Credit Cards come with various exciting benefits as well as facilities to provide their customers with all the convenience to make purchases and to give them more financial freedom. Along with all the privileges that you get across different categories, credit cards also provide you with the option to make different types of transactions like cash withdrawals, foreign currency purchases, and many more. A cash withdrawal facility is provided by every credit card, however, the applicable charges and terms & conditions may vary. Credit card users generally have lots of questions related to credit withdrawals. To help you out with these doubts, we are here with this article, where we will talk everything about credit cards’ cash advance facility and how you can avoid the applicable charges:
Charges Applicable To Credit Card Cash Withdrawals
Credit cards do provide you with the facility to withdraw cash, but there are some charges applicable to such transactions. It is because credit cards are not supposed to be used to withdraw cash, but these are just for the convenience of individuals to make online/offline purchases directly using a credit card. However, emergency situations don’t occur after informing you and you never know when you can run out of cash. In such situations, the cash advance faculty provided by credit cards comes handy. But, this facility is not absolutely free. There are various charges applicable to cash withdrawal transactions using credit cards as mentioned below:
- Cash Advance Fees: The cash advance fee is generally 2.5% to 3% of the amount that you withdraw using a credit card (subject to a specific minimum amount). This is fee is chargeable every time you withdraw cash using a credit card. However, this fee can be different for different credit cards and some credit cards even have a zero cash advance fee.
- Interest Charges: Like every other purchase, interest is also applicable to cash withdrawal transactions made using a credit card. The only difference is that there is no interest-free period applicable to cash advances. For other purchases, you get an interest-free period of up to 50 days, but in case of cash withdrawals, the interest starts accruing from the very next day of the transaction.
Can You Withdraw Cash using Credit Cards Without Charges?
Generally, it is not possible to avoid the cash advance fee when you withdraw cash using a credit card. However, you can use some indirect methods to withdraw cash using your credit card with low/no charges. The following are some of the best ways to do it:
Get a Credit Card with No Cash Advance Fees
A few credit cards in the Indian market come with zero cash advance fees. These cards are generally premium credit cards that come with a high annual fee and great benefits. So, not everyone can get approved for these cards as these have some strict eligibility criteria. For example, the Axis Bank Reserve Credit Card has no cash advance fee. If you have any such credit card, you can withdraw cash without worrying about the applicable charges. However, you should still keep the interest rate in mind.
Pay Your Credit Card Bills Soon To Avoid Interest
As mentioned earlier, interest starts accruing on cash advance transactions from the very next day of the transaction, unlike other purchases for which you get an interest-free period. So, even if you can’t avoid the cash advance fee, you can avoid the interest charges by making your credit card bill payment as soon as possible.
Try Alternate Methods Rather Than Direct Cash Withdrawals
If you want to withdraw cash using your credit card due to some urgency, but you want to avoid the charges as much as possible, you can use some indirect/alternate methods. You can make some purchases for your friends or relatives and ask them to repay the equivalent amount to you in the form of cash. You can also load your wallets like Paytm wallet using your credit card and then transfer this amount to your bank account. However, wallet reloads using credit cards are also not free, but the charges are generally lower than the cash advance fees.
You might have understood that it is generally not possible to withdraw cash using credit cards without any charges, but there are several ways to reduce this additional cost. However, withdrawing cash using credit cards is not at all a good idea until it’s a real emergency. The cash advance facility is provided by the card issuers just for your convenience, but you should try to avoid this as much as possible.