Credit Card Cash Withdrawal Limit, Charges, and Interest Rates (2024)

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Credit Card Cash Withdrawal Limit, Charges, and Interest Rates (1)

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Credit Card Cash Withdrawal: Limit, Charges, Interest Rates, Pros and Cons.

Credit Card Cash withdrawal is a convenient option to get quick funds in times of need. This blog post explores everything you need to know about this feature like: Charges, Interest rates, Pros, Cons and much more.

HL: 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 require you to seek approval from the Credit Card issuer. However, not all Credit Cards have this feature and the withdrawal limit and charges may vary from Bank to Bank.

HL: 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 Rs 1,00,000 then you can withdraw between Rs 20,000 to Rs 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.

HL: 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 Rs 250 to Rs 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 unwelcome surprises.

HL: 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 full repayment is made. 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 an interest of 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.

HL: 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 ATMs 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.

HL: 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 make these payments on time or pay only the minimum amount due, your Credit Score will be impacted thus reflecting negatively on your Credit report. To maintain a good Credit Score ensure timely payments of your Credit Card bills.

HL: Pros and 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 done 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.

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Credit Card Cash Withdrawal Limit, Charges, and Interest Rates (2024)

FAQs

How much interest is charged on cash withdrawal from a credit card? ›

Finance Charges on Credit Card Cash Withdrawal

Banks typically charge a rate of interest of 2.5% to 3.5% per month on all cash advances.

Do you pay interest on credit card cash withdrawals? ›

You'll pay interest at your cash transaction rate

Before you make any cash withdrawal, check your statement or your card's terms and conditions to make sure you're happy with what your interest rate will be.

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What are the charges for credit card cash withdrawal limit? ›

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 Rs 250 to Rs 500.

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How much do credit cards charge for cash withdrawals? ›

You are able to withdraw cash on a credit card with most card providers but you should be aware that there is usually a fee for this. The fee you are charged is usually a percentage of the amount being withdrawn. This is sometimes around 2-3% which can be quite expensive depending on the amount you are taking out.

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Can I withdraw cash from credit card without interest? ›

And unlike having at least 21 days to pay off a credit card purchase in full before incurring interest, there is no grace period for cash advances. That means you will be charged interest starting from the date you withdraw a cash advance.

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How much interest do you get on a cash out credit card? ›

Important: The interest rates for cash advances can range from 20% to 30% or even higher, depending on the credit card issuer and the card's cash advance transaction terms. This is significantly higher than the interest rates for typical credit card purchases, which range from 10% to 20%.

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What happens when you withdraw cash from a credit card? ›

Cash advance fee: This is the fee charged every time you withdraw cash using your Credit Card. Typically, it ranges from 2.5% to 3% of the transaction amount, subject to a minimum amount of Rs 250 to Rs 500 and is reflected in the billing statement.

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Do you get charged interest when you use cash advance on a credit card? ›

Most credit cards allow you to get a cash advance, but they typically charge an upfront fee, as well as a higher interest rate on the advanced amount, making it an expensive way to get cash from your line of credit. At Experian, one of our priorities is consumer credit and finance education.

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Does it cost extra to withdraw cash from credit card? ›

Getting cash from a credit card is one way to ensure you have money when you need it, but requesting a cash advance at an ATM can cost you. Expect to pay a cash advance fee at the ATM, and expect to pay a higher interest rate on any cash you withdraw.

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How to withdraw cash from a credit card without charges? ›

The best option is to get a card that offers cash withdrawals without any charges or fees. While it might be difficult to find one of these cards, there are a few that do. In addition, such cards usually charge high joining fees.

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Can I withdraw my credit card limit in cash? ›

Credit card cash advances let you tap into your credit line to get cash when you need it, but it's important to understand the costs of a cash advance and to know how credit card cash advances work before you take one out.

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Can I withdraw $2000 from my credit card? ›

Many credit card issuers use a separate cash advance limit as part of your overall credit limit, such as a $10,000 credit limit with $2,000 of that limit available for cash advances. A daily limit is often imposed, usually a few hundred dollars.

What is the interest charge on credit card cash withdrawal? ›

Interest Rate for Credit Card Cash Withdrawal

It ranges anywhere between 1.99 per cent to 3.49 per cent. However, in case of any default, it is 3.50 per cent (maximum). The bank may change these rates as and when mandated by RBI. The interest is in addition to the Credit Card Cash withdrawal charges.

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How to withdraw a large amount of cash? ›

If for whatever reason you need more cash than ATM limits allow, there are a few ways you can get around it:

Request an increase in your daily limit.
Make a withdrawal in person at a bank branch.
Get a cash advance with a credit or debit card.
Get cash back with a purchase at a store.

5 days ago

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How to avoid cash advance fees? ›

Alternatives to Cash Advances with a Credit Card

Open a cash account. Having either a checking account or a prepaid card that gives you access to free withdrawals at a large ATM network is one of the best ways to avoid cash advances.
Borrow money from a friend. ...
Apply for a personal loan.

Aug 26, 2022

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Which credit card allows interest free cash withdrawal? ›

Interest-free credit card cash withdrawal isn't a myth but a reality with the RBL Bank credit cards from Bajaj Finserv. This feature allows you to withdraw cash from any ATM across the country without paying any interest for up to 50 days. Only a nominal flat processing charge of 2.5% applies.

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