Withdrawing cash from a credit card

How does withdrawing cash from a credit card affect your credit score?

Most people will understand that withdrawing cash from a credit card is ill-advised, but it’s not all about the charges.

When you withdraw cash on your credit card, this information is recorded on your credit file and is readily available for any potential lender to see.

Seeing credit card cash withdrawals on your credit report could lead a lender to assume that you have no money left in the bank and that you are relying on your credit card to pay for essentials.

How can this affect my future credit applications?

Applying for credit when you have been making cash withdrawals on your credit card could indicate to a lender that you can’t manage your money, and lead them to question your ability to pay back any potential loan you’ve applied for. This can make it difficult for you to get credit in the future.

It is also very expensive to withdraw cash on a credit card, and although it doesn’t affect your credit score directly, it certainly does affect your finances.

Withdrawing cash on your credit card won’t necessarily thwart a credit application, but bear in mind a lender has no idea why you withdrew that money and you could appear irresponsible to them.

Decisions on credit applications are not specifically reliant on your credit score, when a lender performs a credit check they are using everything you’ve told them on your application, as well as any information on your credit file from other accounts you have.

Late payments, payday loans and withdrawing cash on your credit card are all signs you’re unable to manage your finances responsibly.

I’ve withdrawn cash with a credit card, will this affect my mortgage application?

Many people have still been accepted for mortgages after withdrawing cash on a credit card, but it’s not advisable.

You should avoid applying for a mortgage if you have used your credit card to withdraw cash in the last three months to be on the safe side.

The last thing you want is to appear to be irresponsible with your money to a mortgage provider as you’re asking them to borrow you a sizable chunk of money and you want to appear as safe a bet as possible.

I need to improve my credit score, what’s the best option?

If you’ve tried everything to improve your credit score and this has yielded minimal results, we can help!

With the icount prepaid Mastercard®, you can add the Creditbuilder™ feature to your account. With this, you will be ‘loaned’ a year’s worth of monthly fees upfront which is then paid off in 12 monthly installments of £9.95.

If you keep up with these monthly payments, the information will be sent to credit reference agencies to highlight your ability to manage credit well. Over time, this will help to increase your credit score.

Not only this, but the icount current account with prepaid Mastercard® comes with no credit checks, therefore, you don’t need to worry about the risk of harming your credit score even further by applying. Click the link below to learn more about our Creditbuilder™ feature and see how you could benefit.


Learn more about our Creditbuilder™
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