Credit Card cash withdrawal – If you don’t have money in your account and you want to buy something, then a credit card helps a lot. You also get benefits like discounts and reward points. But some people also withdraw cash from credit cards. But if you are also thinking of doing so, then first understand its advantages and disadvantages. Because, on withdrawing cash, you may have to pay not one or two but three types of charges, which can take a toll on your budget.
You may have to pay up to 3% charge
You may have to pay a charge of 2.5% to 3% for withdrawing cash from a credit card. The interest-free period that is available for shopping is not available for withdrawing cash. Interest starts from the day of transaction and continues till repayment. Frequent cash withdrawals can also harm your CIBIL score.
ATM maintenance fees are charged
Credit card users get 5 free ATM transactions every month just like debit card users. After this, ATM maintenance or interchange fees are charged, which do not include taxes.
Hefty late fees of up to 30%
If you do not pay the entire credit card bill, then a late payment fee of 15% to 30% may be levied on the remaining amount. This can also harm your credit score. Please note that credit card users can withdraw up to 40% of their credit limit. This limit may also change according to the bank.
Does it affect your credit score as well?
Withdrawing cash may not affect your credit score, but its charges can cost you heavily. If you do not pay the minimum due amount on time, your credit score may deteriorate.
