In India, credit cards are fast becoming one among the most favored financial tools with as many as 46.1 million users. From utility bills to high-end purchases, these cards provide instant access to a pre-specified line of credit to facilitate various purchases and transactions. Apart from this, a credit card can also offer liquid cash via ATM withdrawal facility.
This feature helps meet urgent cash requirements, especially when there is inadequate funds in savings. However, the credit card cash withdrawal fee and associated charges usually make it an expensive proposition.
Credit card usage stats
- 93% – Individuals use their credit cards to shop offline or online.
- 78% – Cardholders usually pay off the total amount due.
- 26.4% – Rise in credit card loans availed in April 2019.
What is cash withdrawal on credit cards?
Option 1: ATM cash withdrawal
Usually, debit cards allow users to withdraw cash from ATMs, where the funds are drawn from their accounts. Credit cards also enable ATM cash withdrawal facility. However, the money is borrowed from the issuing company and needs to be repaid later.
Below are some important facts about this cash withdrawal facility –
- As credit cards are primarily for card transactions, not all issuers offer this additional feature.
- Users can withdraw any amount within the available cash limit. Cash limit, a percentage of the credit limit is the maximum amount cardholders can withdraw as liquid cash.
- Cash limit differs with every credit card, depending on the user’s eligibility and other criteria.
Most importantly, the repayments can become costly for borrowers as credit card cash withdrawal fee and other charges are usually high. As a cardholder, make sure to know about all the rates and fees and repayment options before availing this facility.
Cash withdrawal fees and costs on credit cards
- Cash withdrawal fee: It is the transaction amount deducted every time you make an ATM cash withdrawal.
- Interest rate: High interest rates are levied daily for the ATM transaction. This amount is charged starting from the day of the transaction until you make full repayment.
- Finance charges: Issuers impose these rates over and above the cash advance fee. The amount is the same as that charged on the amount withdrawn.
Besides the above-mentioned, there may be additional charges too, which continue to increase the total repayment. Make sure to gather all such credit card information before proceeding.
Option 2: Emergency personal loan
Another option is to avail of an emergency personal loan. This advance is offered against the available credit limit on your card and up to a certain percentage of it. There can be various reasons to avail of personal loans on a credit cards.
Also Read: What are the Benefits of the Agricultural Credit Cards in India?
Borrow without any hassle and repay in convenient EMIs. Note that interest rates are usually high and charged as per terms. Issuing companies may incur processing fees, taxes and additional charges as well.
Advantages of credit card cash withdrawal
- The primary benefit is immediate access to instant cash as ATMs remain open 24×7 or money is disbursed to bank account directly.
- Secondly, no additional documentation or processing is required for the cash advance. You simply need to use your PIN at the ATM to withdraw cash.
- Once your request for an increased credit limit is approved, your cash limit also enhances automatically. It usually depends on parameters such as timely payments, spending patterns, late fees, etc.
The best option to make cash withdrawal more affordable is to avail a card which comes with nominal to zero credit card cash withdrawal fee. Bajaj Finserv offers their exclusive Bajaj Finserv RBL Bank SuperCard in association with RBL Bank. It comes with several attractive features, viz. –
- Withdraw cash from any ATM across India and repay with 0% interest rate. This interest-free period is available for up to 50 days. Only a nominal credit card cash withdrawal fee of 2.5% is charged during the transaction.
- An emergency personal loan is readily available with a 0% rate of interest for up to 90 days. You can opt to make the repayments in 3 easy EMIs.
Existing customers can look for customised pre-approved offers, which make the process less complicated and more time-saving. The prominent NBFC provides these pre-approved offers on credit cards and various other financial products such as business loans, personal loans, home loans, etc. Provide only a few personal details to find your pre-approved offers online.
Other eligible applicants can easily apply for the SuperCard through a simple application form available online. Make sure you go through all the credit card information and terms, assess your purposes and then opt for the most appropriate card matching your requirements.
Utilise the essential tips to make the most of your credit card and save considerably with your credit card. Increase your CIBIL score as a responsible user to enjoy better rates of terms on financial products in the future.