Think twice before credit card cash withdraw charges

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Think twice before credit card cash withdraw charges

Withdrawing cash by a credit card is as simple as withdrawing money by a debit card. However, with credit card withdrawal, your savings stay intact.

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Withdrawing cash by a credit card is as simple as withdrawing money by a debit card. However, with credit card withdrawal, your savings stay intact. Thus you can easily withdraw money from a nearby ATM without providing any documents or waiting for approvals.

A credit card withdrawal facility is also known as a credit card cash advance. It is easy to apply for online credit cards which offer you this feature. However, there are a few things you should be aware of before you opt for credit card cash withdrawals.

Credit Card Cash Advance Limit

Not all online credit cards allow you to withdraw cash from them. However, the ones that do allow usually have a pre-approved card cash advance limit. This means that you can only withdraw money up to a certain limit. It is important to note that the credit card cash advance limit is not the same as your credit card limit. 

The credit card limit is the maximum sum that you can spend from your credit card. On the other hand, the Credit card cash advance limit is usually 20-40% of the total credit limit. The amount varies from one bank to the other and is subjected to change.

Credit Card Cash Advance Fee

Credit Card cash withdrawal charges include the credit card cash advance fee and the interest charged on the cash withdrawal. The credit card cash advance fee is charged each time you use your credit card to withdraw cash.

The fee is usually 2.5%-3% of the amount withdrawn, with the minimum amount being 300-500.

Let us take a look at the Credit card advance fee charged by the top issuers: 

  • Bajaj Finserv RBL Bank SuperCard: rbl credit card cash withdrawal charges are 2.5% of the total withdrawal amount. It is subject to a minimum of Rs.300 to Rs.500. However, on withdrawal of a small amount, the starting fee is Rs. 100.
  • SBI Credit Card: SBI charges 2.5% of the total amount. It is subject to a minimum of Rs.300.
  • HDFC Credit Card: HDFC charges 2.5% of the total amount. It is subject to a minimum of Rs.500.
  • ICICI Credit Card: ICICI charges 2.5% of the total amount. It is subject to a minimum of Rs.300.
  • AXIS Credit Card: AXIS charges 2.5% of the total amount. It is subject to a minimum of Rs.250.

Interest Charged on Credit Card Cash Advance

The interest charged on a credit card cash advance varies from bank to bank and customer to customer. In addition, the interest rates are subject to change, and it depends on the card usage, frequency of withdrawals and repayment records.

It is essential to note that interest charges are levied on both the amount withdrawn and the credit card cash advance fee. The interest is calculated from the withdrawal date till the day the amount is fully paid back.

Let us take a look at the interest charged on credit card cash withdrawal by the top issuers: 

  • SBI Credit Card: The monthly interest rate levied by SBI bank is up to 3.35%, and the annual rate is up to 40.2%
  • HDFC Credit Card: The monthly interest rate levied by HDFC bank is 1.99% to 3.5%, and the annual rate is 23.88% to 42%.
  • ICICI Credit Card: The monthly interest rate levied by ICICI bank is 2.49% to 3.5%, and the annual rate is 29.88% to 42%.
  • AXIS Credit Card: The monthly interest rate levied by AXIS bank is 2.95% to 3.5%, and the annual rate is 35.4% to 42%.

The withdrawals made from a credit card give you no reward points no matter how much you spend. The amount is also subjected to withdrawal fees and interest charges. These add up to a substantial amount at the end of the month, and failing to pay your bills on time will negatively affect your credit score. So, make sure to think twice about the credit card withdrawal charges before making a cash withdrawal from your credit card.

Bajaj Finserv RBL Bank SuperCard offers you 50 days interest-free period and affordable rbl credit card cash withdrawal charges. The card works like a credit card, debit card, loan card, and EMI Network Card. Apply for one to enjoy multiple benefits such as bonuses, rewards points, cash back, and a lot more.