Credit card cash withdrawal refers to the ability to take out cash from an ATM using your credit card. However, this is one of the costliest forms of credit available in the market and should be used only in a real emergency. Upon withdrawing cash, you will incur credit card finance charges, applicable from the day of withdrawal, and cash withdrawal charges every time you use the facility. More details on credit card cash withdrawal are given below.
Credit Card Cash Withdrawal Limit
Credit Card Cash Withdrawal allows you to withdraw cash off your available credit card limit via an ATM or bank. Out of your total credit limit, card issuers assign a particular cash limit on your credit card which usually ranges from 20% to 40% of your total limit.
The credit limit is the maximum amount you can spend using your credit card whereas the cash advance limit is the maximum cash you can withdraw using the credit card.
|For example, if you are holding a credit card which has a credit limit of Rs.1 lakh, then you are eligible for a cash withdrawal limit of Rs. 20,000 to Rs. 40,000 . The remaining amount on the credit card can be used for card transactions.|
Want to know more about Credit Card Limit? Click here.
Pros and Cons of Cash Withdrawal through Credit Card
Here are some of the advantages and disadvantages of the cash withdrawal facility. So, before you swipe your credit card at the nearest ATM, understand the pros and cons of the same-
|No Documentation or Approval required||Interest will be charged from the date of transaction till the payment is made in full|
|Provides Immediate Cash as ATMs are accessible 24X7||A cash advance fee will be levied on every transaction|
|Access to flexible limits||Transactions involving cash advances are not eligible for any credit card reward points|
What are credit card cash withdrawal charges/fees?
Credit card cash advance fee is the fee levied on every cash withdrawal you make using your credit card. Cash Advance Fee is a small percentage of the total amount withdrawn. Generally, banks charge about 2.5% to 3% of the withdrawn amount subject to a minimum amount of Rs.300 to Rs.500 as credit card cash advance fee.
It is to be noted that the cash advance fee also attracts interest charges at a rate similar to what is charged on the withdrawn amount. Also, this fee is reflected in the subsequent month’s credit card statement.
Credit Card Cash Withdrawal Charges on Top Credit Cards
The table given below shows the cash advance fee charged on some popular credit cards-
|Credit Cards||Cash Advance Fee|
|SBI Card Elite||2.5% of the transaction amount or Rs. 500, whichever is higher|
|HDFC Regalia Credit Card||2.5% of the transaction amount or Rs. 500, whichever is higher|
|Citi PremierMiles Credit Card||2% on the billed amount withdrawn, subject to a minimum of Rs. 300|
|Amazon Pay ICICI Credit Card||2.5% of the Cash Advance amount, subject to a minimum of Rs. 300|
|Flipkart Axis Bank Credit Card||2.5% on the billed amount withdrawn, subject to a minimum of Rs. 500|
What are the Interest Charges on Credit Card Cash Withdrawal?
Credit card cash withdrawals are not eligible for the interest-free period. This means finance charges will be applicable on these transactions from the first day. An important point to note here is that credit card interest rates (finance charges) are quite high; they can range from 2.5% to 3.9% per month. Moreover, interest on credit cards is compounded on a daily basis so the longer your cash advance stands unpaid the more interest will be accrued. This is why it is not advisable to opt for cash withdrawals on credit cards and, if you do, you must try to pay back the amount as soon as you can.
Click here to know more about Credit Card Interest Rates
Interest on Credit Card Cash Withdrawal for Top Card Issuers
Listed below are the interest charges levied on credit card cash advance facility by popular banks in India-
|Card Issuer||Interest Charges on Credit Card Cash Withdrawal|
|% per month||% per annum|
|SBI Credit Card||Up to 3.35%||Up to 42%|
|HDFC Credit Card||1.99% – 3.6%||23.88% – 43.2%|
|Axis Bank Credit Card||1.5% – 3.6%||19.56% – 52.86%|
|ICICI Bank Credit Card||2.49% – 3.67%||29.88% – 44%|
|Citibank Credit Card||Up to 3.75%||Up to 45%|
How to Withdraw Cash using a Credit Card?
Withdrawing cash from a credit card is the same as withdrawing cash from a debit card. You can visit your nearest ATM and withdraw the required cash anytime. Cash withdrawals can be done at ATMs of any bank. However, a few banks may charge a different cash advance fee for withdrawing cash using ATMs of other banks.
Impact of Cash Advance on Credit Score
Cash withdrawal on credit cards is not reported separately to the credit bureaus. Only the whole outstanding amount, which is due along with other defaults, is reported to the credit agencies. Hence, withdrawing cash using credit cards does not impact your credit score directly.
However, in case you fail to pay even the minimum amount due on your credit card within the stipulated period then the credit score is impacted. As long as you are able to keep track of all the outstanding balances and are able to clear the payment, your credit score remains stable.
Suggested Read: How credit cards affect your credit score?
Credit Card Cash Withdrawal FAQs
Is the facility of cash withdrawal available on all credit cards?
No, the facility of cash withdrawal is available on select cards and the consumer is informed beforehand about the facility on his credit card.
Do I have to get the approval for withdrawing cash from my credit card?
No, you do not need to take approval from the bank in case your credit card has this facility. You can visit an ATM and withdraw cash almost immediately.
Do I have to pay additional fee for withdrawing cash from my credit card?
Yes, the cardholder has to pay an additional fee for availing this facility.
Where is the cash withdrawal transaction mentioned for the credit card?
The cash withdrawal transaction is mentioned in your credit card statement. Additional fees and charges related to it are also mentioned in it.
When should I repay the withdrawn cash? Do I have to pay it in cash?
The withdrawn cash has to be repaid at the time of making payment for the statement. There is no need to pay the amount in cash. The payment can be made online, through UPI, demand draft, etc.