Credit Card cash withdrawal: At the time, when Coronavirus lockdown has been extended till 17th May 2020, some people might be feeling the cash heat and they might get prompted to go for Credit Card cash withdrawal from ATM. However, the question here is, is it wise to do that?
Speaking on Credit Card cash withdrawal from ATM; SEBI registered tax and investment expert Jitendra Solanki said, “Money withdrawal from ATM using Credit Card should be avoided as much as you can as it involved high interest rate and charges. Apart from this, if the credit card holder fails to submit minimum dues, then his o eh CIBIL score or credit score will get affected very badly.” Solanki said that when you go for Credit Card cash withdrawal from ATM, there is around 2.5 per cent to 3 per cent cash withdrawal charges involved that one will have to pay next month with the credit card payments. He said that apart from withdrawal charges, there is finance charges involved, which is also an advance charges that credit card holder needs to pay from the date of withdrawal to date of payment.
Highlighting the Credit Card cash withdrawal charges and high interest rate on Credit Card cash withdrawal; Manikaran Singhal, a sEBI registered tax and investment expert said, “On cash withdrawal from ATM using credit card, there is 4 per cent monthly interest rate, which is levied from the date of withdrawal to date of payment.” Explaining with an example Singhal said, “If your credit card hit is 21st of every month and you have withdrawn cash using credit card on 10th of any month, then you will have to pay for the Credit Card cash withdrawal from ATM on 21st of next month. In this period, you will have to pay withdrawal charges, finance charges and 4 per cent monthly interest for the period from 10th this month to 21st next month.”
Singhal said that on Credit Card cash withdrawal from ATM, one won’t be eligible for reward points on credit card payments as well. He said that Credit Card cash withdrawal from ATM hits your CIBIL Score as well because it reflects your bad financial condition.