Cash from Credit Card: How to Withdraw & Charges

A Credit Card can be a valuable tool in this cashless age. Instead of having to carry around cash, you can simply use a Credit Card as ‘plastic money’ to pay for various products or services. However, there are times when you do need access to quick cash, e.g., to handle an emergency. Dipping into your savings might seem like the only solution, but this isn’t true. If you have a Credit Card, you can conveniently take a cash advance to tide over the emergency. But before you reach out for your Credit Card, know the following things about cash advances.

What exactly is a cash advance on a Credit Card ? 

A cash advance on a Credit Card is a cash withdrawal made using a Credit Card. You can take cash advances on Credit Cards at ATMs as well as bank branches.

Such cash advances come with a limit and banks mention the exact amount that you are allowed to withdraw as a cash advance, in your Credit Card statement. Usually, this amount is equal to or lower than the credit limit on the Card. The process of getting a cash advance at an ATM using a Credit Card is the same as withdrawing cash at ATMs using a Debit Card. However, you will have to pay Credit Card cash withdrawal charges for the same.

Things to remember when you withdraw money using a Credit Card

1. Understand payment allocation

If you are paying just the minimum amount due on your Credit Card for a specific billing cycle and you have taken a cash advance, the payment you make goes towards the outstanding balance instead of the cash advance. Cash advances carry a charge of 2.95% per month (~41.75% p.a.) from the date of withdrawal until the date of full repayment. In case you don’t repay the cash advance amount on time, it gets carried forward to the next billing cycle and you will end up paying higher Credit Card interest. Hence, it is best to pay off the cash advance amount to avoid such situations.

2. Pay your cash advances off immediately

Cash advances do not have any grace or interest-free period. Accordingly, the interest keeps on accumulating at the present Credit Card interest rate. It is better to pay off the advance to avoid heavy charges.

3. Know the rules and regulations

Every bank has its own rules and regulations about cash advances and related interest rates. It is advisable to go through the rules and regulations for your particular Credit Card on the bank’s website or in the brochure / guide sent to you with the Card.

Conclusion

Now you know what a cash advance is and how to not let it increase your Credit Card bills. So, do not hesitate to take a cash advance on your Credit Card the next time you really need it - just remember to pay it back responsibly.

FAQs

How much cash can I withdraw using my Credit Card?

The cash withdrawal limit of your Credit Card is generally a portion of the credit limit of the Card. This portion can vary by the type of Card.

What is a Credit Card Cash Advance Fee?

A Credit Card cash advance fee is a charge that the banks apply when you withdraw cash using your Credit Card. It is a fixed amount or percentage of the withdrawn sum.

What are the fees for cash withdrawal on an ICICI Bank Credit Card?

ICICI Bank charges a cash advance fee of ​2.5% of the withdrawn amount, with a minimum fee of ₹ 300. This fee is applied immediately when you withdraw cash using your Credit Card.

Is cash withdrawal using a Credit Card interest-free?

No, cash withdrawals using a Credit Card are not interest-free. Interest starts accruing from the withdrawal date itself, with no grace period, until the full amount is repaid.

When does interest start accruing on a cash advance?

Interest on a cash advance starts immediately when you withdraw money using your Credit Card, unlike regular purchases which might enjoy an interest-free period.

How much can I withdraw as a cash advance on my ICICI Bank Credit Card?

You may withdraw 20–40% of your credit limit as a cash advance. The exact amount depends on the Bank’s policies and your specific Card’s terms.