The answer to whether you can get cash back when you buy something with a credit card actually depends on what you mean by "cash back."
While credit cards are great for a lot of things, using them as a way to put cash in your wallet right away when making a purchase at a cash register isn’t one of them (with one notable exception: see below).
Debit cards have become so familiar, we're totally accustomed to punching in our PINs and asking for cash back at the grocery store. Credit cards don't offer quite the same amount of flexibility. For example, you can't request cash back on a credit card purchase at the grocery store or the pharmacy.
You can, however, get cash from your credit card at a bank teller or at an ATM. You'll just have to pay for the privilege. We'll talk more about this in a moment. First let's address the way you can get cash back, in a way, when you buy something.
Cash-back credit cards
Another possible meaning of "cash back" is definitely a possibility with your credit cards. If you're interested in earning rewards on your everyday spending, there are certainly myriad options that allow you to collect points or otherwise rack up "cash back" when you make purchases at stores, gas pumps, online and just about anywhere you use your credit cards.
Cash-back credit cards can even be tailored to provide you with the highest possible cash back to fit your lifestyle. In other words, if you spend a lot of money monthly on gas, you'll want to look for a cash-back credit card that offers you particularly high rewards earning potential at gas stations. If you're a regular grocery store spender, the same logic applies: Look for a cash-back card that offers higher rewards for spending at grocery stores.
While cash-back credit cards don't provide instant cash in your hand at a cash register, they do offer plenty of opportunity to earn cash back for buying something with your credit card, there's just a bit of a delayed-gratification factor to consider.
Here's a look at a few popular cash-back credit card offers:
- Blue Cash Preferred® Card from American Express (American Express is a CardRatings advertiser. Terms apply. See Rates and Fees)
- Wells Fargo Cash Wise Visa® Card
- Capital One® Savor® Cash Rewards Credit Card
- Chase Freedom® and/or Chase Freedom Unlimited®
Credit card cash advances
Getting back to the the ways you can get immediate cash-in-hand with your credit card. According to most industry analysts who watch these kinds of statistics, cash advances have declined in popularity over the past few years. So many merchants accept credit cards, it's often easier to transact with plastic than with greenbacks, anyway. Even the best credit cards charge fees, so should you require cash in an emergency, here’s what you might end up paying:
- Cash advance fee. Many banks now charge an upfront fee of up to 5 percent when you convert part of your credit limit into cash.
- Immediate finance charges. Unlike purchases, most cash advances immediately start racking up interest. Many banks charge higher APRs for cash advances than for purchases.
- Network access fee. Your bank and the ATM network could each charge you a service fee of a few dollars for handling your cash advance.
- Teller processing fee. If you make your cash advance request from a live person at a bank or at a travel services agency, you can expect to pay an even higher service charge.
You can also get cash from your credit card by using convenience checks. Most of us use these to take advantage of balance transfer offers when we want to pay off a debt that's not linked to a major online bill payment service. Convenience checks often carry their own fees of up to 5 percent of face value.
One final – but not necessarily recommended – method to get cash from your credit card involves reloading prepaid debit cards at particular retail locations. However, merchants can dictate whether they process this kind of transaction as a cash advance. If you find one that doesn't, you can pay a flat fee for the reload card, then withdraw the cash from a participating ATM. Due to the potential for fraud, many merchants decline to sell prepaid card reload packs to customers using anything other than ATM cards or cash.
Used sparingly, this can be an inexpensive way to tap some cash from a credit card without paying hefty fees. Some cards may charge various fees for activation or usage. So be sure you fully understand the fees attached to the prepaid card.
An exception to the rule: Discover cards offer cash back at the register
A comment from a reader sent us digging into another option for cash back at the register. It turns out that Discover cardholders CAN receive cash back, up to $120 in a 24-hour period (local retailers might have a lower limit) at a select group of about 75 retailers.
This "cash over your purchases" amount is subject to the same APR as your regular purchases (not the higher APR that many cash advances are subject to). If you make sure and pay off your credit card statement balance each month, this essentially means that you're making a cash withdrawal for free. It is convenient, for sure, but make sure you don't treat it like "free money." You will pay interest on the amount you get back if you don't pay off your statement balance each billing cycle.
One more thing, you won't earn rewards on the cash-over amount.
(See Rates and Fees of the Blue Cash Preferred® Card from American Express)