Credit Card Tips: Know these things before withdrawing cash through a credit card..

Nowadays many people use credit cards, it is very useful. If there is not much money left in the savings account and you have to make some expensive purchases, then credit cards are very useful in such a situation. There are many other benefits like discount offers and reward points on this. Many times people also use credit cards to withdraw cash (Credit Card Cash Withdrawal).

If you are also thinking of doing this, then first understand whether it is right to do so or not because you will have to pay a hefty charge for withdrawing cash (Credit card charges).

Many types of charges are levied on credit cards (Credit Card charges)

Credit cards have many benefits but to use them you have to pay many types of charges. If you withdraw cash through a credit card, then it can cost you more because you have to pay more charges on withdrawing cash from it and this charge is 2.5 to 3 percent of the transaction amount. There is no benefit of interest interest-free credit period when withdrawing cash from a credit card. This means that the interest-free grace period that you get after shopping is not available in this. Interest is charged on it from the date of the transaction till its repayment.

If you use a credit card repeatedly to withdraw cash, then it can also affect your CIBIL score. Therefore, make cash transactions from a credit card only when there is an extreme need.

ATM Fees

As a credit card user, you are allowed 5 free ATM transactions every month depending on the location. After this, ATM maintenance or interchange fees are charged to you. Taxes are not included in both amounts.

Late payment fee (Credit Card Late payment fee)

If you do not pay the entire amount, a late payment fee is levied on the outstanding amount and it can range from 15% to 30%. Remember that late payment fees can affect your credit score.

Credit Card Cash withdrawal limit

Usually, you can withdraw a certain percentage of your credit limit as cash. Some banks allow you to withdraw up to 40% of the credit limit.

Credit Score

Sometimes withdrawing cash from a credit card may not affect your credit score, but the charges associated with cash withdrawal can be heavy on you. You should know that not paying the minimum due amount on time can also have a bad effect on your credit score.

Reward Points

Most banks give rewards to credit card holders. These rewards can be given in the form of discounts, gifts, or other deals. Banks create programs to encourage cardholders to use credit cards for dining, traveling, shopping, etc. You can earn reward points by making payments through credit cards, which can be redeemed for gift vouchers, cash gifts, air miles, etc.

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