This new year, while you were on a holiday at a hill station, you tripped and hurt yourself badly. As you rushed to the nearby clinic, you realized it doesn’t accept credit cards. Thankfully, there was an ATM nearby and you knew that you can withdraw cash through a credit card from any ATM. Great service, but it doesn’t come for free and can, in fact, turn out to be very costly. So, use it only during an emergency.
How much? The maximum amount you can withdraw is preset by the bank and is usually up to 30% of the credit card limit.
What’s the fee? Every time you use the credit card to withdraw cash, you would need to pay a fee, which is either a percentage of the amount you withdraw or an amount fixed by the bank.
Top-up charge: The credit card vendor will also charge you a daily interest on the amount, starting from the day of withdrawal till the day you repay it. This is usually 2.5% of the amount withdrawn per month. So, if you withdraw Rs10,000, a year later, you would owe the bank Rs13,000.