What is charged at a higher rate when withdrawing cash from an ATM using a credit card?

When withdrawing cash from an ATM using a credit card, a cash withdrawal fee is typically charged. This fee is specifically designed to compensate the credit card issuer for processing the transaction and to discourage users from treating their credit line like a regular bank account for cash withdrawals.

The nature of the cash advance is such that it usually incurs immediate costs that differ from regular purchases. Not only is there the cash withdrawal fee, which is often a percentage of the amount withdrawn or a flat fee, but transactions like these also start accruing interest rates that are typically higher than those for regular charges. Additionally, there is often no grace period for cash advances, meaning that interest begins to accumulate right away.

In contrast, options like overdraft fees and annual fees relate to standard bank account activities and the costs tied to maintaining a credit card or account, respectively, rather than the specific action of withdrawing cash through an ATM. Service charges can apply to various banking services, but they are not specifically tied to cash withdrawals using a credit card. Thus, cash withdrawal fees are the most relevant and applicable charge in this context when using a credit card at an ATM.