Some credit cards also offer reward points and cashback on purchasing fuel. Due to all these facilities, the trend of using credit cards is increasing day by day.

But do you know that among all these features available on credit cards, there is one feature on which banks charge you a hefty fee. If you use this feature unknowingly, you may have to regret it later.

Cash Advance Feature

With the help of the cash advance feature of the credit card, you can go to the ATM and withdraw cash from your credit card just like a debit card. How much cash you can withdraw from the credit card depends on the limit of your card. Most banks allow you to withdraw 20 to 40 percent of the credit card limit as cash. But is it beneficial to withdraw cash from the credit card using this feature?

How correct is it to withdraw cash from a credit card?

o the answer to this question is absolutely no. Because there are more disadvantages than advantages of withdrawing cash from a credit card. Its only advantage is that your cash requirement is met in times of emergency. Apart from this, there is no other advantage of this facility. The biggest reason for this is that on withdrawing cash from a credit card, you neither get the benefit of interest free credit period nor reward points.

To put it simply, the interest-free grace period that you get after shopping is not available in this. Not only this, a hefty interest is also charged on the cash withdrawn.

Fees and interest rates

Every time you withdraw cash using a credit card, a fee is charged. Usually, it ranges from 2.5% to 3% of the transaction amount. Cash withdrawals also attract a transaction fee. This fee is charged from the date of transaction until the payment is made. Interest on the credit card starts accruing from the day of cash withdrawal. It can range from 2.5% to 3.5% on a monthly basis.

ATM Charges

Nowadays banks offer only a few ATM transactions for free. Fees are charged for more transactions. So if you use your credit card more often to withdraw cash, you may have to pay this fee as well.

Late Payment Fees

If you do not pay the full amount of cash withdrawn from the credit card, then a late payment charge is levied on the outstanding balance. Its rate can be from 15 to 30 percent.

Impact on CIBIL score

If you withdraw cash from your credit card frequently, it can also affect your CIBIL score. Therefore, before deciding to withdraw cash from your credit card, consider all these things.

The post Credit Card Cash Withdrawal – Know its advantages and disadvantages first appeared on Rightsofemployees.com.

People are shopping a lot in the festive season (Credit Card Offer). The most special feature of the credit card is the facility of cash advance. However, nowadays due to Online Shopping Credit Card Offer, people do not need to withdraw much cash.

But still many people are using their credit cards to withdraw cash from ATMs. This is because people are spending more in the circle of offers. In such a situation, is it the right step for people to withdraw money from their credit cards? According to experts, doing this is right or wrong. Can this cause you a big loss in future?

Avoid Cash Withdrawals

According to experts, withdrawing money from credit cards at ATMs should be avoided. This is because the bank levies a lot of interest and charges on cash withdrawal. Apart from this, if the credit card holder does not pay the minimum amount, then his CIBIL score is also affected. Withdrawal from credit card attracts a cash withdrawal charge of 2.5 per cent to 3 per cent. Apart from this, the charge for the number of days you do not deposit money also gets added on a daily basis.

Four percent interest is charged!

Apart from this, you have to pay four percent interest every month. Accordingly, in addition to interest, you also pay many types of charges. Apart from this, you will not get any kind of reward points on payment by withdrawing cash from the card. Apart from the interest, the bank also charges cash withdrawal fee from you.

For example, if you have a Flipkart credit card of Axis Bank, if you withdraw cash from it, then the bank will charge you Rs 500 or 2.5 percent in the name of withdrawal fee. Apart from this, more than 50 percent interest will be charged on an annual basis. In such a situation, you may have to pay a charge of thousands of rupees.

CIBIL score gets worse

If you have done cash withdrawal from credit card then it completely spoils your CIBIL score. Due to this the banks think that your financial condition is very bad and because of this you should never use your credit card to withdraw money from ATM.

The post Credit Card Cash withdrawal charges, know full details first appeared on Rightsofemployees.com.