Credit card cash advances, with their sky-high interest rates and 3 to 5 percent fee on money borrowed, should be avoided when possible. Credit card users who can’t trust themselves to use cash advances responsibly may want to disable this feature altogether. And some card issuers, but not all, do make it possible to deny yourself access to cash advances.
The Nerds talked with several major card issuers about their policies on limiting cash access. We also found an alternative.
Card issuer cash advance policies
Taking out a credit card cash advance means withdrawing cash against your credit line. If you find yourself in a jam where a credit card is not accepted, a credit card cash advance from a bank or ATM might be your only option. Cash advances can be easy to abuse, though, which is why some people may want to block or limit this card feature.
Policies on deactivating cash advances vary from issuer to issuer, so it’s good to know your options. A sampling of policies:
American Express is the only credit card issuer we contacted that allows its cardholders to disable credit card cash advances completely.
“If a consumer has a cash advance option on their card, they can opt out of cash advances,” says Jane Di Leo, an AmEx public affairs and communications representative.
This policy gives cardholders complete control over their credit cards when it comes to withdrawing cash.
Chase doesn’t offer the ability to disable cash advance lines on its credit cards. However, customers can keep themselves from getting advances by choosing not to set up a personal identification number on the card.
Without a PIN, cardholders can’t take out a cash advance from an ATM, although they would still able to take out a cash advance by presenting their credit card at a financial institution that accepts Visa and MasterCard if they have a valid driver’s license, state ID or passport. Either way, cardholders are still able to limit the total amount of money that can be taken out.
“The minimum cash line a card can carry is $20,” says Erin Smolenski, vice president/manager of public relations at JPMorgan Chase. Cardholders, she says, “can request to lower it to that amount.”
While Discover doesn’t technically grant the ability to turn off credit card cash advances entirely, it offers an option that can block advances.
“Cardmembers can reduce their cash advance limit to $0,” says Sarah Grage, a public relations associate for Discover. In effect, the $0 limit disables a cardholder’s ability to take out a cash advance.
Bank of America
Bank of America customers can’t deactivate access to cash advances, “but they can ask to reduce their cash advance line to the minimum of $200,” says Betty Riess, senior vice president of public relations and communications at BofA.
The bank’s $200 minimum cash advance limit is the highest among the issuers we contacted.
» MORE: What is a cash advance?
How to set limits — and what not to worry about
Customizing the cash advance preferences for your card is as simple as making a quick phone call to your issuer.
It’s worth noting, too, that to take out cash advances at an ATM with all of the issuers contacted, you need a cardholder-designated PIN. So if you worry about someone stealing your card and using it for a cash advance, don’t. The thief would need to have access to your PIN to do so. The same goes if you’re worried about lending a credit card to a child or relative. No PIN, no cash advance.
As mentioned, it may be possible, in some cases, to take out a cash advance with no PIN by showing ID with the same name as the credit card. This type of no-PIN cash advance typically occurs at casinos, banks or check cashing stores. Because of security precautions, though, it is nearly impossible for a fraudster to take out a cash advance this way.
Can’t disable cash advances?
Consider a prepaid debit card
If you like the benefits associated with a credit card, but don’t trust yourself to manage the cash-advance option responsibly, a prepaid debit card may be the answer.
Although most prepaid debit cards come with a nominal fee, this may be a small price to pay compared with potential fees associated with a misused cash advance. Simply load your prepaid debit card with the amount of money needed, and there’s no need to worry about spending beyond your means.
Image via iStock.