Most banks levy 2.5% to 3% as credit card cash withdrawal charges, without an interest-free period.
It can be tempting to withdraw cash on a credit card when you are short on funds. But how much do you end up paying back? Credit card cash withdrawal or cash advance can be an expensive option, considering the multiple fees and interest.
This article will explore typical charges, bank-wise comparisons, walk-through examples, and tips to minimize cost.
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Across Indian banks, a common range for the cash advance fee is 2.5% to 3% of the withdrawn amount, subject to a minimum fee (often ₹250 to ₹500). For example, HDFC Bank charges 2.5% of the amount or ₹500, whichever is higher.
Here is what some banks charge:
|
Bank / Card |
Cash Advance Fee |
|---|---|
|
HDFC Bank |
2.5% or ₹500 (whichever is higher) |
|
ICICI Bank |
2.5% with a minimum of ₹300 |
|
Axis Bank |
2.5% subject to a minimum of ₹500 |
|
Standard Chartered |
3% (minimum ₹300) |
|
American Express (India) |
3.5% (minimum ₹250) |
|
Kotak Mahindra Bank |
2.5% with a minimum of ₹500 |
|
SBI |
2.5% with a minimum of ₹500 |
|
IndusInd |
2.5% to 3% with a minimum of ₹250 to ₹500 |
|
Yes Bank |
2.5% with a minimum of ₹500 |
Note: These rates are indicative and may vary by card variant, location, or bank policy.
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 Banks typically charge a monthly interest rate on the withdrawn amount until you fully pay it back.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 2.5% to 3.5% (or more, depending on the card). Because the interest is often calculated daily and compounded, the longer you take to repay, the higher the cost.
Want a Credit Card with High Limits & Rewards?
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.
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% 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.
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.
Another option is to use e-wallets like Mobikwik to transfer cash from your credit card to your wallet or your account and then withdraw it using your debit card at an ATM. This process will allow you to withdraw cash without any charges.
Credit Card Insights
CIBIL Score Check and Boost Guide
Credit Score Basics and Full Forms
Banking & Investment Tips
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.
Was this information useful?
