Just about everyone has a credit card to pay for purchases. But what about withdrawing cash from your credit card? Does everyone do it? Not really. Let’s take a good hard look at Credit Card Cash withdrawal – and understand the whole thing better.
Credit Cards are an easy way to pay for purchases. They are like mini credit facilities – where you can buy things that you pay for later. Several cards have cash components – which give instant liquid cash to card holders. It is an additional feature offered by banks on a credit card. But is it a good idea to withdraw cash on a Credit Card?
Credit Card cash withdrawals are easy. No fuss. And instant. You just go to an ATM and take the cash that you need, within the allocated limit. It doesn’t need any special approval from the bank or anything. And you pay it back along with the charges that come with cash withdrawals.
Credit and Cash limits on cards
Every card has a credit limit – that is the maximum amount that can be spent on that card. This has been set by the bank based on a person’s income, his credit worthiness and repayment capability. And there is a fixed cash limit on a card as well. This varies from card to card and from customer to customer. It can be changed at the discretion of the Bank at any time as well. A card holder cannot withdraw more than the specified limit. The credit and cash limits will be communicated to card holders when the card is being issued.
How to withdraw money from a credit card
You can withdraw money from a credit card in a few easy steps –
- You go to an ATM.
- Insert your credit card in the machine.
- Put in your PIN.
- Withdraw cash as per availability.
Cash Advance Fees
When a person draws cash on a Credit Card, it attracts a fee which is called the Credit Card Cash Advance Fee. This fee, which is a percentage of the amount withdrawn, will appear in the next billing statement, along with the entire amount withdrawn and interest levied on the withdrawn amount. Each time a person draws cash on a Credit Card, the fee will be charged – even if you draw cash multiple times on the same day.
Interest on Credit Card Cash Withdrawals
Cash advances on credit cards also attract interest, apart from the cash advance fees. The interest is a monthly percentage rate that is levied from the date of the transaction to the date the repayment is made in full. Most banks typically charge a rate of interest of 2.5% to 3.5% per month on all cash advances. This varies from bank to bank.
Over the Limit fees
It is important to know how much your cash limit is – and withdraw only within those limits. If you exceed the limit for some reason, an Over the Limit charge will be charged.
Some pointers –
- You can withdraw cash from any ATM – but it is better to stick to your own card’s bank ATM to avoid any extra charges.
- There may be a cap on the amount of cash you can withdraw in a day. You should find that out before you withdraw cash.
- Withdrawing cash from a Credit Card won’t affect your credit rating or score – but your repayment pattern will. So if you withdraw any cash, make sure that your repayment is above par so that you don’t attract enormous charges and your credit rating is unaffected.
Advantages of Credit Card Cash Withdrawal
- You get instant cash when you need it.
- No documentation or prior approvals are required.
Disadvantages of Credit Card Cash Withdrawal
- Each time you withdraw cash, you need to pay the cash advance fee and other charges.
- You pay an interest – charged from the date of your cash withdrawal until you repay it entirely.
- You won’t get any Reward Points on cash advances.
- Partial payments or no payments by the due date may result in interest charges on all purchases in addition to the cash advance fees.
So while a credit card cash advance might look like a very convenient way to get cash, it is expensive and should only be used if there is no other way out.
FAQs
Most credit card companies allow cardmembers to use their credit card at an ATM, which will show up as a cash advance on your credit card statement. You can use your credit card at most ATMs the same way you'd use a debit card, but you aren't drawing from a bank account.
Can I pull money out of ATM from credit card? ›
Most credit card companies allow cardmembers to use their credit card at an ATM, which will show up as a cash advance on your credit card statement. You can use your credit card at most ATMs the same way you'd use a debit card, but you aren't drawing from a bank account.
Can I send money from my credit card to my bank account? ›
It is possible to use a credit card to transfer money into a bank account by using a cash advance or balance transfer check, but we can't recommend it. Cash advances are risky because of the high interest rates and costly one-time fees. Balance transfers can lead to more debt if they're not handled correctly.
How to withdraw cash from a credit card without fees? ›
No, you can't withdraw cash on a credit card without paying fees. But there are a few ways you can minimise how much you pay. We recommend you: Look into money transfer cards, which let you transfer money from your credit card to your current account.
How do I get a PIN for my credit card? ›
While it's not always possible to receive your PIN over the phone, you can start the request by calling your credit card issuer. After that, PINs are usually mailed to the address your card company has on file. However, your issuer may give you other options, such as text message or email.
How to get cash off a credit card? ›
If you need to take money out of a credit card at an ATM, here's how to request a cash advance:
- Insert your credit card into an ATM.
- Enter your credit card PIN.
- Select the “cash withdrawal” or “cash advance” option.
- Select the “credit” option, if necessary (you may be asked to choose between checking, debit or credit)
If you are getting a cash advance from an ATM, you'll need a credit card PIN. In this case, your PIN helps verify that you are the card owner. Like a debit card, when you make a cash advance at an ATM, you'll insert your chip into the card reader, enter your PIN, and follow the prompts to get cash.
How to transfer money from credit card to bank account instantly? ›
Net Banking: If your Bank provides net banking services you can log in to your Account and access the 'Credit Card' section. Then choose the 'Transfer' option and enter the amount you want to transfer to your Bank Account. Follow the prompts and complete the transaction.
How to convert credit card to cash? ›
Step 1: Use your credit card to withdraw the desired amount of cash from an ATM. Keep in mind that credit card cash advances typically have higher interest rates and fees compared to regular credit card purchases. Step 2: Take the cash to your bank and deposit it into your bank account.
Can you transfer money from a credit card to Cash App? ›
Once your credit card is linked to your Cash App account, you can transfer money from it to your Cash App balance by following these steps: Tap the "Money" tab in the Cash App app. Tap "Add Cash". Enter the amount of money you want to transfer from your credit card.
To avoid charges when withdrawing money from a credit card, use it only in emergencies, repay the amount as quickly as possible to minimise interest, seek cards with low cash advance fees, and consider alternatives like personal loans or overdraft protection which might offer lower costs.
Is it OK to withdraw money from credit card? ›
Taking a cash advance may not impact your credit score, but the high charges associated with cash withdrawals drive up monthly payments. Failure to pay the minimum due amount can affect your credit score adversely. Be sure to make your payments on time! Most banks offer rewards to Credit Card holders.
Why is it not a good idea to withdraw cash from a credit card? ›
They're very expensive
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.
Can I use a credit card at an ATM? ›
Cardholders can use a credit card at nearly any ATM and withdraw cash as they would when using a debit card, but instead of drawing from a bank account, the cash withdrawal shows up as a charge on a credit card. Forbes Advisor does not recommend using a credit card for a cash advance.
Can I get credit card PIN online? ›
Generating your PIN online is quick, convenient and secure, as you can do it from the comfort of your home through ICICI Bank Internet Banking or iMobile Pay. Once you've generated/changed your Credit Card PIN online, you can start using it for online and offline transactions immediately.
How do I find my card PIN number? ›
If you've forgotten your debit card PIN, some banks may offer a way to retrieve it through their website or app. You can also call a customer care representative, or find a local branch for help. You'll probably still need to verify your account ownership and may be directed to reset the PIN for security reasons.
What is the ATM withdrawal charge for credit card? ›
Every time a credit card is used to withdraw cash, a cash advance fee, which typically is the percentage of the withdrawn amount, will be charged. Typically banks charge 2.5% to 3% of the withdrawn amount subject to a minimum amount of Rs. 300 to Rs.
How to withdraw $500 from a credit card? ›
The ATM may ask whether you'd like to use checking, debit, or credit. Select credit and enter the amount of money you'd like to withdraw. The ATM should warn you of any fees you'll pay for the transaction. Note that this doesn't include card-specific fees, such as cash advance APR and one-time fees.
How can I take money from my credit card? ›
- Step 1: Call your credit card company. ...
- Step 2: Once connected, request to speak with a representative. ...
- Step 3: Specify the amount of money you wish to transfer to your bank account. ...
- Step 4: Provide the representative with your bank account details.
Cash advances are typically capped at a percentage of your card's credit limit. For example, if your credit limit is $15,000 and the card caps your cash advance limit at 30%, your maximum cash advance will be $4,500.
