Credit Card Cash Withdrawal - Things You Need to Know

Updated on: 14 Dec 2021 // 30 min read // Credit Cards
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Credit Card Cash Withdrawal - Things You Need to Know

Credit Card Cash Withdrawal simply means withdrawal of cash from an ATM via your Credit Card. It is the very costliest means of borrowing money which is also known as a Cash advance or Short term loan. It helps in getting instant liquid cash to the cardholders in case of a real emergency. In this facility, you do not require any bank approval nor any documentation. 

Table of Content:

  1. Intro
  2. What is Credit Card Cash Withdrawal?
  3. Credit Card Cash Withdrawal Limit
  4. Credit Card Cash Withdrawal Charges
  5. Top 5 Bank Credit Card Cash Withdrawal Charges
  6. How to Withdraw Cash Using a Credit Card?
  7. Pros & Cons of Credit Card Cash Withdrawal
  8. Difference Between Credit Card Cash Advance Limit & Credit Limit
  9. What is the Credit Card Cash Withdrawal Interest Charges?
  10. FAQs

What is Credit Card Cash Withdrawal?

Credit card cash withdrawal allows credit card users to withdraw cash from ATMs with the help of their credit cards. It is an additional feature offered by a bank. The cardholders are able to withdraw cash but within the permissible limit. But, the cardholders are required to repay the same along with the interest & other charges. 

Credit cardholders must be aware of the fact that the feature of credit card cash withdrawal is not available on all credit cards, and the permissible limit to withdraw cash & the finance charges may also differ in the case of different banks.

Credit Card Cash Withdrawal Limit

Credit Card cash withdrawal limit allows credit card users to withdraw cash within the permissible limit using their credit cards from their bank’s ATM.

Bank allows a particular credit card cash withdrawal limit which normally ranges between 20% to 40% of the total limit out of the total card limit.

The credit limit of the card is the maximum amount one can spend using the credit card, whereas cash advance limit is the maximum amount of cash one can withdraw using the credit card.

For example, if I have a credit card that has a credit limit of Rs.2 lakh, then, in that case, I am eligible for a cash withdrawal limit of Rs. 40,000 to Rs. 80,000. So, I would be able to use the remaining amount on the credit card for other card transactions.

Credit Card Cash Withdrawal Charges

On every cash withdrawal transaction which is being made using a credit card, Credit Card Cash Advance Fees is levied. Whenever you use a credit card to withdraw cash, a small percentage of the amount withdrawn will be charged, which is considered as Cash Advance Fees.

Generally, banks charge about 2.5% to 3% of the amount withdrawn subject to a minimum fee of Rs.300 to Rs.500 as a credit card cash advance fee. 

This advance fee will be reflected in next month's Credit Card statement. It should also be considered that interest charges are also being attracted at a rate similar to what is charged on the amount withdrawn.

Also, if you make multiple cash advance transactions, every transaction would attract cash advance fees depending upon the amount withdrawn.

Top 5 Bank Credit Card Cash Withdrawal Charges

Below mention are the fees charged on a cash advance by Top 5 banks on Top 5 cards:

Credit CardsCash Advance Fee
SBI Card Elite

At Domestic ATMs- 2.5% of the transaction amount, subject to a minimum of Rs. 300

At International ATMs- 3% of the transaction amount, subject to a minimum of Rs. 300

HDFC Regalia Credit Card2.5% of the transaction amount, subject to a minimum of Rs. 500
Citi PremierMiles Credit Card2.5% on the billed amount withdrawn, subject to a minimum of Rs. 500
American Express Platinum Reserve Credit Card3.5% of the Cash Advance amount, subject to a minimum of Rs. 250
HSBC Visa Platinum Credit Card2.5% on the billed amount withdrawn, subject to a minimum of Rs. 300

How to Withdraw Cash Using a Credit Card?

Withdrawal of cash using a Credit card is similar to that using a Debit card. One just needs to visit the nearest ATM Kiosk and then follow instructions as displayed on the screen to withdraw the money. Cash can be withdrawn any from any ATM irrespective of the credit card issuing bank.

But, some banks do charge cash advance fees for withdrawing cash from other bank's ATMs. Also, some banks keep capping on maximum & minimum cash that can be withdrawn per transaction or per day.

So, before availing of the cash advance facility, one should be aware of the Terms & Conditions, which are applicable on the card, along with the fees & charges. In order to prevent using the card beyond its limit, it is important to know the cash limit available on the card in case the card limit is exceeded, and the bank will charge an over-limit fee along with the finance charges.

Pros & Cons of Credit Card Cash Withdrawal

No Documentation of Approval requiredInterest will be charged from the date of transaction till the payment is made in full.
Provides Immediate Cash as ATMs are accessible 24X7A cash advance fee will be levied on every transaction
Access to flexible limitsTransactions involving cash advances are not eligible for any credit card reward points.

Difference Between a Credit Limit & Credit Card Cash Advance Limit

By credit limit, we mean the maximum amount that can be spent on a particular credit card; like ways by cash limit, we mean maximum cash that can be withdrawn using a credit card. The credit limit of credit cards includes a cash limit as well. Normally, banks offer 20%-40% of the total credit limit as a cash limit.

For instance, if the total credit limit is Rs 2 lakh, a cash amount of Rs 40000-80000 can be withdrawn using a credit card. The remaining limit can be used for normal card transactions only.

The cardholder gets to know the cash limit of the credit card at the time of issuance of the card by the bank.

The cash limit can vary from card to card and cardholder to cardholder, which indicates that the cash limit may not be the same for all the credit card variants of a bank. The cash limit is not fixed and is subject to changes at any point in time. The revision of the cash limit is under the bank's discretion which will depend on the spending pattern of the cardholder, repayment of credit, any defaults made in making the payments.

In case of any revision, the same would be communicated to the cardholder via e-mail or through messages.

What are the Interest charges on Credit Card Cash Withdrawal?

Interest charges would be levied depending on the type of credit card in case of cash withdrawal via credit card. If the outstanding amount is paid on time, one would be charged a lesser amount of interest, but if it's long to pay the outstanding amount, more amount of interest would be levied.

Normally, banks charge interest ranging from 2.5% to 3.5% per month, which depends on the variant of the card and also varies from one bank to another.

Interest Charges on credit card cash advance by top banks:

Below mentioned are the rate on interest levied on credit card cash advance facilities by popular banks in India:

BankInterest Charges on Credit Card Cash Withdrawal
% per month% per Annum
SBI Credit CardUp to 3.350%Up to 40.20%
HDFC Credit Card1.99% – 3.50%23.88% – 42%
Axis Bank Credit Card2.95% – 3.50%35.40% – 42%
ICICI Bank Credit Card2.49% – 3.50%29.88% – 42%
Citibank Credit Card3.10% – 3.50%37.20% – 42%

Frequently Asked Questions (FAQs):

 When should the amount of cash withdrawn be repaid, and how?

Whenever you make payment of your statement, you should repay the amount withdrawn. It can be made via UPI, DD or online etc., there is no such need to pay it in cash.

 How can I know the cash withdrawal limit of my credit card?

The cash withdrawal limit would be mentioned in the Welcome Kit we receive at the time of receipt of your credit card or in the terms & conditions of your credit card.

Also, you can go through the credit card's net banking to know the total & available cash limit. Otherwise, you can call the customer care service for the same as well.

  Is it advisable to withdraw cash via credit card?

To be very honest, withdrawing cash from a credit card is not considered to be as good as it sounds. Below mentioned are the steps if you're thinking about a cash advance.

Step 1: Think of all other options available, if any

Step 2: Check whether your credit card facilitates cash advance or not?

Step 3: Check the cash advance limit out of the credit card limit.

Step 4: Set the PIN

Step 5: Take time to understand the terms and fees for cash advances

Step 6: Think about the repayment

Step 7: Get the cash advance.

Step 8: Payback cash advance asap.

 Can excess cash be withdrawn from a credit card?

Generally, credit card companies do not allow the withdrawal of cash from credit cards in excess of to available credit limit. But, excess cash withdrawal would lead to a reduction in the available credit limit & a higher credit card interest amount is required to be paid on the amount withdrawn.