Every one of you has used a credit card at some point, whether it was for shopping, booking tickets, or even traveling. Although credit cards offer many benefits, from rewards points to cashback to specific offers, there are still some questions surrounding their use. As with any financial tool, credit cards have their pros and cons.
The fee on cash withdrawals from credit cards is one aspect that is quite talked about. Is it possible to withdraw the fins without incurring any charges? Let's take a closer look at this aspect here, starting with the charges associated with cash withdrawals.
Can You Withdraw Cash From Credit Card?
The first question to ask is whether you can withdraw money from a credit card. Most people think credit cards are only used for swiping or online transactions. Cash withdrawals can also be made with credit cards. When you need cash urgently and cannot use your card directly, this feature is extremely useful. However, there are some associated costs with this facility. Let's now examine the charges associated with credit card cash withdrawals.
Common Charges Associated With Credit Card Cash Withdrawal
The credit card primarily provides a cashless transaction facility that can be used in times of emergency. Using this facility, the credit cardholder can make the purchase today and pay the bill on the due date, which is usually 40-45 days after the purchase. Additionally, you can convert the amount you paid into EMI for easy repayment.
Apart from this, the credit card also offers the option to withdraw cash. There is a separate cash withdrawal limit for each credit card. Usually, it is 20-40% of the total credit card limit. There are a few charges associated with this facility, which are:
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1] Cash Advance Fees
Cash withdrawals using a credit card are subject to this fee. As a rule, it is 2.5-3% of the amount you withdraw as cash. You are charged every time you withdraw money from your credit card. There are also a few credit cards that offer zero withdrawal fees.
2] Interest Charges
Credit card withdrawals accumulate interest immediately, starting the day after the transaction. Unlike standard purchases, cash advances do not come with an interest-free buffer of 50 days, making them more expensive.
Let's see if you can withdraw money from a credit card without any fees now that you know the answers to the main questions.
Ways To Withdraw Cash Using Credit Cards Without Charges
In general, withdrawing cash from a credit card without any charges is not possible. Here are a few options for withdrawing cash from a credit card without charges:
1] Get Card With No Advance Fees
The best option is to get a card that offers cash withdrawals without any charges or fees. While it might be difficult to find one of these cards, there are a few that do. In addition, such cards usually charge high joining fees.
You may be wondering what kind of cards these are. Axis Bank Reserve Credit Card, Yes Private Credit Card, and others are notable mentions. You can withdraw cash without worrying about fees if you own one of these cards.
2] Try Paying Bills Early
Cash withdrawals with credit cards incur some charges. The next cash withdrawal is usually charged for this. By paying the bill on time, you can still avoid the extra charges, even if you do not eliminate all the fees.
3] Try Out Alternative Methods
You can withdraw funds directly from your credit card using alternative methods. Your card can be used to load e-wallets like PayTm and use that to make payments. You are using your credit card limit, not your withdrawal limit, when you use this option.
The loaded amount can then be transferred to your bank account. Direct cash advances are often more expensive than topping up wallets with credit cards.
To avoid late fees or charges, this option is usually not recommended, as it will block your credit limit.
You now know how to avoid credit card charges. There is still one important question to be addressed.
Conclusion
Knowing the different charges associated with a credit card is as important as understanding its features. A primary feature associated with credit cards is their withdrawal feature and fees. There are methods to reduce charges, but they rarely eliminate them. Maintaining a good credit score requires responsible use and timely repayment. Make informed financial decisions and approach cash advances with caution.
