Credit cards often enable you to withdraw cash from ATMs under their cash advancement facility. However, it is very important to find the answer to the question, “what is the cash limit in credit cards?” Firstly, this limit is always significantly lower than your credit card limit. You should not normally use this feature except when in an emergency.
However, cards like the Bajaj Finserv RBL Bank SuperCard allow you to withdraw cash at zero interest for 50 days. Only a nominal processing fee of 2.5% is charged on the transaction. A better idea could be to avail of a personal loan instead. If you need the money for a short period, you can save more with the card charging just 1.16% interest per month (no processing fee).
What is the Cash Limit in Credit Cards?
If you are thinking about what is the cash limit in credit cards, generally Banks generally allow 20-40% of your total credit limit as your cash limit. You can withdraw this money at ATMs, but you must be particular about repayment. Make sure you pay back on time to avoid overdue charges. Use the card sparingly to avoid falling into a debt trap. You should refrain from late payments because that will seriously hurt your credit score.
Smart Tips Regarding Cash Limit
These are some tips to deal with cash limits on your credit card.
· Know Your Cash Limit: Before you contemplate withdrawing cash, know your cash limit. You can do this by logging in to your net banking account. If you are not comfortable with net banking, you can simply call the bank helpline number and get your query cleared. Alternatively, you could check the welcome kit of your credit card (provided you still have it around), or read the terms and conditions of the card. Another way to check the available cash limit is by going through your credit card statement.
· Know Your Liabilities: If you are thinking of withdrawing cash, make sure your cash limit is not affected due to your liabilities. If you are using a balance transfer credit card, cash withdrawal is not a wise choice. The less you use your credit limit, the better it is for your credit score.
· Be Aware of the Rates: Bank rates on cash advancement vary depending on your credit limit. Make sure you have the full knowledge of the amount you have to pay before you decide to make use of the credit limit. You must understand that you have to pay daily interest on your credit amount. Most banks have a minimum interest amount of Rs. 500, so make sure the cash withdrawal is worth it.
· Look for Alternatives: If you want quick money for a big investment, there are better ways than depending on your cash limit. Firstly, based on your account eligibility, you have a fixed cash limit. You might need a bigger sum to start with, so a personal loan might be a better choice. In that case, you will at least be able to communicate your needs with the issuer.
· Pay Online: If you have withdrawn cash, make sure you pay on time. There is no better way to ensure this other than making a scheduled payment online. You can fix an arrangement with your lender so that your payment is debited along with the interest on the stipulated day.
Some Caveats
There are certain reminders that you must be aware of regarding the cash limit. In most transactions you make by using your credit limit, you gain reward points. However, in the case of cash withdrawals, you will not get reward points. Furthermore, every transaction involving cash advancement might attract a processing fee. So, if the lender enforces a processing fee, make sure you withdraw all the money you need at once. You must be clear about your financial needs so that you can do this and avoid paying more. The transactions you make through cash advancement are not considered expenditures. Thus, they most likely do not add up towards the spending required to waive off the annual fee for the credit card.
The Bajaj Finserv RBL Bank SuperCard has a robust cash advancement feature within its credit limit. Enjoy seamless transactions when you do not have time to apply for loans. The card ensures tight security features to provide you with maximum safety during such transactions.
