Can I Use a Milestone Credit Card at an ATM? Everything You Need to Know

No, you generally should not use your Milestone credit card at an ATM. While technically possible to obtain a cash advance, the high fees and interest rates associated with this transaction make it an extremely expensive and financially unwise option. Let’s dive deep into why this is the case and explore the intricacies of using your Milestone card, or any credit card, for cash advances.

Understanding Cash Advances and Your Milestone Credit Card

A cash advance is essentially a short-term loan provided by your credit card issuer. You’re borrowing money against your credit limit, withdrawing the cash from an ATM, bank, or other financial institution. While it might seem like a convenient solution in a pinch, the reality is far more complex and costly, especially when it comes to cards designed for credit building like the Milestone credit card.

The Milestone credit card is designed to help individuals with fair or bad credit improve their credit score. As such, it often comes with higher interest rates and fees compared to credit cards for those with excellent credit. Using it for a cash advance magnifies these drawbacks significantly.

Why Cash Advances with a Milestone Card are a Bad Idea

Several reasons contribute to the financial unsuitability of using your Milestone card for cash advances:

• High APRs: Cash advance APRs are typically much higher than purchase APRs. This means you’ll start accruing interest immediately, and at a significant rate.
• Cash Advance Fees: Each cash advance incurs a fee, often a percentage of the amount withdrawn or a fixed dollar amount, whichever is greater. This fee is charged upfront, further increasing the cost of the transaction.
• No Grace Period: Unlike purchases where you have a grace period to pay off the balance before interest accrues, cash advances start accruing interest from day one.
• Impact on Credit Utilization: Taking out a cash advance increases your credit utilization ratio. A high credit utilization ratio can negatively impact your credit score.
• Lower Credit Limit: Given that Milestone is a credit-building card, it is highly probable that your credit line is not that high, so the amount available for cash advances can be surprisingly low.

In short, using your Milestone card for a cash advance is a recipe for quickly accumulating debt. It should only be considered as a last resort in extreme emergencies.

Alternatives to Cash Advances with Your Milestone Card

Before resorting to a cash advance, consider these less expensive alternatives:

• Personal Loans: Compare interest rates and fees from different lenders. Personal loans often have lower APRs than cash advances.
• Balance Transfers (Carefully): If you have another credit card with a lower interest rate, you might consider transferring your Milestone card balance to that card. Be aware of balance transfer fees.
• Borrow from Friends or Family: This can be a less costly option, but be sure to agree on repayment terms.
• Negotiate Payment Plans: Contact your creditors and see if you can negotiate a payment plan.
• Sell Unwanted Items: Consider selling items you no longer need to raise cash.

These alternatives will, in most cases, be cheaper and more reliable than having to resort to a cash advance using your Milestone Credit Card.

Frequently Asked Questions (FAQs) About Milestone Credit Card Cash Advances

1. What is the typical cash advance fee for a Milestone credit card?

The exact fee varies depending on the specific terms of your Milestone credit card agreement. However, it’s typically a percentage of the cash advance amount (e.g., 3% or 5%) or a fixed dollar amount (e.g., $10 or $15), whichever is greater. Always check your card agreement for the specific details.

2. What is the typical APR for cash advances on a Milestone credit card?

Again, this depends on your specific card agreement. However, cash advance APRs are almost always higher than purchase APRs, and for cards like the Milestone credit card designed for individuals with fair or bad credit, they can be very high, often exceeding 25% or even 30%.

3. How does a cash advance affect my credit score?

Taking out a cash advance can negatively affect your credit score in several ways:

• Increased Credit Utilization: It increases the amount of credit you’re using relative to your credit limit.
• High Interest Charges: Late payments due to high interest charges can also hurt your credit score.

4. Can I use a Milestone credit card at any ATM?

While technically you can use it at any ATM that accepts your card’s network (typically Mastercard), it’s strongly advised against due to the high costs.

5. How do I find my cash advance limit on my Milestone card?

Your cash advance limit is typically a portion of your overall credit limit. You can find it in your card agreement, online account, or by contacting Milestone customer service.

6. Is it possible to avoid cash advance fees with a Milestone credit card?

No, it is not possible to avoid cash advance fees when using a Milestone credit card. These fees are a standard part of the cash advance transaction.

7. How quickly does interest accrue on a cash advance with a Milestone card?

Interest begins accruing immediately on a cash advance. There is no grace period like with purchases.

8. Does paying off my Milestone credit card balance immediately after a cash advance prevent interest charges?

No, even if you pay off the balance immediately, you will still be charged interest for the days the cash advance was outstanding.

9. Are cash advances reported to credit bureaus?

Yes, cash advances are reported to credit bureaus and can affect your credit score, especially if they lead to high credit utilization or missed payments.

10. Can I use a Milestone credit card for a cash advance if I have a zero balance?

Yes, you can use your Milestone credit card for a cash advance even if you have a zero balance, as long as you have available credit within your cash advance limit.

11. How do I request a higher cash advance limit on my Milestone card?

You can contact Milestone customer service to inquire about increasing your cash advance limit. However, approval is not guaranteed and depends on your creditworthiness and payment history.

12. Are there any specific situations where a cash advance with a Milestone card might be justifiable?

While generally not advisable, a cash advance might be justifiable in extremely rare and dire emergencies where no other options are available. However, even in such situations, carefully consider the costs and explore all other possibilities first.

In conclusion, while accessing cash with your Milestone credit card through a cash advance is technically possible, it’s a very expensive route to take. Understanding the fees, interest rates, and potential impact on your credit score is crucial to making informed financial decisions. Always explore alternative options before resorting to a cash advance.