Credit card cash withdrawal is an innovative facility that card issuers provide to ensure that customers can gain easy access to immediate cash as and when required. Such withdrawal from the ATM can be made against the credit card as per the available cash withdrawal limit remaining out of the total credit limit. 

Such fund has to be repaid within the stipulated period along with the relevant charges and applicable fees. Various other rules govern the use of this facility one must know about. Below given are thus a few essential considerations to make when opting for a credit card cash withdrawal facility.

Few factors to take note of before withdrawing cash on credit card 

Here are certain specific terms and conditions with respect to credit card cash withdrawal that should be noted by a credit cardholder –

  1. Charges

There are specific fees and charges associated with cash withdrawal against credit cards. Such levy may go on to comprise a significantly high amount accruing in the total amount of the bill. Such charges include –

  • Fees for cash advance 

Every time cash is withdrawn against the credit card’s limit, a percentage of the total transacted amount is charged as a fee. The transaction fee that is levied may come to accumulate a hefty amount. In specific instances, however, such amount is limited, allowing users to withdraw affordably.

For instance, the Bajaj Finserv RBL Bank SuperCard allows ATM withdrawal against a flat processing fee at a nominal rate.

  • Interest

The interest that is chargeable for cash withdrawal is levied on a daily basis. It is thus essential to choose such a card that charges lower monthly and annual credit card interest rates.

Further, with select cards like the ones provided by Bajaj Finserv, you can avail an interest-free period, which allows you the flexibility of use and repayment when availing the facility.

The financial institution also extends pre-approved offers to simplify the application process of various financial products, like personal loans, business loans, etc. You can check your pre-approved offer by submitting basic details like name and contact number.

  • Late payment fee

Moreover, late payment charges are imposed if the amount is not paid in full. This charge is levied on the outstanding balance. It is in this respect that individuals should ascertain whether the aggregate of charge for credit card cash withdrawal outweighs its benefits.

  1. Impact on credit score

While availing cash advances does not directly impact credit score, a high credit card interest rate pushes up the monthly payments. So, there may be high chances that the cardholder may default in paying the due amount. It is then that the credit score would be negatively affected. A lower credit score is an impediment for availing loans or even applying for a credit card. 

Further, cash withdrawal also increases the credit utilisation ratio, a measure of one’s dependence on credit, thus hurting the score further.

  1. Reward programs

Credit cards offer different types of attractive rewards programs on various transactions. They can range from discounts to cash backs, and reward points. These offers actually incentivise the cardholders to use the payment tool for diverse transactions, helping them get the most out of their credit card. 

However, with credit card cash withdrawal, the cardholder does not receive any such benefits. Hence, cash withdrawal facility should be availed only as a last resort.

Difference between the credit limit and credit card cash withdrawal limit

While these terms are likely to be used interchangeably, there is an inherent distinction between credit limit and credit card cash withdrawal limit. 

To begin with, credit card limit pertains to the maximum amount that can be spent with the credit card. Depending on the track record, credit card limits can be increased to make higher spends. On the other hand, the cash withdrawal limit is available as a percentage of the total credit limit.

It should also be understood that the cash withdrawal facility varies from one financial institution to another. The cash withdrawal limit can thus be modified on the basis of repayment record, spending pattern, etc. Conversely, users can opt for credit card loans that are devoid of various charges included in such withdrawal, and enhance their card’s utility.


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