Can we withdraw money from credit card?

Yes, but it’s usually a bad idea.

This is called a cash advance. And it comes with strings attached.

What withdrawing money from a credit card means

Withdrawing money from a credit card is not the same as using it for shopping.

It means taking cash from:

• An ATM
• A bank counter (in some cases)

The amount withdrawn is treated as borrowed money. Immediately.

No grace period. No waiting.

How cash withdrawal actually works

When cash is withdrawn using a credit card:

• Interest starts the same day
• Higher interest rates apply
• Extra fees are charged

Unlike normal card spending, there’s no interest-free window here.

That’s the catch.

Charges involved in credit card cash withdrawal

This is where things add up fast.

Usually, these apply:

• Cash withdrawal fee (percentage or flat)
• Daily interest from day one
• GST on fees and interest

Even a small withdrawal can become expensive quickly.

Why banks allow cash withdrawal at all

Good question.

Cash advance exists for emergencies.

Medical need. Travel trouble. No access to bank funds.

It’s a last-resort feature. Not a regular option.

Used rarely, it solves a problem.

Used casually, it creates one.

Impact on credit score

Cash withdrawal affects credit health too.

Reasons:

• Credit utilisation increases
• High-risk behaviour is flagged
• Repayment pressure rises

One withdrawal won’t destroy a score, but repeated use doesn’t look good.

Better alternatives to consider

Quick tip. Before withdrawing cash:

• Use bank account or UPI
• Borrow short-term from known sources
• Convert card spends into EMI instead
• Use emergency savings if available

These cost less in the long run.

When cash withdrawal might make sense

Very few situations.

• No access to bank funds
• Genuine emergency
• Clear plan to repay immediately

Even then, repayment should be quick.

The faster it’s paid back, the less damage it does.

Things to check before withdrawing

Before using a credit card at an ATM, check:

• Cash withdrawal limit
• Interest rate for cash advance
• Fees charged per transaction

Knowing the cost beforehand prevents shock later.

FAQ

Is cash withdrawal from credit card allowed?

Yes, but it attracts high charges.

Is there an interest-free period on cash withdrawal?

No, interest starts immediately.

Does cash withdrawal affect credit score?

It can, especially if used often.

In short

Money can be withdrawn from a credit card.

It is expensive and risky.

Best saved for real emergencies.

Still wondering if a cash advance is worth the cost?