If you’ve ever found yourself in a financial pinch, your credit card can be a potential lifeline. While they’re primarily designed for purchases, they can also be used to access cash. However, this convenience comes at a steep price.
Understanding cash advance fees and interest rates
Understanding cash advance fees and interest rates is crucial when considering withdrawing money from your credit card. Most credit card issuers impose a cash advance fee, typically ranging from 2% to 5% of the withdrawn amount. This fee is applied immediately, regardless of when you pay back the borrowed sum.
Moreover, cash advances usually start accruing interest from the day of withdrawal, unlike regular purchases that often come with a grace period. These interest rates are generally higher than those for standard transactions, sometimes reaching up to 24% or more annually. This combination of upfront fees and high interest rates can quickly turn a seemingly simple cash withdrawal into a costly affair.
Strategies to avoid charges when withdrawing money
To avoid charges when withdrawing money from your credit card, several strategies can be employed. One approach is to look for promotional offers from your credit card issuer. Some companies occasionally provide cash advance deals with reduced or waived fees for a limited time. Keep an eye out for these promotions and take advantage of them when available.
Another tactic is to use your credit card for a purchase at a store that offers cashback. While technically not a withdrawal, this method allows you to receive cash while making a purchase, potentially avoiding cash advance fees. However, be cautious as some credit card issuers may still categorise large cashback amounts as cash advances.
Tips for managing cash advances from credit cards
When it comes to managing cash advances from credit cards, consider these tips:
- Plan ahead: Only withdraw what you absolutely need and can repay quickly to minimise interest charges. This approach helps you avoid accumulating high-interest debt that can be challenging to clear.
- Use it as a last resort: Explore other options like personal loans or borrowing from family before turning to credit card cash advances. These alternatives often come with lower interest rates and fewer fees, making them more economical in the long run.
- Pay it back promptly: Prioritise repaying cash advances as soon as possible to reduce the impact of high interest rates. The faster you clear this debt, the less you'll pay in interest, saving you money in the long term.
- Monitor your credit utilisation: Cash advances count towards your credit limit and can affect your credit score. Keeping your credit utilisation low is crucial for maintaining a healthy credit profile, so be mindful of how cash advances impact this ratio.
While these strategies can help mitigate the costs associated with credit card cash withdrawals, wouldn't it be better to have a card that offers more favourable options? Consider the Bajaj Finserv RBL Bank Credit Card, an excellent option that ensures you always have access to funds when you need them the most.
Bajaj Finserv RBL Bank Credit Card benefits
- Interest-free ATM cash withdrawal for up to 50 days: This unique feature allows you withdraw money from credit card without charges for up to 50 days.Being able to access cash without immediate interest charges gives you flexibility in managing your finances.
- Redeemable reward points on nearly every transaction: Earn points even on cash withdrawals, offsetting some of the costs associated with accessing cash.
- Fuel surcharge waivers of up to Rs. 1,200 per year: Save money on fuel purchases, freeing up cash for other needs.
- Easy EMI conversion for purchases above Rs. 2,500: This feature can help manage large expenses without resorting to cash advances.
- Annual fee waiver when you cross the minimum spending threshold: Potentially eliminate the annual fee, making the card more cost-effective.
- Accelerated reward points on online transactions and international spends: Earn more points on specific types of transactions, increasing the overall value of your card usage.
Other features and benefits include:
- Free access to airport lounges
- Discounts and cashback offers on select spending categories
- Dedicated concierge services
- Welcome bonuses of up to 4,000 points
- Discounts and ‘1+1’ offers on movie tickets when you book via BookMyShow
The Bajaj Finserv RBL Bank Credit Card offers a compelling solution for those seeking to withdraw money from a credit card without charges. Its interest-free cash withdrawal period provides a valuable window to access funds without immediate financial penalties. This feature, combined with the card's robust rewards program and additional benefits, makes it an attractive option for consumers looking to optimise their credit card usage. So, why wait? Apply now!
