Credit Card Cash Withdrawal: How to Get Cash from Credit Card?


Credit cards have changed the way we use credit services. Earlier, they provide a 45-50 days free credit period. Now some cards started paying customers in the form of cashback for using credit cards. With technological advances, people have high expectations from every aspect of their lives. The cash withdrawal solution is no exception to this recent trend. With the facility of credit card cash advance, you can withdraw cash from your bank account using your credit card at an ATM. It is one of the best solutions for those who are careful and considerate of their finances.

Credit card cash withdrawal is another feature offered by the credit card provider. Making cash withdrawals is easy; swipe as you do it with your debit card. It’s more like a prepaid debit card where you must pay the amount with interest and extra charges charged by the provider within a specific period. The best part is it does not require any documentation and approvals from a bank.

Almost all credit card providers provide this service, and the permissible limit varies from 10% to 40% of your total credit limit, depending on your card. Consider this feature because it will help you in various emergencies. Also, you will only be charged when you use this service. 

Difference between the credit limit and Credit Card Cash Advance Limit:

The credit limit is the maximum limit provided to you to spend, while the credit card cash advance is a portion of the credit limit you can use as liquid cash. There is no interest or other charges when you use a credit limit and pay it back within the free credit period. You must pay interest monthly when you use the cash advance limit to withdraw cash from ATM.

For example, if your credit card has a limit of 1Lakh, you can use that amount to pay through the payment gateway, POS and pay back that same amount; there will be no extra charge within the credit period. A cash advance is generally 20% of the credit limit. So, you can withdraw only twenty thousand from ATM. Also, you must pay interest for the withdrawn amount chargeable monthly. 

How to Get Cash from Credit Card?

Getting/Withdrawing cash from a credit card is straightforward. Visit near ATM kiosks, and follow the credit card provider’s instructions to withdraw some money. Note that every ATM provider charges a fee upon withdrawal. Charges vary from one another. Please go through the terms and conditions of a credit card.

Advantages and disadvantages of withdrawing cash using a credit card

Every coin has two faces, and so has the credit card cash withdrawal. Let’s look into the first side, i.e. Advantages.

  • It acts as an emergency fund as it provides instant cash. ATMs are available 24*7 everywhere, and you can access them very quickly. You can withdraw money from any ATM provider.
  • Hassle-free Credit: You don’t need to fill out any document or get anyone’s approval to give cash, unlike any other loan.
  • Limit enhancement: You maintain good credit history when you spend and pay your bills on time without any late payments. This makes credit card providers increase your cash limit. 

Now comes the second/opposite face, i.e. Disadvantages

  • High-Interest Rates: Credit card companies charge a very high interest on cash withdrawals. Their interest rates range from 24% to 48% annually, whereas personal loan interest rates range from 9% to 24% annually.
  • Fee & Charges: Every time you withdraw cash from ATM with your credit card, you must pay a cash withdrawal charge. 
  • Reward Points: You will not receive any reward points for cash withdrawals, unlike other transactions made on the credit card.
  • No FREE Credit Period: Credit card offers a 45-50days free credit period on POS/online transactions, but you will be charged interest and withdrawal charges on cash withdrawal.

Impact of Credit Card Cash Advance on Credit Score

There is no impact on your credit score on cash withdrawal if you repay it on time. However, the Total outstanding is reflected on the credit score, not the specific cash withdrawal. Use your credit card wisely and repay it on time. If you reply before the due date, it will significantly impact your credit score.


Charges on Credit Card Cash Withdrawal

The primary usage of credit cards is to make a transaction with a card, whether through payment gateways or POS. Credit card cash withdrawal is an additional feature offered to you. Everything comes with a price so is this extra feature. They charge you in the name of a ‘credit card advance fee. Every time you drawback cash from ATM, they will charge you a certain percentage of the amount as a credit card advance fee.

Usually, they charge 3% to 5% of the amount withdrawn with a minimum charge of 300 to 500. This fee will come under the next billing cycle and be paid on your next bill. 

The cash advance fee comes along with the finance charge, which is nearly equivalent to each other. If you withdraw cash multiple times, you will be charged for each transaction based on the withdrawal amount.

Interest Charges on Credit Card Cash Withdrawal:

Interest rates on credit card cash withdrawals vary from one provider to another.

The bank that issued the Credit CardMonthly Interest Rate in %Yearly Interest Rate in %
HDFC Bank Credit Card1.99% – 3.5%23.88% – 42%
Axis Bank Credit Card2.95% – 3.5%35.4% – 42%
SBI Credit CardUp to 3.35%Up to 40.2%
Citi Bank Credit Card3.1% – 3.5%37.2% – 42%

Takeaway: Credit card cash withdrawal advantage helps you get access to instant funds, but this should be used only as a last option.