Credit Card Guide for Cash Withdrawal | Cash withdrawals using credit cards

Cash withdrawals using credit cards can be a convenient solution when you find yourself in a financial pinch. However, it’s essential to understand the terms, fees, and interest rates associated with cash withdrawals from your credit card. In this article, we will delve into the ins and outs of cash withdrawals, the associated charges, and which banks offer the best options for such transactions.

Understanding Cash Withdrawals: Just like debit cards, credit cards can be used to withdraw cash from ATMs. However, you cannot withdraw the entire credit limit available on your card. Credit card statements specify a separate cash limit, typically ranging from 20% to 40% of your credit limit. It’s important to note that using your credit card for cash withdrawals is not the best practice.

Fees and Interest Charges: Cash withdrawals come with their own set of charges. When you withdraw cash from an ATM using your credit card, you will incur a cash withdrawal fee and, more significantly, interest charges. The interest begins accruing from the moment you make the withdrawal, regardless of whether you pay your credit card bill in full by the due date.

The cash withdrawal fee and interest rates vary from bank to bank and card to card. Let’s take a closer look at some of the leading banks and their policies:

State Bank of India (SBI): SBI’s interest rate on cash withdrawals is typically 3.5% per month, with a cash withdrawal fee of 2.5% of the withdrawn amount.
Kotak Mahindra Bank: Kotak offers different cards with varying interest rates on cash withdrawals, ranging from Rs 2.49 to Rs 7 per month. The cash withdrawal fee is 2.5%, with a minimum charge of Rs 500.
Axis Bank: Interest rates on cash withdrawals from Axis Bank cards range from 1.99% to 3.6% per month, with a cash withdrawal fee of Rs 2.5.
HDFC Bank: HDFC Bank’s cards have an interest rate of 2.49% per month for cash withdrawals and a cash withdrawal fee of 2.5%, with a minimum charge.
RBL Bank: RBL cards have an interest rate between 3.3% to 3.99% per month for cash withdrawals, with a 2.5% cash withdrawal fee.
HSBC: HSBC’s Premier MasterCard has a monthly interest rate of 2.49% and a cash withdrawal fee of 2.5%.
IndusInd Bank: Interest rates on IndusInd Bank cards range from 1.79% to 3.95% per month, with a 2.5% cash withdrawal fee.
YES Bank: YES Bank’s cards have a 2.49% interest rate for cash withdrawals and a cash withdrawal fee of 2.5%.
Standard Chartered Bank: Standard Chartered Bank’s cards come with a 3.49% monthly interest rate and a cash withdrawal fee of 3%.
Punjab National Bank (PNB): PNB cards have a monthly interest rate of 2.95% and a 2% cash withdrawal fee.

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Best Option for Cash Withdrawals: If you are considering cash withdrawals from your credit card, IDFC Bank stands out as a favorable choice. All IDFC Bank cards offer the advantage of no interest charges on cash withdrawals until the payment due date. The cash withdrawal fee remains a minimal Rs 1 plus taxes, making it an attractive option for those in need of cash.

Conclusion: Cash withdrawals from credit cards should be a last resort due to the associated fees and high-interest rates. It’s crucial to understand your card’s terms and conditions and explore options that minimize these charges. While some banks offer more favorable terms for cash withdrawals than others, remember to use this option sparingly and only in emergencies to avoid unnecessary financial burdens.