How to pull money out of credit card

Just about everyone has a credit card to pay for purchases. But what about withdrawing cash from your credit card? Does everyone do it? Not really. Let’s take a good hard look at Credit Card Cash withdrawal – and understand the whole thing better.

Table of Contents Show

Useful tips for drawing cash from your credit card and making the most of hot travel deals
Cashing out a credit card is different from credit card overdrafts
Pay attention to the interest rates
Keep an eye on the 2 limits
Don't miss out on the promo

Credit Cards are an easy way to pay for purchases. They are like mini credit facilities – where you can buy things that you pay for later. Several cards have cash components – which give instant liquid cash to card holders. It is an additional feature offered by banks on a credit card. But is it a good idea to withdraw cash on a Credit Card?

Credit Card cash withdrawals are easy. No fuss. And instant. You just go to an ATM and take the cash that you need, within the allocated limit. It doesn’t need any special approval from the bank or anything. And you pay it back along with the charges that come with cash withdrawals.

Credit and Cash limits on cards

Every card has a credit limit – that is the maximum amount that can be spent on that card. This has been set by the bank based on a person’s income, his credit worthiness and repayment capability. And there is a fixed cash limit on a card as well. This varies from card to card and from customer to customer. It can be changed at the discretion of the Bank at any time as well. A card holder cannot withdraw more than the specified limit. The credit and cash limits will be communicated to card holders when the card is being issued.

How to withdraw money from a credit card

You can withdraw money from a credit card in a few easy steps –

You go to an ATM.
Insert your credit card in the machine.
Put in your PIN.
Withdraw cash as per availability.

Cash Advance Fees

When a person draws cash on a Credit Card, it attracts a fee which is called the Credit Card Cash Advance Fee. This fee, which is a percentage of the amount withdrawn, will appear in the next billing statement, along with the entire amount withdrawn and interest levied on the withdrawn amount. Each time a person draws cash on a Credit Card, the fee will be charged – even if you draw cash multiple times on the same day.

Interest on Credit Card Cash Withdrawals

Cash advances on credit cards also attract interest, apart from the cash advance fees. The interest is a monthly percentage rate that is levied from the date of the transaction to the date the repayment is made in full. Most banks typically charge a rate of interest of 2.5% to 3.5% per month on all cash advances. This varies from bank to bank.

Over the Limit fees

It is important to know how much your cash limit is – and withdraw only within those limits. If you exceed the limit for some reason, an Over the Limit charge will be charged.

Some pointers –

You can withdraw cash from any ATM – but it is better to stick to your own card’s bank ATM to avoid any extra charges.
There may be a cap on the amount of cash you can withdraw in a day. You should find that out before you withdraw cash.
Withdrawing cash from a Credit Card won’t affect your credit rating or score – but your repayment pattern will. So if you withdraw any cash, make sure that your repayment is above par so that you don’t attract enormous charges and your credit rating is unaffected.

Advantages of Credit Card Cash Withdrawal

You get instant cash when you need it.
No documentation or prior approvals are required.

Disadvantages of Credit Card Cash Withdrawal

Each time you withdraw cash, you need to pay the cash advance fee and other charges.
You pay an interest – charged from the date of your cash withdrawal until you repay it entirely.
You won’t get any Reward Points on cash advances.
Partial payments or no payments by the due date may result in interest charges on all purchases in addition to the cash advance fees.

So while a credit card cash advance might look like a very convenient way to get cash, it is expensive and should only be used if there is no other way out.

Useful tips for drawing cash from your credit card and making the most of hot travel deals

It's ideal to have your travel funds ready in your savings account so when the cheap holiday flights and hotel packages are available, you can just grab your cash and go. But when the time comes, not everyone is well prepared. To save you from needing to acquire extra cash, credit cards can come in handy. With so many products out there, do you know what to look for when cashing out your card? Here are a few tips for getting those extra bucks for your vacation.

Cashing out a credit card is different from credit card overdrafts

Many people mistake cashing out your card and credit card overdrafts to be the same thing. While they both let you draw cash from your credit limit and generally offer express approval without supporting documents, withdrawing money directly from the ATM with your credit card may cost you a daily interests as high as 40%, plus a handling fee about 5%. On the other hand, by getting cash out under cash out plans, you pay a lower interest rate with the same level of flexibility, as the amount is usually disbursed to your designated account in 3 days – just in time for your trip.

Pay attention to the interest rates

Some cash out plans only highlight the lowest monthly handling fee, monthly flat rate or APR, but that is not the actual cost of lending. The actual interest rate depends on many factors including your credit ratings, cash out amount and repayment period. Ask your bank before you get cash from your card.

Keep an eye on the 2 limits

First, it's the actual cash out limit of your card. As it's calculated based on your repayment capacity, it could be much lower than your credit limit. So don't overestimate how much you can borrow!

The second is the available credit limit after cash withdrawal. Your available credit limit will decrease as part of it has been turned into cash. While it may affect your every day spending with the credit card, the available credit limit will increase again after your repayment and you won't have to worry about going hungry!

In general, you can't earn points for cashing out your card, so make sure you don't miss out on the promotions. HSBC Cash Instalment Plan gives you different limited time, exclusive offers. Go on our website now to check our latest offers. Cash Instalment Plan also allows you to repay a fixed amount with a personalised monthly handling fee for 6-60 months - perfect for travellers who prefer more stability. Calculate your monthly repayment and daily average handling fee with our repayment calculator for Cash Instalment Plans.

For globetrotters who prefer flexibility, HSBC's Cash Credit Plan is the one for you. With no fixed repayment period or repayment amount, it gives you a preferential interest rate for the first 180 days. It's up to you to decide on the travel and repayment schedule.

Comparison between Cash Instalment Plan and Cash Credit Plan

-	HSBC Cash Instalment Plan	HSBC Cash Credit Plan
Monthly repayment amount	Fixed	As low as the minimum payment of credit card monthly statement
Fee	Personalised monthly handling fee	Preferential annual interest rate
Repayment period	6 to 60 months	No fixed period
How to get extra cash	Apply online and get it in your designated account	Apply online and get it in your designated account

Comparison between Cash Instalment Plan and Cash Credit Plan

-	Monthly repayment amount
HSBC Cash Instalment Plan	Fixed
HSBC Cash Credit Plan	As low as the minimum payment of credit card monthly statement
-	Fee
HSBC Cash Instalment Plan	Personalised monthly handling fee
HSBC Cash Credit Plan	Preferential annual interest rate
-	Repayment period
HSBC Cash Instalment Plan	6 to 60 months
HSBC Cash Credit Plan	No fixed period
-	How to get extra cash
HSBC Cash Instalment Plan	Apply online and get it in your designated account
HSBC Cash Credit Plan	Apply online and get it in your designated account