While the payment system is fast getting digitised, cash usage still tops the list with a growth of 10.5% post-demonetisation.
As per a chief economist from one of the leading financial institutions in India, the trend continued to gain pace in the first few weeks of 2019. The facility of cash withdrawal from credit cards with a high credit card cash withdrawal limit only spurred this growth.
Cash usage stats in India –
- 10% growth in cash usage between October 2016 and October 2018 as per a study by CMS Info Systems.
- Cash requirement goes up by 80-85% at ATMs located in semi-urban regions.
- Cash usage in India expected to reach 46.2% by 2021.
- Rs. 1.4 trillion recorded as cash withdrawal with the quarter ending March 2018.
Confirming to this, ATM withdrawals saw an increase of 12.2% in FY18 with the number of ATMs growing by around 43%. Cash withdrawals from credit cards have thus received proper infrastructural support too, making them more useful than ever.
While the credit card cash withdrawal facility receives a generous boost, cardholders must also know all of its aspects to make the most out of it. So, here is a guide you may refer to when availing the cash withdrawal feature from your credit card.
Understanding credit card cash withdrawal facility
While you can shop at physical stores and make online payments, card issuers also make it possible to withdraw cash from ATMs. However, it is not the same as withdrawals through debit cards and comes with the pre-sanctioned credit card cash withdrawal limit.
As features provided by various issuers differ, you may find such facilities on offer only with some lenders. Hence, before availing a credit card, check whether it offers ATM cash withdrawal facilities in the first place.
Also, the available credit card cash withdrawal limit can range anywhere between 20% and 40% of the credit limit you are eligible for. The facility also attracts an interest charge on the amount withdrawn based on the lender’s policies.
Hence, you can apply for a credit card online with this facility and secure a backup for any cash shortage you face in your everyday life.
The application process to avail a credit card with this facility is similar to the one for any other card. As it comes integrated with all other features, you do not have to meet any additional requirements to avail it. Once you have applied, wait to be contacted by your lender. After initial verification, you will receive the card.
Credit card cash withdrawal – Interest and other charges
As credit cards are designed primarily for digital payments, cash withdrawal is an additional facility. It thus attracts charges like processing fee and interest at pre-decided rates.
Some of the best lenders charge a nominal processing fee of flat 2.5% on the amount withdrawn. It thus makes this feature affordable for the card user as well. Also, you may withdraw an amount multiple times within the available credit card cash withdrawal limit allowed by your card issuer.
As for the interest rate, you must be cautious when choosing a card with this facility as high interest rates will increase the cost of borrowing. With the best lenders in the market, the facility is available at affordable rates of interest on a per-month basis.
Also, the availability of an interest-free period from the day of withdrawal provides you with ample time to repay the amount withdrawn, thus saving you from interest payment. Such facilities make these cards an ideal financial tool while expanding the scope of credit card meaning.
While the facility comes with advantages like sufficient cash flow, you must select the right card that increases the convenience of use. For instance, cards like the Bajaj Finserv RBL Bank SuperCard come with an interest-free period of up to 50 days, the availability of emergency loan for up to 90 days with easy EMI conversion, etc.
Now, with this understanding of credit card meaning and the cash withdrawal facility, you may proceed to apply for the best card. Make sure to know other available features and repay your credit card debt in time to make the most of your credit instrument.