Credit Card: Don't do this work with a credit card even by mistake! The profit will be less and the loss will be more...

All the offers, discounts, and reward points available on credit cards and the grace period on loans, all these features have increased their popularity very rapidly. If you do not have money in your pocket, you can fulfill your needs by taking a short-term loan from your credit card and returning it without interest in the grace period. The list of facilities available on credit cards does not end here; apart from this, there are many other things which people take full advantage of. But there is one such facility, which most experts also advise to avoid, and that is a cash advance.

Meaning if you do not have a debit card, or have forgotten it somewhere, and you need cash, then you can also withdraw cash from your credit card. This is called Cash Advance. However, instead of taking advantage of this facility, it is better that you arrange money in some other way because your benefit in withdrawing money from an ATM is less, and the loss is greater. Know about this here.

First, know the benefits.

If we look at the benefits of withdrawing cash from a credit card, the biggest advantage seems to be that if you are in an emergency situation, you need cash and there is no money in your account, then you can arrange cash through a credit card. You do not need to borrow from anyone.

All credit card users get the facility of withdrawing cash from a credit card. How much cash you can withdraw is decided according to the limit of your card. Most banks allow withdrawal of 20 to 40 percent of the total credit card limit in cash. If your card limit is 5 lakhs, then you can withdraw cash from 1 lakh to 2 lakh rupees.

Also, know the disadvantages of withdrawing cash.

Cash advance charge

According to the official website of HDFC Bank, every time you withdraw cash using a credit card, you are charged a cash transaction charge. Usually, this is 2.5% to 3% of the transaction amount. Understand with an example- Suppose if you withdraw cash of 1 lakh, then you may have to pay a charge of 2.5 to 3 thousand for this.

Financial charge
Financial charge is levied on regular credit card transactions, and similarly, there is a charge on cash withdrawal as well. This charge is levied from the date of transaction till the payment is made.

Grace period benefit is not available.
There is no benefit of interest-free credit period on cash advance; that is, the interest-free grace period that you get after shopping is not available in this. In such a situation, you also have to pay interest every month on the withdrawn amount.
Late payment charge

Late payment charge
If you do not pay the full amount, then a late payment charge is levied on the outstanding balance, and it can be from 15% to 30%.

Possibility of impact on CIBIL score
If you withdraw cash from a credit card, then your CIBIL score is not directly affected by it. But the high charges associated with cash withdrawal increase the monthly payment. In such a situation, if you fail to make the payment on time, it may hurt your CIBIL score.

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