You might need cash for some transactions, and digital payments have their disadvantages. Suppose you need to make an urgent payment and the server goes down. However, if you have the Bajaj Finserv RBL Bank SuperCard, you do not have any reason to worry. With minimal cash advancement fee and zero interest charged for up to 50 days, withdraw cash with confidence. Do not worry about how to get cash from a credit card. Just walk into an ATM and withdraw cash using your Bajaj Finserv co-branded credit card. It is that simple.
Nowadays, availing of a student credit card has also become easier with government subsidies. Cash withdrawal might be a good option for buying necessary educational items, paying college fees, etc. However, you must be careful about repayment to keep your credit score in a good place.
Credit Limit and Cash Advancement Limit
Before you initiate any kind of transaction involving your credit card, take the time to read the terms and conditions. Your cash withdrawal limit is a percentage of your total credit limit, and it is typically capped at 20-40%. Therefore, the higher your credit limit, the more cash you are eligible to withdraw. If you need more money, try to spend it via your card.
There are certain caveats that you must heed before you proceed with a cash withdrawal. The first among these is to know your credit card type. Credit and cash withdrawal limits vary with the type of card that has been issued. Secondly, ensure that you are absolutely sure about the cash withdrawal limit. Taking care of this is important because you might be charged heavily with interest exceeding the cash withdrawal limit.
Cash Advancement Fee and Interest Rates
Before you get cash from a credit card, make sure you have calculated the cash advance fee. Withdraw cash only if you are comfortable with the amount charged. Banks typically charge around 2-3% of the transaction amount as a cash advance fee. Lenders often waive off the interest for a time period. Banks that do not charge a cash advancement fee tend to be more expensive. This is because you need to pay a daily interest in these cases, and the percentage is quite hostile. The interest is charged until you pay back the amount in full. Therefore, make sure that you opt for cash advancement only when you are sure that you won’t take too long to repay the amount.
A cash advance fee is not a one-time thing. A transaction fee will be charged every time you withdraw cash from the ATM. To avoid paying a significant amount as a transaction fee, calculate the money you need carefully, and borrow only once.
Advantages of Cash Advancement
The most pronounced advantage of this feature is that you require absolutely zero paperwork to get the cash. This is a no-questions-asked facility that might soothe you during hard times. You can get the cash anytime because ATMs are seldom closed. The cash limit is not a fixed value. If you nurture your card carefully and increase your credit score, your credit limit will increase. This increase in credit limit will have a direct effect on the cash withdrawal limit. Therefore, this feature is much more preferable than the time-consuming personal loans, provided you are ready to repay within a short period.
How Does Cash Advancement Affect Credit Score?
Cash advancement is not reported by your lender in the balance statement sent to credit bureaus. Therefore, it does not affect your credit score much, unless of course, you fail to pay in time. Failing to pay in time is dangerous business because once you fall into this loop, you are caught in a debt trap.
Furthermore, you will not receive reward points or cashback for cash withdrawal. These transactions are not counted in the annual expenditure required for extra privileges. Therefore, use the cash advancement feature on your credit card sparingly, and do not make it a habit.