Withdrawing cash from an ATM using a credit card incurs an immediate upfront cash advance fee of 2.5% to 3.5% (subject to a minimum of ₹250 to ₹500) plus interest rates ranging from 2% to 4.08% per month (24% to 49% p.a.).
Unlike regular card purchases, cash withdrawals have no interest-free grace period, accruing daily interest from the exact date of withdrawal until paid in full.
A cash withdrawal or cash advance using your credit card means you take out physical cash at an ATM using your credit card. It differs from a normal purchase because:
It often has a separate fee (called a cash advance fee).
There is no grace period. Interest begins from the withdrawal day.
It typically uses a cash withdrawal limit, which is a portion of your overall credit limit.
For example, if your credit limit is ₹1,00,000, the bank might allow only 20-40% of that (₹20,000 to ₹40,000) as a cash advance limit.
Across Indian banks, a common range for the cash advance fee is 2.5% to 3.5% of the withdrawn amount, subject to a minimum fee (often ₹250 to ₹500).
Here is what some banks charge:
|
Bank / Card |
Cash Advance Fee |
Interest Rates |
|---|---|---|
|
2.5% or ₹500 (whichever is higher) |
Up to 3.4% per month (Up to 40.8% p.a.) |
|
|
2.5% to 3% with a minimum of ₹250 to ₹500 |
3.75% per month (45% p.a.) |
|
|
2.5% to 3.5% subject to a minimum of ₹300 to ₹500 per transaction |
2% to 4.08% per month (24% to 49% p.a.) |
|
|
3%, subject to a minimum of ₹300 |
3.75% per month (45% p.a.) |
|
|
3.5%, subject to a minimum of ₹250 |
3.50% per month (42% p.a.) |
|
|
Depends on the card variant: could be NIL, ₹100 per instance, 1% of the withdrawal amount, or 2.5% on advance amount subject to a minimum of ₹500 |
3.50 % to 3.75% per month (42% to 45% p.a.) |
|
|
2.5%, subject to a minimum of ₹500 |
3.75% per month (45% p.a.) for unsecured cards; 2.75% per month (33% p.a.) for Shaurya, Defence Cards and Secured cards |
|
|
2.5%, subject to a minimum of ₹300 |
3.83% per month (46% p.a.) |
|
|
2.5% or ₹650 whichever is higher |
Depends on the card variant: could be either 2.49% per month (29.88% p.a.), 2.99% per month (35.88% p.a.), or 3.99% per month (47.88% p.a.) |
Note: These rates are indicative and may vary by card variant, location, or bank policy.
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Unlike purchases, a credit card cash withdrawal accrues interest right away (no interest-free period). Banks typically charge a monthly interest rate on the withdrawn amount until you fully pay it back.
The monthly rate may range between 2% to 4.08% per month (24% to 49% p.a.). Because the interest is often calculated daily and compounded, the longer you take to repay, the higher the cost.
Let’s put this into perspective with simple scenarios.
Cash advance fee: 2.5% of ₹10,000 = ₹250, but minimum fee might be ₹500 → you pay ₹500
Interest: Suppose the monthly rate is 3%. Daily rate = 3% ÷ 30 = 0.1%. For 10 days: 10,000 × 0.1% × 10 = ₹100
Total cost ≈ ₹600
Cash advance fee: 2.5% of ₹25,000 = ₹625 (above minimum)
Interest: Daily rate 0.1%, for 30 days = 25,000 × 0.1% × 30 = ₹750
Total cost ≈ ₹1,375
You can see how fees and interest quickly add up, nearly 5.5 % extra in this example.
Before you use your credit card for cash, be aware of these downsides:
You generally do not earn reward points on cash withdrawals.
The cost is high.
It increases your credit utilization, which may affect your credit score.
If you delay repayment, compounding quickly amplifies the cost.
Here are some alternatives you can opt for if you want to avoid a credit card cash advance -
Use a short-term personal loan.
Use overdraft or line-of-credit options if your bank offers them.
Borrow from a trusted friend/family member.
Rearrange payments or delay non-essential spending to avoid using a cash advance.
Here are some tips to minimise credit card cash withdrawal costs -
Withdraw only what’s absolutely needed.
Repay as soon as possible, even within days, to reduce interest.
Check your card’s schedule of charges/fee disclosure to know your exact rate.
Avoid using other-bank ATMs repeatedly, as interbank ATM fees may apply.
Avoid using a cash advance in non-emergencies.
Credit card cash withdrawals in India are expensive. With fees often ranging from 2.5% to 3.5% (subject to a minimum of ₹250 to ₹500) and interest accruing from the first day, the total cost can quickly balloon. Always treat this as a last-resort option. If you must use it, withdraw minimally, repay immediately, and know exactly what your bank’s rates are.
Did you know you can apply for credit cards through Moneyview? To know more, download the app or apply through the website.
If you wish to withdraw cash using a credit card at an ATM, it usually comes with a slew of charges. However, if you get your hands on a credit card that doesn’t charge a cash advance fee, then you might be able to withdraw cash using it without levying any extra charges.
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Disclaimer
The starting interest rate depends on factors such as credit history, financial obligations, specific lender's criteria and Terms and conditions. Moneyview is a digital lending platform; all loans are evaluated and disbursed by our lending partners, who are registered as Non-Banking Financial Companies or Banks with the Reserve Bank of India.
This article is for informational purposes only and does not constitute financial or legal advice. Always consult with your financial advisor for specific guidance.
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