Credit Card Cash Withdrawal: If you use a credit card to withdraw cash repeatedly, it can also affect your CIBIL score. Therefore, make cash transactions with a credit card only when there is a great need.
Nowadays many people use credit cards, it is very useful. If there is not much money left in the savings account and you have to make some expensive purchases, then a credit card is very useful in such a situation. It also offers many other benefits like discount offers, reward points. Many times people also use credit cards to withdraw cash (Credit Card Cash Withdrawal).
If you are also thinking of doing this, then first understand whether it is right to do so or not because you will have to pay a hefty charge on withdrawing cash (Credit card charges).
Many types of charges are levied on credit cards (Credit Card Charges and Fees)
Credit cards have many benefits but to use it you have to pay many types of charges. If you withdraw cash through a credit card, it can cost you more because you have to pay a higher charge for withdrawing cash and this charge is 2.5 to 3 percent of the transaction amount. There is no benefit of interest free credit period on withdrawing cash from a credit card. This means that the interest free grace period that you get after shopping is not available in this. Interest is charged on it from the date of transaction till its repayment.
If you use a credit card to withdraw cash repeatedly, it can also affect your CIBIL score. Therefore, make cash transactions from a credit card only when there is an extreme need.
ATM Fees
As a credit card user, you are allowed 5 free ATM transactions every month depending on the location. After this, ATM maintenance or interchange fees are charged from you. Taxes are not included in both amounts.
Late payment fee (Credit Card Late payment fee)
If you do not pay the entire amount, a late payment fee is levied on the outstanding amount and it can range from 15% to 30%. Remember that late payment fee can affect your credit score.
Credit Card Cash withdrawal limit
Usually, you can withdraw a certain percentage of your credit limit as cash. Some banks allow you to withdraw up to 40% of the credit limit.
Credit Score
Sometimes withdrawing cash from a credit card may not affect your credit score, but the charges associated with cash withdrawal can be heavy on you. You should know that not paying the minimum due amount on time can also have a bad effect on your credit score.
Reward Points
Most banks offer rewards to credit card holders. These rewards can be given in the form of discounts, gifts or other deals. Banks create programs to encourage card holders to use credit cards for dining, traveling, shopping, etc. You can earn reward points by making credit card payments, which can be redeemed for gift vouchers, cash gifts, air miles, etc.
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