Everything You Need to Know About Credit Card Cash Withdrawal

Credit cards have become reliable tools for availing of loans in times of need. It is not always easy to get personal loans approved. It is even more difficult to wait for the application process to be reviewed while investment or payment deadlines close in on you.

Cards like the Bajaj Finserv RBL Bank SuperCard not only have fast application and approval times, but the issuers also empathize with customers. For this very reason, they have made provisions of all modes of payment.

The credit card cash withdrawal facility, for instance, lets you borrow cash within your credit limit from ATMs. It is akin to using your debit card to withdraw money.

Nevertheless, you should be careful with the terms and conditions laid down by the issuer. You should be especially careful with the credit card interest rates so that you do not regret taking a loan. Let us now look at the advantages and disadvantages associated with credit card cash withdrawal.

Advantages of Cash Withdrawal Using Credit Cards

·        You do not need any documents to withdraw cash from ATMs. When you think about it, this is a major advantage because, in all other loan processes, paperwork is mandatory.

·         Related to the above point, the withdrawal process is quick. Since no paperwork is required, you do not have to depend on anyone for the withdrawal.

·        Since you will be withdrawing the money from an ATM, you can make the transaction on your own time.

·      Furthermore, the withdrawal limit is typically not fixed. Nurturing your credit card is a must by ensuring timely payments, increasing the collateral, etc. With time, your salary will also increase, thus adding up to the chances of an enhanced credit score.

A healthy credit score will definitely upgrade your credit limit. On average, the cash withdrawal limit is 20-40% of the total credit limit. So, the key to accessing more cash is to increase your credit limit by adopting various methods.

Disadvantages of Credit Card Cash Withdrawal

The most obvious disadvantage of cash withdrawal using credit cards is the high rate of interest. These interests are imposed on a daily basis. If you do not repay in full within a short period, you might have to pay a substantial amount of money.

Some issuers do not charge interest for a reasonable period, but instead, they charge a processing fee. It could be a good idea to opt for the processing fee because it is usually cheaper than paying daily interest.

In any case, you should only go for cash withdrawal if you are 100% sure about repaying the money in a few days’ time. If you do not have it planned, refrain from using this facility because the chances of falling into a debt trap are high.

The processing fee levied on your withdrawal amount is for a single transaction. It will be levied as many times as you make attempts to withdraw cash. Therefore, it is a good idea to calculate the amount of money you need and withdraw all of it at once.

Another drawback is that you are not eligible for rewards or cashback offers on these transactions. The issuers do not count cash withdrawals as valid investments.

The logic is understandable, because you may very well lend it to a friend without investing it. The bank cannot quantify its profits from such transactions, and thus you do not get a share of the pie.

Does Cash Withdrawal Affect Credit Score?

Cash withdrawal does not affect your credit score simply because the issuer does not report it explicitly to credit bureaus. However, if you fail to repay the amount on time, your credit score will definitely take a hit.

Therefore, the bottom line is to invest in good credit cards like Bajaj Finserv RBL Bank SuperCard to reap the benefits. This credit card imposes a minimal processing fee, and allows an interest-free withdrawal period of 50 days! Apply now to have access to further privileges.