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What is Credit Card Cash Withdrawal? Understanding 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Interest on withdrawn cash starts immediately, unlike regular purchases, making it a relatively expensive borrowing option.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.

27 Aug 2026 by Team FinFIRST

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Many credit card holders wonder whether they can withdraw cash from their credit card. It is especially true when they are facing a cash crunch. A  cash loan  from a credit card is available from many credit card providers. 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.

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 card holders 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 together 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. Until you settle your credit card dues, the outstanding credit gets reduced by the amount of purchases you make. 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.

As opposed to purchases, where you normally have an interest-free period to settle your debt before interest accrues, cash from credit card advances starts charging interest right away.

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. However, funds can sometimes be transferred using specific banking services, depending on the issuer.

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 a key factor 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 charged immediately, often at higher rates than regular transactions, without any interest-free period. If you do not repay the amount promptly, 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.

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, offering convenience 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.

How much does a credit card cash withdrawal cost?

Withdrawing cash using a credit card involves several charges. The total cost can include the following:

Cash advance fee: This is the fee charged for withdrawing cash against your available cash advance limit. It may be a fixed amount or a percentage of the withdrawn amount, whichever is higher. The fee varies across credit cards.

ATM or teller charges: If you withdraw cash from an ATM or a local bank, additional ATM or teller charges may apply (depending on the service provider).

Interest charges: Cash withdrawals generally attract a higher annual percentage rate (APR) than regular purchases or balance transfers. Unlike purchases, interest on a cash advance typically starts accruing immediately after the withdrawal.

IDFC FIRST Bank credit card charges: With IDFC FIRST Bank credit cards, you can make interest-free ATM cash withdrawals for up to 48 days. A cash advance fee of ₹199 per transaction applies, while the monthly interest rate on cash advances ranges from 0.75% to 3%

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

How much does it cost to withdraw cash using an IDFC FIRST Bank Credit Card?

With an IDFC FIRST Bank Credit Card, a cash advance fee of ₹199 + GST per transaction becomes applicable when you withdraw cash from an ATM. In addition, the monthly interest rate applicable to cash advances ranges from 0.75% to 3%. Other ATM or teller charges may also apply depending on the service provider.

How long is the interest-free period for cash withdrawals with an IDFC FIRST Bank Credit Card?

IDFC FIRST Bank Credit Cards allow interest-free ATM cash withdrawals for up to 48 days. However, the ₹199 cash advance fee + GST per transaction still applies, and the applicable monthly interest rate for cash advances ranges from 0.75% to 3%.

What is the cash withdrawal limit on an IDFC FIRST Bank Credit Card?

The cash withdrawal limit is a separate limit from the overall credit limit. The exact limit depends on the card and the limit assigned to the cardholder. Therefore, cardholders should check their available cash withdrawal limit before making an ATM withdrawal rather than assuming that the entire credit limit can be withdrawn as cash.

Can frequent cash withdrawals from an IDFC FIRST Bank Credit Card affect my credit score?

Frequent cash withdrawals can increase your credit utilisation and may affect your credit profile if they indicate a growing dependence on borrowed funds. Delayed repayment can further affect your repayment history. Therefore, even with the cash withdrawal facility available on IDFC FIRST Bank Credit Cards, it is better to use it selectively and repay the amount promptly.

What is the difference between my credit limit and cash withdrawal limit?

Your overall credit limit represents the maximum outstanding amount you can use on your credit card, while the cash withdrawal limit specifies how much of that limit can be accessed as cash. The cash withdrawal limit is generally lower than the overall credit limit and is determined separately for the card.

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.