Credit Card Cash Withdrawal Limit, Charges, and Interest Rates

With a Credit Card, you can withdraw cash, but it comes with a cost. Credit Card cash withdrawal charges apply, including interest. It is best to know these charges in advance and use this feature only when funds are needed in an emergency.

What is Credit Card Cash Withdrawal?

Credit Card cash withdrawal allows you to withdraw cash using your Credit Card and it does not involve any additional documentation or approvals from the Credit Card issuer. However, not all Credit Cards have this feature and the withdrawal limit and charges vary from Bank to Bank.

Understand the Difference between Credit Card Cash Advance Limit and Credit Limit

You should know the difference between Cash advance limit and Credit limit. Credit limit represents the maximum amount you can spend on your Credit Card. Cash limit indicates the maximum cash you can withdraw using your Card.

The Cash advance limit is a portion of the overall Credit limit, ranging from 20% to 40%. For instance, if your Credit limit is ₹1,00,000 then you can withdraw between ₹20,000 and ₹40,000 as cash. The remaining balance can be used for Card transactions only. Cash limit varies from Card to Card and it can change based on various factors like spending patterns, repayment behaviour and Credit history.

Know About Credit Card Cash Withdrawal Charges

A charge / fee is imposed each time you withdraw cash using your Credit Card. It ranges from 2.5% to 3% of the transaction amount with a minimum charge of ₹250 to ₹500.

It is crucial to review the Terms and Conditions related to Credit Card cash withdrawal charges provided by the Bank in order to avoid any unwanted surprises.

Understand Credit Card Cash Withdrawal Interest Rates

Credit Card cash withdrawal interest rates vary from Bank to Bank. The interest is charged at a monthly percentage rate and applicable from the transaction date till completion of full repayment. It is important to note that the interest rates are dynamic and subject to change as per the discretion of the Bank.

In addition, factors such as Card usage, spending frequency, repayment behaviour, etc. can impact the interest rates charged on a particular Credit Card. For instance, ICICI Bank charges interest rates starting at 3.40% monthly and 40.8% yearly on withdrawing money using a Credit Card.

You must familiarise yourself with the interest rates applicable on your Credit Card to understand the cost implications and make informed decisions regarding cash withdrawals.

Learn How to Withdraw Cash Using a Credit Card

Withdrawing cash using a Credit Card is just like using a Debit Card at an ATM. Visit any ATM kiosk with your Credit Card and follow the instructions for cash withdrawal. Moreover, Credit Card cash withdrawal can be made at an ATM of any Bank, regardless of the Credit Card issuing Bank.

However, you should know that some Banks may charge a different cash advance fee for withdrawals made using other Bank ATMs. Again, it is crucial to understand the Terms and Conditions applicable including associated charges before availing the cash advance facility.

Does Withdrawing Money Affect Your Credit Score?

Credit Card cash withdrawals do not directly impact your Credit Score. Cash advances are treated as regular transactions and are not separately reported to the Credit agencies. However, it is important to note that the high interest rates, fees and charges associated with cash advances can make it challenging to meet monthly payments.

If you fail to pay on time or pay only the minimum amount due, your Credit Score will get impacted, thus reflecting negatively on your Credit report. To maintain a good Credit Score, ensure timely payments of your Credit Card bills.

Credit Card Cash Withdrawal Pros & Cons

Pros -

When considering Credit Card cash withdrawal, weighing the pros and cons is crucial to make an informed decision. One of the advantages is that withdrawing money using a Credit Card offers a better response during emergencies by providing quick access to cash when needed.

Additionally, there is no requirement to have a balance in your Savings Account and you don’t need Bank approval or extensive documentation for the withdrawal. Moreover, the cash withdrawal limit is determined by your Credit limit that allows you to access a portion of your Credit line for immediate cash needs.

Cons -

There is a fee charged for every cash withdrawal transaction and there is no interest-free period like regular Credit Card transactions. Interest is calculated immediately from the date of cash withdrawal. Also, Credit Card cash withdrawals do not earn Reward Points like other Credit Card transactions.

Weighing these pros and cons will help you make an informed decision based on your financial situation and needs.

Conclusion

Credit Card cash withdrawals provide a convenient way to access cash when needed. It is crucial to understand the associated limits, charges and interest rates before utilising this feature.

Remember, Credit Card cash withdrawal should be used primarily for emergencies. Regularly review your Credit Card statement and make timely payments to ensure a healthy financial future.

FAQs

1. Can I withdraw cash with a Credit Card?

Yes, you can withdraw cash with a Credit Card at ATMs. This is called Credit Card Cash Withdrawal. However, it is important to note that it involves extra fees and immediate interest charges.

2. What are the points to keep in mind while withdrawing cash with a Credit Card?

Credit Card Cash Withdrawal involves cash advance fees and immediate interest charges. There are no reward points nor is there any grace period. The available credit limit is reduced until repayment. It also impacts your credit score due to increased utilisation.

T&Cs