Credit Card Cash Withdrawal Charges

Credit Card Cash Withdrawal

Credit card cash withdrawal also known as credit card cash advance is a feature offered by certain banks against their credit cards. Using this facility, you can withdraw funds in the form of cash from your credit card. Also, you get access to instant liquid cash without providing any documentation or requiring any approval.

How Does Cash Withdrawal Using Credit Card Work?

The credit card cash advance feature lets you withdraw cash within the card’s cash withdrawal limit. You can withdraw the amount easily by swiping your card at the bank’s ATM. The amount gets deducted from the credit card’s available balance. You are then required to repay the cash you withdrew on your card along with any fees and charges that the bank levies.

How is the Credit Card Cash Withdrawal Limit Different from Credit Limit?

The credit limit on a card is the maximum funds that you can borrow against it. The credit card cash withdrawal limit, on the other hand, is the maximum cash you can withdraw from the card. This limit is also known as the credit card cash advance limit and forms of a part of the total credit limit on the card. While the CC withdrawal limit varies from bank to bank, it usually ranges between 20% to 40% of the card’s total credit limit. The available CC cash advance limit reduces every time you use the card to withdraw cash. The limit is restored when the amount withdrawn is repaid in full.

What is Credit Card Cash Advance Fee?

The credit card cash advance fee is a one-time fee that is charged when you withdraw money from your credit card. The fee is a percentage of the total amount withdrawn, which typically ranges between 2.0% to 3.0%, or a minimum amount between INR 100 to INR 500, depending on the bank. The credit card cash withdrawal charges are mentioned in the next month’s statement.

The credit card money withdrawal charges, in the form of cash advance fee, for some of the top cards are mentioned below-

What are the Interest Charges on Credit Card Cash Withdrawal?

Apart from cash advance fee, credit card ATM withdrawal charges also include finance charges. The finance charge is levied on the amount withdrawn and is reflected in your credit card statement. The credit card interest rate for cash withdrawal varies from bank to bank as well as with the card type. Usually, it ranges between 2.5% to 4% per month and is communicated at the time of issuance of the credit card. However, before attempting cash withdrawal from your credit card, it might be wise to check the cash withdrawal interest rate as it is dynamic and subject to change at the bank’s discretion. The credit card cash withdrawal charges, in the form of interest, for some of the top cards are mentioned below-

How to Withdraw Cash Using a Credit Card?

The process of withdrawing cash using a credit card is the same as withdrawing cash from a debit card. You can visit your nearest ATM and withdraw the money required in a few easy steps –

• Insert the credit card in the card slot of the ATM

• Enter the credit card PIN

• Enter the amount you wish to withdraw from your card

• Click ‘Submit’

What is the Impact of Credit Card Cash Advance on Credit Score?

The amount you withdraw from the credit card as cash is not informed to the credit bureaus and hence doesn’t have a direct effect on your credit score. However, in case while repaying the withdrawn amount, you fail to clear the minimum amount due within the due date, your credit score goes down. It is therefore important to be informed about the outstanding balances and the payment due dates so that your creditworthiness is not negatively affected.

Advantages and Disadvantages of Credit Card Cash Withdrawal

There are several advantages of opting for cash withdrawal through credit card-

• You get cash from credit card instantly after you apply for a credit card

• You can withdraw cash using your credit card from the bank’s ATM

• One of the easiest ways to get cash as it requires no prior approvals or documentation

Despite the advantages, there a few things you should be aware of when opting to withdraw money from credit card-

• Every time you withdraw credit from your credit card you have to pay the cash advance fee and other charges

• Cash withdrawal through credit attracts an interest charge which must be paid till the entire amount withdrawn is returned

• Cash withdrawals do not come with an interest free period

• No credit card reward points can be earned on cash advances