Credit Card Cash Withdrawal Charges: Everything You Need to Know

In the era of digital transactions and payments, the need for cash has declined, but it is still necessary for essential transactions. Credit cards and debit cards are helpful options to withdraw cash in case of emergency requirements. 

Withdrawing cash this way may seem convenient, but it comes with additional charges. Before making a cash withdrawal, it’s important to understand the credit card cash withdrawal charges so you can plan accordingly and avoid any unexpected financial surprises.

What are Credit Card Cash Withdrawal Charges?

Credit card cash withdrawal is also known as a cash advance. It allows you to withdraw cash using your card from any nearby ATM. For this facility, issuers charge credit card cash withdrawal charges. Here are some essential points to know:

• Unlike regular purchases, withdrawing cash from your card hits you with immediate fees.
• This charge is a small percentage of the amount you withdraw, typically ranging from 2.5% to 3.5%.
• With cash advances, there’s no grace period like with regular purchases.
• The interest on the dues starts accumulating from the moment you make the withdrawal.

Other Charges Associated with Credit Card Cash Withdrawals

Here are some other charges that come when you use the cash advance facility: 

• Transaction Fee per Withdrawal: This fee is applicable every time you withdraw cash through your card
• ATM Usage Fees: You may also need to pay a fee for using the ATM to make cash withdrawals
• Interest Charges: From the time of withdrawal, interest rate charges are applicable, levied on the amount of drawn cash
• Foreign Transaction Fees: If you are using your card for drawing cash in a foreign country, an additional foreign transaction charge will apply
• Bank Charges: This fee while making cash withdrawals depends on the terms and conditions of the credit card issuer

Pros and Cons of Credit Card Cash Withdrawal 

Here are some advantages and disadvantages of using a credit card for cash withdrawal through an ATM:

How to Withdraw Cash Using a Credit Card

Withdrawing cash from a credit card is as quick and convenient as using a debit card. Here are the steps:

• Step 1: Locate an ATM that supports your credit card’s network (Visa, MasterCard, etc.) and ensure the machine accepts your specific card type.
• Step 2: Insert or swipe your card into the ATM slot and enter your PIN to access your account securely.
• Step 3: When prompted, select the ‘Credit Card’ option and choose ‘Cash Withdrawal’ or a similar option to initiate the withdrawal process.
• Step 4: Enter the amount of cash you wish to withdraw, making sure it is within your card’s cash withdrawal limit.
• Step 5: Review the transaction details, confirm the amount, and proceed. 
• Step 6: After confirmation, the ATM will dispense your cash; collect the card, cash and your receipt before leaving.

The process may vary slightly depending on the ATM or bank, but these steps are generally consistent across most platforms.

Effect of Cash Withdrawals on Credit Score

Using your credit card to withdraw cash won’t directly affect your score, as cash advances are treated like regular transactions and aren’t reported separately to credit agencies. However, it’s important to recognise the financial impact these withdrawals can have. 

Cash advances often come with high interest rates and fees, which can make it harder to manage your debt. If you fail to pay your bill on time, or if you only pay the minimum balance, it can harm your score. Missed or late payments, as well as carrying high balances, will negatively affect your credit.

To protect your credit score, always aim to make at least the minimum payment on time, but paying off the full balance is even better to avoid interest.

In a financial emergency, cash always works when online transactions are not getting through or are not permissible. The need for instant access to cash is fulfilled through a credit card via this easy and seamless system. Many banks and financial institutions charge lower fees for cash withdrawals. 

You can also get such an experience with the One Credit Card. You enjoy lower cash withdrawal charges of 2.5%, allowing you to withdraw affordably. 

With the OneCard App, you can check your due dates and control your usage so that you can pay off the borrowed amount on time. The app also allows you to set budget limits to help you track your spending and use your card more confidently. Apply online now for your own One Credit Card and enjoy the ease of ATM cash withdrawals in a fraction of a minute!