Withdrawing cash from an ATM using a credit card

H84LEE

Hi all,

I just wondered if anyone could clarify something for me.

I'm expecting a sum of money to be credited to my credit card (several hundred pounds), although I regulary use my credit card for purchases I wondered if I would be charged for withdrawing the amount using an ATM.

I understand that credit card cash withdrawls are an expensive form of short-term loans, however if the balance is in credit then one would presume no interest / charges would be incurred?

Thank you in advance

pinkarsenalprincess

I'm pretty sure that even if you are in credit on your credit card you will still incur fees.

lisyloo

You won't incurr interest as you aren't borrowing money.
But you will probably incurr fees for using the ATM network as you'll still be using the facility whether in credit or debit.

You options are:
1) To ask for a refund. Most companies use BACS or cheque. This could take a few weeks.
2) Spend the money via purchases e.g. petrol, food.

I would say if your normal food/petrol spend will cover it in 3 weeks then go for the spend as it will take a little time to raise a cheque/BACS transfer and of course there are Royal Mail backlogs and 3 bank holidays coming up.
For a few hundred quid I'd probably spend it off as for most households that would be paid off in a few weeks.

EarthBoy

You will need to check with your credit card provider, but it's more than likely that you will still get charged a cash withdrawal fee. The fee is a service charge, so if you use the service you pay the fee. It won't matter whether you are in credit or not. You probably won't be charged interest though as you aren't borrowing anything.

Please be warned though that the terms of some credit cards expressly prohibit you paying in a credit balance. If this applies to your card then the payment might be sent straight back to where it came from, leaving you nothing to withdraw. e.g. Halifax credit card conditions state they might do this. Alternatively, there might be an extra penalty fee. If the credit is a large one the bank might freeze your credit card account until you can prove who you are and where the money came from. This is to prevent fraud as paying a large amount into a credit card account with a low, or zero balance looks suspicious.

lisyloo

the terms of some credit cards expressly prohibit you paying in a credit balance

This does happen from time to time with refunds.
I would be complaining strongly if a fee was levied on a refund as many retailers insist on putting refunds back onto the card (to get their fees back).

This is to prevent fraud as paying a large amount into a credit card account with a low, or zero balance looks suspicious.

I wouldn't say a few hundred was a large amount, but why is paying in fraud?

I think you need to distinguish here between a reund from a retailer and someone deliberately loading their card (say for a holiday) which is in breach of Ts & Cs.
I don't think you would be in breach of Ts&Cs for receiving a refund when retailers insist on in.

opinions4u

Unless you have a fee free cash advances card (and there aren't many of them) you'd be better making purchases against the credit balance or ringing the card company up and asking them to forward you a cheque for the credit balance.

If you withdraw the exact amount of credit balance as cash, the fee (often 3%) will then generate a new debit balance on the card and start accruing interest.

H84LEE

Thank you all for your messages.

I think the easiest thing to do, and the only option that will prevent me from incuring any fees, is to spend the amount on normal purchases and give my debit card a rest for a few weeks.

lisyloo: I might see if I can receive a cheque however I am receiving the refund from the credit card company (which I don't have a savings / current account with) and therefore is unlikely to offer the cheque option.

EarthBoy & lisyloo: As stated above the refund is being received from credit card company, but good point to make about "the terms of some credit cards expressly prohibit you paying in a credit balance"

Thank you all so much for your time

Merry Christmas to you all

lisyloo

and therefore is unlikely to offer the cheque option

This is YOUR money.
There will be an option for them to send it to you.
Some card companies use BACS (electronic transfer) rather than cheques (AMEX do), but they cannot hold onto this money - it's yours.

EarthBoy

lisyloo wrote: »

I think you need to distinguish here between a reund from a retailer and someone deliberately loading their card (say for a holiday) which is in breach of Ts & Cs.
I don't think you would be in breach of Ts&Cs for receiving a refund when retailers insist on in.

I agree with you, but the OP didn't originally say that it was a refund. They only said that "I'm expecting a sum of money to be credited to my credit card". Only in their subsequent post have they explained that it's a refund.