American Express’ cash advance from an ATM has high fees

Posted by CreditCardGuru

I’ve been a longtime American Express cardholder – for both personal and business – but this is the first time I have ever received a letter like this one. AmEx automatically enrolled my business credit card for ATM cash withdrawals with an assigned PIN.

letter from American Express

The funny thing is that I have had this card for several years, so it’s quite odd that all of a sudden they are automatically adding this feature to my account. They must be under the gun to ratchet up profits to hit their quarterly bonus numbers.

What’s the catch?

Is an American Express cash withdrawal free? That would be a big fat nooo.

It’s true that you can use your credit card at over 800,000 ATM locations around the world. But this benefit comes at a cost and it’s a stiff cost at that. Here’s how it works.

1. Find out how much you can get – As you see in the letter, they don’t specify how much you can get. If you login to your American Express account, click on “Check Your Spending Ability” where you will be taken to a screen like this:

check spending

Enter how much you want and submit – it will spit back whether or not the amount is acceptable.

Through trial and error, starting at a $10,000 request, I found out they’re only willing to let me withdraw $1,000. Everything above that amount was denied.

2. Know the cash advance interest rate – Unlike regular purchases, with cash advances there is no grace period. Interest will begin accruing the very moment you withdraw the cash. Not to mention, the rate will be significantly higher than your purchase APR. For some reason when you tap in to the cash advance line of a credit card it’s treated very differently than just buying something for the same amount. Cash seems to make card issuers nervous for some reason, but they’re a risk averse lot.

cash advance APR on AmEx Blue

That’s what was seen on the application for the Blue Cash card when I wrote this. Note that the rate might have changed since, but using this as an example, it means you would be paying 25.24% starting the same day you get the money.

3. Know the cash advance fees – As if the sky high cash advance interest rate isn’t high enough, you will also be charged a cash advance fee. Here is an example but what your American Express card charges may differ:

cash advance fees

4. Find a participating ATM – Their listing can be found at findanamexatm.com. The participating ATM networks are: NYCE, PLUS, STAR, Accel Exchange, AFFN, US Bank, and Fifth Third Bank.

5. Get your money – If any or all of the above hasn’t failed to deter you from getting an American Express cash advance, then go for it. As the saying goes…a fool and his money are soon separated.

Is it ever worth it?

There are very few scenarios I can think of where one could argue that the American Express ATM fees + APR + cash advance fees are a logical choice. Other than some extreme emergency where currency is needed immediately, I can’t think of why anyone would use this feature. Even if you’re drunk and have run out of chips at the casino (actually the banks have already thought of that and most ban cash withdrawals at casinos). It’s simply too expensive and should only be used as a last resort. But not to beat up on them, because all banks charge equally outrageous fees and rates to do ATM withdrawals. Just be aware that they are an option, but an option best avoided.

Last updated August 7, 2014


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7 comments... read them below or add your own

  1. Chico sajovic July 4, 2013 at 5:50AM

    The stripe on my ATM card stopped working at the airport (tried at 3 different atms)

  2. Richard May 16, 2013 at 5:28PM

    I know what my cash advance limit is, but will I be able to get that all at once from an ATM? Is there a daily limit?

    • Bev January 26, 2014 at 9:05PM

      300.00

  3. Don May 9, 2013 at 7:59PM

    Jimbo, I think you’re ignoring the part where most people who pull money off their credit cards are doing it because they don’t have the requisite funds in their bank accounts. It would be EXTREMELY silly to pull money off our credit card as a substitute for a debit card.

  4. Cypressknees March 25, 2013 at 10:34AM

    This came as bad surprise to me too. I will be taking out $500 this week and immediately pay it off from my checking account to get the miles I need to make a trip. In this case it’s worth the $15 bucks to put me over the top for the trip.

    Another incredibly sneaky part of the cash advance is that “lower APR charges” are the first to be paid off. So if you take out $100 on an existing balance of $1000 worth of normal credit charges, that $100 will be the last thing to be paid off, thus the juice not only starts running on you at the moment of the advance, it will be the last thing you can pay off. It is possible to call them up and direct a payment, though. Just mad inconvenient.

  5. Jimbo February 3, 2013 at 7:13PM

    This is why I carry around a debit card, in case I need to go to the ATM.

    • bill October 18, 2014 at 8:46AM

      I found that it didn’t ask for a pin which was nice because I didn’t have a clue what it was and I have been waiting for a new debit card to come in the mail. Do the ATM’S not ask for a pin? or did I just get lucky because I didn’t know it.

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