A financial expert warned people against ever using their credit card during a withdrawal at the ATM.
Amanda and Siobhán are the founders of Hiver Academy. It’s an organization that aims to help people build financial literacy and feel confident when it comes to their money. Recently, Amanda took to the company’s TikTok account (@hiveracademy) to share an important piece of advice.
“You can go to an ATM and insert your credit card and take out cash, yeah. But here’s why you should never do that,” Amanda says right at the start of the video. She adds that someone she knows personally leaked this lesson the hard way.
“They were having to pay their rent in cash and they thought, ‘Oh my gosh, like instead of going to an ATM using my debit card, I’ll use my credit card ’cause then I get all these points, and then I’ll just pay it off at the end of the month,’” Amanda says of her friend.
She continues to say that although her friend thought this would be a win-win situation, after a while, they noticed that their credit card statements had an extremely high interest charges.
Amanda says her friend was puzzled. “They’re like, ‘Why am I getting such high interest charges? This is weird. I’m paying my credit card off every month,’” she recalls her friend saying.
Why you could get high charges
“When you buy something with a credit card, you don’t pay any interest unless you don’t pay off your credit card whenever your bill is due. But with a cash advance, when you’ve taken money out, like actual cash out from your credit card, that interest starts adding up every single day and it is huge,” Amanda reveals.
She adds the only time it makes sense to withdraw cash using a credit card is in an emergency, with no other options for money.
Amanda signs off the video with some more advice. She says, “If you’re tempted to use a cash advance in everyday life, definitely go into the bank and see what other options you have, either a personal loan or a line of credit. Those are such better options.”
@hiveracademy If it seems too good to be true, it almost certainly is🙃 #creditcarddebt #cashadvance #creditcardpoints #moneyhabits ♬ original sound – Amanda & Sio | Hiver
Financial tips are always popular on social media, as consumers look to save a dollar in financially trying times. The Daily Dot previously reported on viral posts related to financial literacy, including one in which an expert warns against linking your bank account to your Apple Pay digital wallet.
Viewers resonate
Amanda’s tip resonated with a number of TikTok users, with the video receiving 681,200 views. Many commenters shared that high interest rates for cash withdrawals on a credit card was not the only piece of information they were unaware of.
“I didn’t even know you could take cash out from a credit card,” wrote one person, who received almost 7,000 likes.
“Whatttt … I’ve never done this but good to know lolol,” read another comment.
But a number of more financially savvy commenters expressed shock that anyone would be unaware of this.
“19.99% interest on cash withdrawals is average,” shared one person.
“You telling me people don’t read the terms and conditions??” said another.
“Even though this is general knowledge, this basic financial education should be part of every school’s curricula,” stated someone else.
The Daily Dot reached out to the Hiver Academy via the website’s contact form.
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