The credit card cash withdrawal limit is the maximum amount you can withdraw using your card at an ATM. It is a viable option when you need cash on the spot but it comes at a cost. Firstly, you are charged a fee to get these funds. Secondly, you can’t access your full limit in cash.
Thankfully, with certain smart hacks, you can use your card’s cash limit while ensuring your financial well-being doesn’t get affected.
What is a Credit Card Cash Limit?
While banks generally offer credit cards to fund purchases, you can also use them to withdraw cash from an ATM. This facility, called ‘cash advance,’ allows cash withdrawals similar to the feature on a debit card.
However, before opting for this feature, here are a few things you need to know:
- You can only withdraw money within the permissible limits called the cash limit
- While this limit varies depending on your chosen card, it generally ranges between 20% and 40% of the credit limit
- However, it is crucial to note that not all credit card companies offer cash advance facility
- Those companies that offer this facility also levy higher interest rates and credit card cash withdrawal charges on such transactions
- If you fail to repay the owed amount on time, you will also have to pay a late payment fee
Difference Between Cash Limit and Credit Limit
There are two very unique features and knowing the difference between a credit card cash withdrawal limit and credit card limit is crucial.
| Basis | Credit Card Limit | Cash Limit on Credit Card |
| Meaning | It is the maximum amount that you can spend using your card during a billing cycle | It is the maximum amount that you can withdraw using your credit card from an ATM |
| Calculation | Financial institutions generally calculate this limit based on various financial factors | It generally ranges between 20% and 30% of your total credit limit |
| Applicable Charges | No interest charges will apply if you pay the full bill before the due date of repayment | You will have to pay a cash advance fee, ranging between 2.5% and 3% on the transaction amount Moreover, the interest rates will start accruing on such transactions from the date when you carried them out |
How to Withdraw Cash Using Credit Card
To get cash from an ATM using your credit card, follow the same process that you do for debit cards. Here are the steps you need to follow:
- Visit a nearby ATM, preferably one of the issuing bank, and swipe or insert your credit card
- Select the ‘Cash Advance’ facility and enter the preferred amount you wish to withdraw
- Enter your card’s PIN and tap on the ‘Confirm’ button to receive cash instantly
Pros of Withdrawing Cash from Credit Card
Before you rush to an ATM to get money, it is crucial to know the benefits of this facility, which include the following:
- Instant Cash: With this facility, you can access funds quickly from ATMs available 24X7 across the country.
- Predetermined Limit: Unlike traditional credit options, you don’t have to provide documentation or get approval from the bank to access cash.
- Higher Withdrawal Limits: If you keep a strong track record of paying credit responsibly, the bank may even consider increasing your credit card cash withdrawal limit.
Cons of Cash Withdrawal from Credit Card
While cash advance offers quick access to money, there are also certain drawbacks to using this facility. These include:
- Added Fee: Most credit card issuers charge a cash advance fee when you withdraw cash from an ATM using your card.
- High Interest Rates: You will also have to pay finance charges on the withdrawn amount, which has a compounding effect from the date of the transaction.
- No Rewards: Regardless of the size of the transaction, most credit cards don’t allow you to earn any rewards on cash withdrawal repayment.
- No Interest-Free Period: Since not many financial institutions offer interest-free grace periods for cash advances, the interest charges continue to pile up.
Credit card cash advances aren’t always economical but can help in a pinch. If you do opt to go this route, prioritise repaying it to minimise the financial burden. If you want a card that allows instant and direct cash transfers to your bank account, get the One Credit Card. Apart from an admirable cash limit, you can get 5X rewards on your top 2 spending categories and enjoy exclusive shopping offers on this card.
Using its powerful application, you can control every aspect of your premium metal card’s cash limit and other expenses. Apply now to get your hands on instant cash with your credit card!
