withdraw from an ATM. Many people use these checks when they need to consolidate debt, pay for large expenses, or simply obtain cash without going through an ATM. As with ATM withdrawals, balance transfers via convenience checks usually come with a cash advance fee, and the interest will begin to accrue immediately. However, some credit card issuers may offer promotional periods with lower fees or 0% APR on balance transfers for a set time, making this method more attractive if you are able to pay off the balance before the promotional period ends.

A more indirect method of credit card cashing involves using a credit card to purchase items that can be resold for cash. This method, while somewhat controversial and not always advised, involves purchasing goods that can be resold for cash, such as electronics, gift cards, or other high-demand products. The idea is to buy an item with your credit card and then sell it for cash or a bank transfer. Some people have used this strategy to quickly convert credit card purchases into liquid assets, but it carries significant risks. For one, the resale value of the items may not be as high as you expect, which could leave you with a loss after factoring in your purchase price and any interest or fees associated with the credit card. Moreover, credit card issuers may view this activity as a red flag, and it could be considered a form of “credit card churning” or abuse, which may lead to penalties, account suspension, or even legal action. While this may seem like an easy way to access cash, it is fraught with potential pitfalls and should be approached with extreme caution.

There are also peer-to-peer payment services like PayPal, Venmo, and Cash App, which allow users to send money directly to friends or family. Some people use credit cards to fund their payments on these platforms, essentially converting their available credit into funds that can be withdrawn to a linked bank account. While the process seems simple, it is important to note that many peer-to-peer platforms charge fees for credit card transactions. These fees typically range from 2.9% to 3.5% of the total transaction amount, which can add up quickly if you’re transferring large sums of money. Additionally, some peer-to-peer services may treat credit card-funded transactions as cash advances, meaning they will be subject to cash advance fees and higher interest rates. While this method may be convenient for some, it is essential to fully understand the associated costs before using credit cards in this manner.