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Credit card cash withdrawal: Think twice!

IamCheated.com Research Team | January 19, 2019  10:31:am

Credit Card Cash Withdrawal

A credit card is plastic money which is issued by banks and credit card companies. The credit card is loved by many people as it offers various advantages like the conversion of high-value purchases into EMI's and also provides various offers and cashbacks. Apart from these, the credit card has also got one more feature that is, cash withdrawal using a credit card. Yes, like a debit card, you can use your credit card to withdraw cash. In this blog, we will speak about everything you need to know on credit card cash withdrawal.

What is credit card cash withdrawal?

Credit card cash withdrawal or credit card cash advance is a facility which allows credit card holders to withdraw cash at the bank ATM's using their credit cards. Credit card cash withdrawal is an extra facility provided by the card issuer along with other basic services. The cardholder is allowed to withdraw cash using a credit card up to a permissible limit. Money must be repaid along with the interest and other charges.

See Also: Credit Card Safety Tips

These are the charges associated with the credit card cash withdrawal

1. Cash advance fee

Credit card cash advance fee is money charged for withdrawing cash using your credit card. This fee is charged every time you withdraw cash using your credit card. The fee charged will be a certain percentage of the amount withdrawn. Banks usually charge 2.5% to 3% of the withdrawn amount and this is subject to a minimum charge of Rs 300 to Rs 500. This amount will be reflected on your credit card bill.

2. Interest

Banks or credit card companies will charge interest on the amount withdrawn using your credit card. The interest will be charged from the date of withdrawal till the money is repaid in full. The interest rate charged by the bank will be around 2.5% to 4% a month. Interest rate usually varies across banks.

3. Late payment fee

If you do not repay the amount which you have withdrawn using your credit card on time, you will be charged late payment fee.

See Also: How banks cheat you with a credit card?

Why it is not a good idea to withdraw cash using a credit card?

There is no interest-free period if you withdraw cash using your credit card. That means you will be charged interest from the day of withdrawing money. Interest will accumulate from day one till the outstanding amount is repaid in full. So, you must avoid withdrawing cash using your credit card.

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