Credit Card Cash Withdrawal

Credit Card Cash Withdrawal allows you to withdraw cash off your available credit card limit via an ATM or bank. Out of your total credit limit, card issuers assign a particular cash limit on your credit card which usually ranges from 20% to 40% of your total limit.

The credit limit is the maximum amount you can spend using your credit card whereas the cash advance limit is the maximum cash you can withdraw using the credit card. 

For example, if you are holding a credit card which has a credit limit of Rs.1 lakh, then you are eligible for a cash withdrawal limit of Rs. 20,000 to Rs. 40,000 . The remaining amount on the credit card can be used for card transactions.

Want to know more about Credit Card Limit? Click here.

Credit card cash advance fee is the fee levied on every cash withdrawal you make using your credit card. Usually, it is a small percentage of the total amount withdrawn and generally ranges between 2.5% to 3% of the withdrawn amount subject to a minimum amount of Rs. 300 to Rs. 500. Besides the cash advance charges, cash withdrawals are also implied with interest rates, as they are not eligible for the interest-free period. Thus, the finance charges are applicable from the first day. 

An important point to note here is that credit card interest rates (finance charges) are quite high; they can range from 2.5% to 3.9% per month. Moreover, interest on credit cards is compounded on a daily basis so the longer your cash advance stands unpaid the more interest will be accrued. This is why it is not advisable to opt for cash withdrawals on credit cards and, if you do, you must try to pay back the amount as soon as you can.

Cash Withdrawal Charges on Top Credit Card Providers
Credit Card Issuer	Cash Advance Fee	Interest Rates
HDFC Credit Card Charges	2.5% of the amount withdrawn or Rs. 500	1.99% to 3.6% per month
ICICI Credit Card Charges	2.5% of the advanced(withdrawn) amount, subject to a minimum of Rs. 500	2.49% to 3.67% per month
SBI Credit Card Charges	2.5% of the cash amount withdrawn or Rs. 500, whichever is higher	2.75% to 3.50% per month
RBL Credit Card Charges	2.5% of the amount withdrawn or a minimum Rs. 500	3.30% to 3.99% per month
Yes Bank Credit Card Charges	2.5% of the amount withdrawn or a minimum Rs. 300	2.49% to 3.50% per month
Axis Bank Credit Card Charges	2.5% of the withdrawal amount, subject to a minimum of Rs. 500	1.5% to 3.6% per month
Bank of Baroda Credit Card Charges	2.5% of the withdrawal amount or Rs. 500, whichever is higher	1.5% to 3.49% per month
IndusInd Bank Credit Card Charges	2.5% of the cash amount withdrawn or Rs. 300, whichever is higher	1.79% to 3.95% per month
Kotak Mahindra Bank Credit Charges	Rs. 300 per Rs. 10,000	2.49% to 3.50% per month
HSBC Bank Credit Card Charges	2.5% of the withdrawn amount or a minimum of Rs. 500	1.99% to 3.49% per month
Standard Chartered Bank Credit Card Charges	Rs. 300 or 2% of the amount withdrawn, whichever is higher	1.99% to 3.75% per month

Credit cards with low charges on cash withdrawals, are usually premium or super-premium credit cards. Some might also offer no charges on cash withdrawal, but usually come with high annual fees. These cards are listed as follows:

Credit Card	Annual Fee	Cash Withdrawal Charges
ICICI Emerald Credit Card	Rs. 12,000	1.99% on advanced amount, subject to minimum of Rs.300.
Yes Private Prime Credit Card	Rs. 10,000	Nil
Axis Bank Burgundy Private Credit Card	Rs. 50,000	Nil
Axis Bank Reserve Credit Card	Rs. 50,000	Nil
& Axis Bank Magnus Credit Card	Rs. 10,000	Nil
IndusInd Legend Credit Card	Rs. 9,999 (Nil, if applied through Paisabazaar)	Nil
Kotak Fortune Gold Credit Card	Nil	Rs. 199 per Rs. 10,000

Here are some of the advantages and disadvantages of the cash withdrawal facility. So, before you swipe your credit card at the nearest ATM, understand the pros and cons of the same-

Pros	Cons
No Documentation or Approval required	Interest will be charged from the date of transaction till the payment is made in full
Provides Immediate Cash as ATMs are accessible 24X7	A cash advance fee will be levied on every transaction
Access to flexible limits	Transactions involving cash advances are not eligible for any credit card reward points

Important Notes: When you take a cash advance on your credit card, all new purchases you make will also be ineligible for the interest-free period unless the withdrawn amount is paid off in full. This means all new purchases will also incur finance charges from the first day. Most card issuers do not count cash withdrawal amount against the annual or joining fee waiver spend milestone.

Withdrawing cash from a credit card is the same as withdrawing cash from a debit card. You can visit your nearest ATM and withdraw the required cash anytime. Cash withdrawals can be done at ATMs of any bank. However, a few banks may charge a different cash advance fee for withdrawing cash using ATMs of other banks. 

Cash withdrawal on credit cards is not reported separately to the credit bureaus. Only the whole outstanding amount, which is due along with other defaults, is reported to the credit agencies. Hence, withdrawing cash using credit cards does not impact your credit score directly.

However, in case you fail to pay even the minimum amount due on your credit card within the stipulated period then the credit score is impacted. As long as you are able to keep track of all the outstanding balances and are able to clear the payment, your credit score remains stable.

Suggested Read: How credit cards affect your credit score?

What is interest free cash withdrawal?
Usually, credit card cash withdrawals are charged with finance charges or interest rate from the date of cash withdrawals, along with the cash advance charges. However, with interest-free cash withdrawal on  a credit card, you are not charged with the interest rates, but only with the cash advance charges. Currently, IDFC FIRST Bank offers interest-free cash withdrawals, on its lifetime free credit cards like, IDFC FIRST Millennia, IDFC FIRST Wealth and IDFC FIRST Select.

Do I have to get the approval for withdrawing cash from my credit card?
No, you do not need to take approval from the bank in case your credit card has this facility. You can visit an ATM and withdraw cash almost immediately.

Do I have to pay additional fee for withdrawing cash from my credit card?
Yes, the cardholder has to pay an additional fee for availing this facility.

Where is the cash withdrawal transaction mentioned for the credit card?      
The cash withdrawal transaction is mentioned in your credit card statement. Additional fees and charges related to it are also mentioned in it.

When should I repay the withdrawn cash? Do I have to pay it in cash?
The withdrawn cash has to be repaid at the time of making payment for the statement. There is no need to pay the amount in cash. The payment can be made online, through UPI, demand draft, etc.