The Government of India has dedicatedly promoted the digital modes of transactions in the country in the last few years. Nevertheless, according to an RBI report dated March 2019, cash transactions increased by 17%, equivalent to more than Rs.21 lakh crore. Apart from debit cards, credit cards are another significant source of cash for a growing number of individuals.
Nevertheless, unlike debit cards, individuals are often reluctant to withdraw cash from their credit cards due to the charges levied on such withdrawals. New credit card holders often wonder how to withdraw cash from credit cards without fees.
What are credit card cash withdrawal charges?
Before learning how to withdraw cash from credit card without fees, one must understand what these charges are.
Also known as a credit card cash advance fee, an individual is liable to pay such charges when he/she uses the credit card to withdraw cash from ATMs. Some financial institutions do not levy such charges when you swipe the card to conduct a cashless transaction.
Furthermore, a credit card user must understand that interest on the cash advance starts from the date of withdrawal until the sum is fully repaid. Thus, they must clear the debt as soon as possible, instead of waiting for their billing cycle to complete and the arrival of the bill due date.
Keep in mind that the cash advance limit on a credit card is never the same as the credit limit. For instance, if the credit limit for a card is Rs.1 lakh, its cash advance limit may be a maximum of up to Rs.40,000. It is determined as a percentage of the total credit limit.
How to withdraw cash from a credit card without fees?
In most cases, cardholders are bound to pay a fee whenever they withdraw cash using credit cards. Still, some specific cards, such as the Bajaj Finserv RBL Bank SuperCard, allow consumers to withdraw cash and benefit from an interest-free period of up to 50 days.
Such period offers some flexibility to users, who can arrange the necessary funds in this time, ensuring hassle-free repayments.
While making repayment within the due date does not attract any charges, opting for such cards also ensures that the rate of interest remains affordable if it is charged on non-payment of such dues. Moreover, a basic pointer to use a credit card wisely is determining whether you can repay the amount, along with interest without overburdening your finances.
Advantages of withdrawing cash using credit cards
While credit card cash advance fees can be a deterrent to cash withdrawal using credit cards, such withdrawals also come with significant advantages. Listed below are some of them.
- Instant access to funds as a credit
Cash advance from a credit card can be considered as a form of a loan available on urgency. Nonetheless, unlike other forms of credit, a consumer does not need to wait for the money to be credited into their account. With credit card cash withdrawal, individuals can access their borrowed money instantly.
- No documentation necessary
Unlike other loans where you need to provide a significant number of documents, besides filling up an application form, credit card cash withdrawal does not require you to undertake either one of these. With no documentation requirement, chances of errors or loan rejections are also minimal. If one possesses a cash advance balance on his/her credit card, withdrawing cash is simple and convenient.
- Flexibility in limits
If a credit card user maintains an impressive track record for credit card usage, which means they repay their credit card debt in time and keep credit utilisation low, they can take advantage of increased cash advance limits as well.
Keep in mind that a lot depends on the credit card issuer you choose. Reputed brands also offer cards with a range of benefits.
Utilise cash advance features on credit cards without any apprehensions, now that you know how to withdraw cash from credit card without fees. It is, however, ideal to limit withdrawals as per your repayment capability.