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Credit card cash withdrawal: Why withdrawing ₹10,000 can cost you more than expected in fees, interest and other charges
Mint 1 hr ago·2 Nov 2026, 10:35 am
Withdrawing cash from a credit card is not the same as using it for purchases. When you use a card for a purchase, you get a grace period to pay the amount back without interest. However, a cash advance is treated as a loan. This means you start paying interest immediately from the day you take the money out, and there is no interest-free period.
This borrowing method comes with steep costs. Banks typically charge a cash advance fee, often a percentage of the amount withdrawn, plus a mandatory Goods and Services Tax (GST). Because the interest is calculated daily and compounds quickly, a small withdrawal can turn into a large debt. It is important to understand these charges before using your credit card for cash withdrawals.
For investors, this highlights the importance of managing personal debt. High-interest credit card debt can eat into your investment returns or savings. It is generally advisable to avoid cash advances and use other financing options with lower interest rates, unless it is an absolute emergency.
Excerpt from Mint
Withdrawing ₹ 10,000 using a credit card can cost more than expected. Understand cash advance fees, interest rates, GST, repayment calculations and why credit card cash withdrawals can become an expensive borrowing option. Withdrawing cash on a credit card can seem like a convenient fix in an emergency, such as a…Read the original at Mint
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