When I look at the credit card offer in several banks, they always have some price on withdrawing money from ATM (at home, not abroad), e.g. "3.5%, at least 2EUR" or similar.

Why aren't there credit cards with free cash withdrawal?

I live in Europe if that matters. And somehow each of these banks is able to offer free ATM withdrawal for debit cards.

  • Free ATM anywhere, or just at that bank?
    – littleadv
    Commented Jan 16, 2014 at 8:18
  • Both. Comparing with debit cards - I use services, where I have free ATM anywhere in my country, and some other services - where ATM is limited to a single ATM provider. Commented Jan 16, 2014 at 8:30
  • Why is this called a "withdrawal" rather than a loan? Do you have a credit balance on your credit card?
    – DJohnM
    Commented Jan 16, 2014 at 20:07
  • I used the word "withdrawal" because that's what the ATM says, doesn't it? Or have you see it saying "take another loan?" Commented Jan 17, 2014 at 21:25

2 Answers 2


Credit cards always charge for withdrawing cash, because if they didn't then you could have an indefinite loan and pay no interest simply by withdrawing enough cash each month to pay off the previous month's bill before the due date. It's nothing to do with using an ATM -- they'll charge you for getting a cash advance over the counter as well.

  • 1
    Not exactly so. Depends on the implementation, I have a credit card linked to may bank account that allows ATM withdrawals for free, which are then charged from my bank account at once. Purchases are on credit. Each country and its own regulations.
    – littleadv
    Commented Jan 16, 2014 at 8:39
  • I'm curious how the logistics of your perpetual loan might work, Mike. There is the obvious aspect of a credit limit, but would you not still come up against having to pay the piper at some point?
    – THEAO
    Commented Jan 16, 2014 at 9:44
  • 1
    It's not uncommon for cash advances on a credit card to be charged interest from the day of the withdrawal (unlike purchases), so even without a transaction fee, it would still cost you something. Also, although you could withdraw enough cash today to pay off last month's bill, next month you'd have to withdraw even more to pay off this month's purchases plus the cash withdrawal you've just made, and so on. Commented Jan 16, 2014 at 12:08
  • Suppose my credit limit is £10,000. I spend £5,000 on stuff that I want. At the end of the month, my bill is £5,000. So I get a cash advance of £5,000 and use the cash over the counter to pay off my bill of £5,000. At the end of the month, I have a bill of £5,000. Repeat forever, and I have £5,000-worth of stuff that has cost me nothing. Yes, there are other ways to stop this, like charging interest on cash advances from day one, or applying money paid in against new cash advances before it's applied against existing debt.
    – Mike Scott
    Commented Jan 16, 2014 at 14:26

The fee to withdraw cash from an ATM using your credit card (as opposed to your debit card) is akin to the merchant fees paid by any business that accepts your credit card as payment. These fees range from around 2.75% of the transaction to upwards of 5%, and are charged to the merchant.

The fees are split among the various vendors that provide the infrastructure to conduct the credit card transaction — resulting in the merchant receiving the money and the charge on your credit account. These fees are used by each vendor to cover their costs and, ultimately, generate a profit. (Note: Most vendors in the value chain DO NOT receive any revenue from any interest you may pay on your outstanding balance.)

Therefore, when you withdraw cash from an ATM, you are paying the merchant fees instead of whatever merchant you are purchasing goods/services from with the cash withdrawn.

  • only reasonable answer
    – Bananach
    Commented Apr 4, 2016 at 17:59

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