Text size:
S M L
Letter spacing:

FinFIRST Blogs

Credit Card

Credit Card Cash Withdrawal: Explaining the concept

Key Takeaways

A credit card cash withdrawal, also known as a cash advance, allows you to access instant funds, but comes with specific limits, charges, and repayment obligations.
Interest on withdrawn cash starts immediately, unlike regular purchases, making it a relatively expensive borrowing option.
Frequent withdrawals can increase your credit utilisation ratio and may negatively impact your credit score if not managed responsibly.
Understanding fees, limits, and repayment terms is essential to using this facility wisely and avoiding unnecessary financial burden.

26 May 2026 by Team FinFIRST

Apply Now

Many credit card holders wonder whether they can withdraw cash from their credit card, especially during urgent cash requirements. While a   cash loan from a credit card is available with many providers and can be useful in an emergency, it comes with certain disadvantages worth understanding before you use the facility.

It is not wise to withdraw cash from a credit card just because you can. Read on to know why.

What details does a Credit Card statement provide?

Know how a Credit Card works in India

What is a credit card cash withdrawal?

Cash advance is the official term for credit card cash withdrawal. It enables credit cardholders to draw cash from an ATM utilising their credit cards. Because credit cards primarily help with payments, the facility of withdrawing cash feels like a bonus function. Cardholders who use the service can withdraw cash up to a certain limit and must repay it along with interest and other fees.

However, the service may not be accessible on all credit cards, and the cash withdrawal limitations and finance charges may differ from one card to another. As a result, credit card users should read the terms and conditions that apply to their card.

How does a cash from a credit card advance work?

Credit cards help with purchases. For instance, you can use your card to pay for products in stores or online. When you make a purchase, the amount is deducted from your available credit limit. Your limit is restored once you settle the outstanding balance. Cash advances made with a credit card operate differently.

If your card enables it, you may have two credit limits: one for transactions and another for cash advances, which is normally lower than the transaction limit. You draw money against this line of credit when you get a cash advance.

QUOTE: "Most credit cards charge interest on cash withdrawals from day one. IDFC FIRST Bank Credit Cards may offer an interest-free period on ATM cash withdrawals, subject to card terms and timely repayment."

Steps to withdraw cash using a Credit Card

A credit card cash withdrawal allows you to access instant funds through an ATM in a simple and structured manner. To understand how to get cash from a credit card, follow these steps:

Locate an ATM that supports your card network such as Visa, Mastercard, or RuPay.
Insert your Credit Card into the machine and securely enter your PIN.
Select the ‘Credit Card’ option, if prompted, and choose ‘Cash Withdrawal’.
Enter the amount you wish to withdraw, ensuring it is within your permitted cash limit.
Confirm the transaction and collect the cash along with the receipt.

While this is the most common method, those exploring how to withdraw money online from a credit card should note that direct online cash withdrawal is generally not available.

Impact of Credit Card cash withdrawal on credit score

Using the credit card cash withdrawal facility can influence your credit profile if not managed carefully. When you withdraw cash, it increases your credit utilisation ratio, which is one of the key factors in determining your credit score. A higher utilisation ratio may signal higher dependency on credit, which lenders may view negatively.

Additionally, interest on cash withdrawals is generally charged immediately, often at higher rates than regular transactions, without any interest-free period. If you do not repay the amount on time, the outstanding balance can grow quickly, further affecting your repayment history.

Frequent usage may indicate financial stress, which can reduce your creditworthiness over time. Therefore, it is advisable to get cash from a credit card only when necessary. Remember to ensure timely repayment to minimise any adverse impact on your credit score.

Advantages and Disadvantages of Credit Card Cash withdrawal

Advantages

Instant access to funds: A credit card cash withdrawal provides immediate liquidity without lengthy approval processes during emergencies.

Flexible usage: You can use the withdrawn amount for any purpose during urgent financial needs.

Disadvantages

High fees and charges: Transactions usually attract a fee of around 2–3% of the withdrawn amount, increasing overall cost.

Higher interest rates: Interest starts accruing immediately, making it an expensive borrowing option.

Impact on credit score: Frequent withdrawals may negatively affect your credit profile and future borrowing eligibility.

Limits of credit and cash withdrawal using a Credit Card

Every Credit Card comes with a predefined credit limit and a separate cash withdrawal limit. The cash limit is usually a portion of the total credit limit, typically ranging between 20% and 30%, depending on the card issuer.

For instance, if your total credit limit is ₹2,00,000, your cash withdrawal limit may range from ₹40,000 to ₹60,000. Understanding these limits is essential when planning a credit card cash withdrawal, as exceeding them may lead to declined transactions or additional charges.

Being aware of these limits can help you manage your usage effectively while avoiding unnecessary fees and maintaining better control over your credit profile.

Top of Form

Bottom of Form

How much does a credit card cash withdrawal cost?

Cash advances do not come free of cost. The primary charge is a cash advance fee, which is a convenience fee for withdrawing cash against your cash advance limit. This could be a fixed amount or a percentage of the withdrawn amount, whichever is higher. The fee can vary from card to card.

Beyond the cash advance fee, there may be additional costs such as ATM charges or bank branch fees depending on where you withdraw. The annual percentage rate (APR) on cash advances is also typically higher than on regular purchases, and on most cards interest begins accumulating from the transaction date itself.

With IDFC FIRST Bank Credit Cards, cash withdrawals are interest-free up to 45 days, with a cash advance fee of ₹199 plus GST per withdrawal.

Conclusion

A credit card cash withdrawal can be a useful option during urgent financial needs, offering quick and convenient access to funds. However, it should be used cautiously due to higher interest rates, additional fees, and its potential impact on your credit score. By understanding how it works and using it only when necessary, you can maintain better financial discipline and protect your overall credit health while still benefiting from this facility when required.

Frequently Asked Questions

What is a credit card cash withdrawal and how does it work?

A credit card cash withdrawal, also known as a cash advance, allows you to withdraw cash using your credit card from an ATM. The withdrawn amount is deducted from your available credit limit. Unlike regular purchases, interest on cash withdrawals starts accruing immediately from the transaction date, with no interest-free period. This facility is useful during emergencies but should be used cautiously due to higher costs.

How much does a credit card cash withdrawal cost?

Cash withdrawals typically involve a transaction fee, usually around 2.5% to 3% of the withdrawn amount, subject to a minimum charge. In addition, interest rates on cash advances are higher than standard purchase rates and are charged from day one until repayment. GST is also applicable on fees and interest, increasing the overall cost.

Does credit card cash withdrawal affect your credit score?

Yes, frequent cash withdrawals can negatively impact your credit score. It signals higher credit dependency and may increase your credit utilisation ratio. Additionally, if the withdrawn amount is not repaid on time, it can lead to missed payments, further affecting your credit profile.

What is the cash withdrawal limit on a credit card?

The cash withdrawal limit is a portion of your total credit limit, usually ranging from 20% to 40%. This limit is predefined by the issuer and can vary based on your credit profile, card type, and repayment history.

How do you withdraw cash from a credit card at an ATM?

To withdraw cash, insert your credit card into an ATM, enter your credit card PIN, select the cash withdrawal option, and choose the desired amount within your limit. Confirm the transaction, and the cash will be dispensed, with charges applied accordingly.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.