How can I turn my credit card into cash?

A credit card cash advance can help you pay for things if you are running low on funds in your bank account, but it is a very expensive way to pay.

Read on to find out how you could withdraw cash from your credit card without incurring the interest and fees of a typical cash advance.

There are credit cards with low interest on cash advances. In fact, some have interest rates that are less than half what is typically charged.

Workarounds that probably won't work

What doesn't avoid cash advance fees

Despite what you may have read elsewhere, the following transactions are highly likely to be classed as a cash advance.

• Buying a prepaid card. While you can use a credit card to buy a prepaid card, there is a low probability of avoiding cash advance rates and fees since it will most likely be classified as a cash equivalent.
• Buying a gift card. It's very likely that this will also be classified as a cash equivalent and incur cash advance rates and fees.
• Using a money transfer service to send money to yourself or someone else. This will also be classified as a cash equivalent and attract cash advance rates and fees.
• Buying foreign currency. For example, buying US Dollars or Euros with your credit card — so you can exchange them for Australian Dollars — will be classified as a cash equivalent, which will attract cash advance rates and fees.
• Withdrawing from a cash machine. Whether withdrawing from an ATM in Australia or overseas, this will incur cash advance rates and fees.

Using a credit card instalment plan

Fast and cheap cash withdrawal from a credit card

Most credit cards now offer Fixed Payment Options (FPO). These are typically marketed as an instalment plan.

Different types of credit card instalment plans are available. They are mostly used to repay specific purchases over a fixed period of time, but some banks allow you to access some of your credit card's available credit limit and withdraw cash to a bank account.

Crucially, instalment plans have much lower interest interest rates compared to the average cost to withdraw cash from your credit card at an ATM. They do, however, have processing fees of around 2% (similar to the cash advance fee on most credit cards).

Depending on the plan, you may be able to convert your credit limit to cash or convert an existing cash advance to a plan.

• Citi Quick Cash. Withdraw up to 90% of your Citi credit card's credit limit ($500 minimum) to a bank account. Funds are deposited on the same day if your bank account is with Citi and up to 3 days if you bank elsewhere. Interest rates can be as low as 0% p.a. There is a processing fee, which varies around 2% of the amount withdrawn.
• Bank of Queensland Cash Instalment Plan. Access $500+ of your credit card's credit limit and repay over a fixed period. Interest rates seem to be personalised.
• Coles Cash Instalment Plan. Up to 90% of your credit card's credit limit ($500 minimum) can be withdrawn to a bank account as cash and used for whatever you need. Find out what your repayment options are in their app or online banking.
• CommBank SurePay Cash Advance Plan. Convert an existing cash advance to an instalment plan. Available for $600 or more. Cash equivalents, e.g. money transfers, foreign currency purchases, etc. can also be converted to a SurePay Cash Advance Plan. The only way to find out what your interest rate would be is to configure a plan.
• Virgin Money Cash Instalment Plan. Convert from $500 up to 90% of your credit card's credit limit to cash. Find out what your interest rate would be by setting up a plan.
• Westpac SmartPlan. It's possible to convert an existing cash advance to a SmartPlan and repay in fixed instalments.

Got time on your side?

Alternative options

If you have time to plan ahead, you could consider some of these options.

• Buy something for someone else. You could buy an item on behalf of someone you trust who will pay you cash in return for the item.
• Buy something and sell it. Ideally you can buy something at a low price and then sell it for more, perhaps on an online marketplace. The problem is you may need to accept a lower price if you want a quick sale. Profit on the sale — if there is any — can help cover interest that may be incurred. Unfortunately, it is possible that you could buy something that doesn't sell.
• Put a bill on your credit card instead of paying cash. You could temporarily switch a bill being paid for with cash to use your credit card instead. Ideally you would pay off the next credit card statement to avoid building up debt.