Steps to withdraw money from Credit Card?
17 January, 2024
A Credit Card is a convenient payment tool that lets you make purchases for which you can pay later. Your card issuer will set a credit limit, which you can utilise to shop, pay bills and more. Another good-to-know feature of Credit Card is cash withdrawal. Like how you would use a Debit Card to withdraw cash from an ATM, you can also use a Credit Card to withdraw cash. There are, however, certain conditions associated with such withdrawals. In this article, you can get information on how to get cash from your Credit Card.
How to withdraw cash from Credit Card?
Here’s a step-by-step process on how to withdraw money from a Credit Card:
You need to locate an ATM since you can withdraw cash from only an ATM.
In the ATM card slot, insert your Credit Card.
Choose ‘cash advance’, ‘cash withdrawal’ or similar options.
Enter the withdrawal amount.
Confirm the transaction by entering the PIN. With some cards, you may also receive a one-time password (OTP) on the registered mobile number, which you need to enter to validate the transaction.
Once the transaction is validated, the machine will dispense the cash.
Collect the cash and the Credit Card.
Once the transaction is complete, you will receive a notification from your card issuer regarding the used credit limit and the available credit limit.
Should you withdraw cash using your Credit Card?
The ability to withdraw cash using your Credit Card can come in handy during emergency situations. That said, there are no restrictions on why and when you should utilise this feature. You should, however, consider several factors associated with Credit Card cash withdrawals:
What is the cost of withdrawing cash with your Credit Card?
You ought to know the following costs you will incur once you withdraw cash with your Credit Card:
Interest rate
Typically, when you don’t pay your Credit Card bill on time, interest is applicable on the outstanding balance. With cash withdrawals too, interest will be applicable to the withdrawn amount. Interest will be applied from the date of withdrawal till the withdrawal amount is repaid in full.Cash advance fee
These are charges that you incur when you withdraw money from the ATM using your Credit Card. The cash advance fee is typically a percentage of the withdrawal amount, usually subject to a maximum amount. If you are an HDFC Bank Credit Cardholder, you will incur a transaction fee of 2.5% or ₹500, whichever is higher. This percentage does not apply to all cards.
When you carry forward the cash advance, finance charge is calculated by the average daily balance method. The charge will apply to not only the balances that are carried forward but also to new transactions.
Typically, your card issuer shall notify you of the charges via the welcome kit.
Do cash advances impact credit score?
As long as you repay your debt on time, your credit score will not be impacted. However, when you take a cash advance, it will be billed to you in the upcoming billing cycle. Along with the withdrawal amount, you also need to pay interest and applicable finance charges. This, along with Credit Card transactions made during the billing cycle, may result in a substantial bill amount. Higher bill amounts may result in late payment or defaulting. If you default on your Credit Card bill payments, the information is passed on to credit information companies that determine your credit score. Therefore, irregularities in debt repayments can result in lower credit scores.
Bottom line
Now that you know how to withdraw money from a Credit Card, ensure you do so when you absolutely have no other means to deal with an expense. Unlike regular Credit Card transactions that incur interest upon not paying bills on time, Credit Card cash advances incur interest starting from the day of transaction. To alleviate the stress of bill payment, ensure you withdraw lesser amount and repay the amount at the earliest.
Enjoy exclusive perks with HDFC Bank Credit Cards
At HDFC Bank, we offer an array of Credit Cards, and you can find a suitable card for you. You can earn reward points, cashback and other offers with your Credit Card spends. You can conveniently pay your Credit Card bills through our platforms such as NetBanking, MobileBanking, PayZapp and MyCards. Alternatively, you can also pay your bill via ATMs and cheque and cash deposits. This way, you have access to numerous platforms to repay your cash advance debt and pay Credit Card bills on time.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.
