How to Withdraw Cash Using a Credit Card: 5 Simple Steps

Just like a debit card, you can use your credit card to withdraw cash from an ATM. This can be a big help in case of an emergency as there are no additional documents or approvals required. You just need to visit the nearest ATM, use your card, enter the amount and your PIN and withdraw cash. However, consumers should note that the withdrawal limits, fees and charges and certain terms and conditions may differ from bank to bank and also vary for different cards from the same provider.

The process to withdraw cash from credit card is the same as that with a debit card.

The amount you can withdraw depends on the cash limit available on your card.

When you get a credit card, the issuer offers you a credit limit which is the maximum amount that you can spend on the card. A portion of your total credit limit is offered as Cash Advance or Cash Withdrawal Limit, up to which you can withdraw cash from your credit card through an ATM.

The cash limit usually ranges between 20% to 40% of the total credit limit. So if your total credit limit is Rs. 2 Lakh and the issuer gives 30% of that as cash limit, you can withdraw up to Rs. 60,000 using your credit card. This limit varies for different card variants and may also vary from consumer to consumer.

When you withdraw cash using your credit card, a one-time cash withdrawal fee is applicable. This is generally charged as percentage of the amount withdrawn (subject to a maximum cap). However, a few issuers charge a flat fee. Some card issuers may also charge an additional fee if you withdraw from a different bank’s ATM.

The table below shows credit card cash withdrawal charges for top card issuers in India:

Note: These charges are subject to change at the bank’s discretion. Consumers are advised to check the official terms and conditions on the respective bank’s MITC

The main reason why credit card cash advance is one of the costliest forms of borrowing is the interest rate or finance charges applicable on these withdrawals. Credit card interest rate on cash withdrawal usually ranges from 2.5% to 3.5% or higher, depending on the card variant.

Moreover, when you withdraw cash using your credit card, the interest-free period on your credit card becomes invalid. This means, once you withdraw cash, any new purchases that you make using your card will start attracting interest charges from the day of the transaction. Since credit card finance charges are so high, even a small amount can quickly spiral into a big debt. This is why it is advised to avoid cash withdrawals or use them only as the last resort in case of an emergency.

The table below shows the finance charges or interest rate on credit card cash withdrawal charges by the top card issuers in India:

Note: These charges are subject to change at the bank’s discretion. Consumers are advised to check the official terms and conditions on the respective bank’s MITC.