What are the Fees and Charges to Withdraw Cash from Credit Card?


Credit cards are increasing in popularity day by day as they provide multiple benefits. Top credit cards come with numerous features, making them a preferred financial tool for many individuals. These cards directly increase the purchasing power of the user, allowing them to spend more than their current earnings or available funds.

However, credit cards have several additional charges payable such as credit card cash withdrawal charges. Note that credit cards are not debit cards which are only a medium to access available funds in your savings account. A credit card instead comes with a line of credit offered by the issuer which you can use to make purchases and transactions only to repay them later. As such, a cash withdrawal with a credit card is an also a credit availed from a pre-set withdrawal limit which you are liable to repay.

Leading card issuers such offer several reductions and waivers on card withdrawals. For example, the Bajaj Finserv RBL Bank SuperCard comes with a 50 day interest-free period on cash withdrawals against only nominal processing fees.

Bajaj credit cards also come with pre-approved offers that make availing such financial products quicker and easier. These offers are available on numerous financial products including credit cards, secured credits like home loans, etc., unsecured credits like business loans, personal loans, etc. You can take a check your pre-approved offer by providing your name and phone number.

However, before you avail a credit card, you should be aware of the charges applicable to them. A vital fee you should be mindful of while using your credit card is the transaction cost while withdrawing cash.

Credit card cash withdrawal charge has the following components:

  1. Transaction charges

Credit cards impose hefty fees when you withdraw money from an ATM. This charge can go as high as 2.5% of the amount withdrawn. Credit card cash withdrawal charges constitute a significant setback making people think twice before availing such cards.

 However, there are certain NBFCs which offer cards without this additional charge. Bajaj credit cards do not charge any interest on withdrawals for up to 50 days, and a nominal processing fee of 2% on the total withdrawal.

  1. Over limit fee

If you spend more than the maximum credit limit approved to you, a penalty fee has to be paid by you.  This charge is a drawback as it reduces your credit score.

A low credit score reduces your chances to avail an unsecured loan in the future. The interest rates charged are also higher.

It is advisable to keep your spending within 10% and 30% of your total credit limit. This has a positive effect on your credit score, increasing your chances of getting an affordable loan in the future.

  1. Interest rates

Credit cards allow you to spend above your income. Hence, they charge interest in the same. It is payable on both credit card cash withdrawal charges, as well as other transactions availed.

However, the main advantage that credit cards have is that the interest rate is only payable when the due amount has not been paid before the deadline of the same.

  1. Late payment charges

A late fee is charged if you default on your monthly payment liability. This charge harms your credit score as well, reducing your chances to avail affordable unsecured loans at competitive rates.

You can avoid this fee by paying the minimum amount payable on your total expenditure.

Credit cards have several benefits which outweigh these charges substantially. There are several rewards and benefits which make credit cards better than debit cards. Reward points reduce your monthly credit card bill, along with providing discounts on many services.

Tips to stay ahead of credit card charges

Although certain credit charges such as processing fees on cash withdrawals or on availing an emergency personal loan are obligatory, other penal charges can be easily avoidable. Here are some tips to do so –

  • Accruing interest on the outstanding amounts –

Make sure you pay the total outstanding as per your credit card statement to avoid accruing interest on the utilised credit. Note that credit card interest rates are higher than that on loans, in comparison.

  • Penal charges on bounced cheques –

Bounced cheques not only attract penal charges for the cheque bounce but also additional charges in case you miss the deadline. Refer to online transactions and payments modes instead.

  • Attracting interest on converted EMIs –

After converting a transaction into EMIs, try to accumulate funds to foreclose the converted transaction and avoid interest rates.

Thus, credit card usage is hugely beneficial and would enable you to save substantially.  Increasing responsible usage of credit will have a similar effect on your CIBIL score and thus help you avail financial products and services with more favourable terms in the future.

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