Be it for shopping, dining, flight booking, or buying luxury thing, credit cards make all of this possible even when you have a financial crunch. The instant credit facility makes you less stressful about cash. Unlike loans, credit cards don’t require much documentation, and you can avail one without any hassle. The easier is its availability, the more havoc it can create in your life if you don’t use it diligently.
There are times when you try to withdraw money from credit card; you may not have been able to repay the credit loan on time. Therefore, when you withdraw cash using the card, here are some dos and don’ts to keep in mind.
Dos of withdrawing cash on credit card:
Cash withdrawal limit: While most credit cards allow customers to do transactions online and offline, some cards help you with instant cash. You may require cash during an emergency; you directly use your credit card at an ATM to withdraw cash. However, you should remember that credit cards have a withdrawal limit, which is different for every card.
Fees on every withdrawal: You should know that withdrawal of cash attracts fees that vary from bank to bank. Banks may charge cash advance fee of 2.5% on the withdrawn amount, interest of 2.95% per month from the date you withdraw cash till the time you pay. You should also keep in mind that if you withdraw cash from any other ATM other than your bank credit card, then you will attract even more fees, as well as credit card atm withdrawal charges.
Interest charges: Your bank has a right to change interest rates for specific cards considering your spending pattern, use of the card, and repayment history. There is no interest-free period. An interest of 2.95% will be applicable once you withdraw the amount and it will remain unless you repay the credit loan.
Don’ts of withdrawing cash on credit card:
Loss of Reward Point: The best thing about credit cards is that when making a purchase, you receive reward points. This can be in the form of gifts, discounts, or any other deals. If you’re a long-term credit cardholder, you may have accumulated reward points, but as soon as you withdraw money from credit card, you may not receive the points. Opt for cash only when there’s an emergency.
Affects your credit score: Withdrawing cash using credit cards is easy, but what if you’re not able to repay the amount on time? Delay in credit loan can directly affect your credit score. Having a bad credit score means you may not get a loan quickly.
High-interest rate: Credit card cash withdrawal interest can prove to be a costly affair. Your bank will charge a high-interest rate, which will be levied from the day of the transaction.
How to do credit card atm withdrawal?
Just like you use a debit card for transactions at ATMs, you can use your credit card ATM withdrawal facility the same way. You can withdraw money from any ATM; however, the advance fee will be higher if you don’t do it at your bank.
Visit your bank’s ATM kiosk
Insert the credit card and enter the “PIN.”
Select “Cash Withdrawal” option
Enter the amount and press “OK.”
You will get a message on your registered mobile number about the withdrawal details.
Use the withdrawal option only when necessary
Before you use a credit card for hard cash, we recommend you do it only when there is an urgent need. If you’re okay with the high-interest rates and advance fee issue, then you avail the service.