Steps to withdraw money from Credit Card?

A Credit Card is a convenient payment tool that lets you make purchases for which you can pay later. Your card issuer will set a credit limit, which you can utilise to shop, pay bills and more. Another good-to-know feature of Credit Cards is cash withdrawal. Like how you would use a Debit Card to withdraw cash from an ATM, you can also use a Credit Card to withdraw cash. There are, however, certain conditions associated with such withdrawals. In this article, you can get information on how to get cash from your Credit Card.

Here’s a step-by-step process on how to withdraw money from a Credit Card:

• Step 1: You must locate an ATM since you can withdraw cash from only an ATM.
• Step 2: In the ATM card slot, insert your Credit Card.
• Step 3: Choose ‘cash advance’, ‘cash withdrawal’ or similar options.
• Step 4: Enter the withdrawal amount.
• Step 5: Confirm the transaction by entering the PIN. With some cards, you may also receive a one-time password (OTP) on the registered mobile number, which you must enter to validate the transaction.
• Step 6: The machine will dispense the cash once the transaction is validated.
• Step 7: Collect the cash and the Credit Card.
   

Once the transaction is complete, you will receive a notification from your card issuer regarding the used and available credit limits.

The ability to withdraw cash using your Credit Card can be useful during emergencies. That said, there are no restrictions on why and when you should utilise this feature. You should, however, consider several factors associated with Credit Card cash withdrawals:

What is the cost of withdrawing cash with your Credit Card? 

You ought to know the following costs you will incur once you withdraw cash with your Credit Card:

Interest rate 

If you don’t pay your credit card bill on time, interest charges will apply to the outstanding balance. This also holds for cash withdrawals, where interest starts accruing from the withdrawal date until the amount is fully repaid.

Cash advance fee 

You incur these charges when you withdraw money using your Credit Card from the ATM. The cash advance fee is typically a percentage of the withdrawal amount, usually subject to a maximum amount. If you are an HDFC Bank Credit Cardholder, you will incur a transaction fee of 2.5% or ₹500, whichever is higher. This percentage does not apply to all cards.

When you carry forward the cash advance, the average daily balance method calculates the finance charge. The charge will apply to not only the balances that are carried forward but also to new transactions.

Typically, your card issuer shall notify you of the charges via the welcome kit.

If you repay your debt on time, your credit score will not be impacted. However, when you take a cash advance, it will be billed to you in the upcoming billing cycle. You also need to pay interest and applicable finance charges along with the withdrawal amount. This, along with Credit Card transactions made during the billing cycle, may result in a substantial bill amount. Higher bill amounts may result in a late payment or default. If you default on your Credit Card bill payments, the information is passed on to credit information companies that determine your credit score. Therefore, irregularities in debt repayments can result in lower credit scores.

At HDFC Bank, we offer an array of Credit Cards, and you can find a suitable card. You can earn reward points, cashback and other offers with your Credit Card spends. You can conveniently pay your Credit Card bills through our platforms, such as NetBanking, MobileBanking, PayZapp and MyCards.

Alternatively, you can pay your bill via ATMs and, cheque and cash deposits. This way, you can access numerous platforms to repay your cash advance debt and pay Credit Card bills on time.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals are subject to documentation and verification per the bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.