Withdrawing money from a credit card can be a convenient option during emergencies. However, it is crucial to understand the process and the associated risks to avoid unnecessary financial strain. This comprehensive guide will walk you through how to withdraw money from credit card safely while also considering the impact on your CIBIL score.
Understanding Cash Advances
A cash advance is a service provided by credit card issuers allowing cardholders to withdraw a certain amount of cash. This process is straightforward but comes with higher interest rates and fees compared to regular credit card transactions.
Steps to Withdraw Money from Your Credit Card
- Check Your Credit Limit:
Before withdrawing money, ensure you know your credit limit and the cash advance limit, which is typically lower than your total credit limit. You can check this information through your bank’s online portal or mobile app.
- Know the Fees and Interest Rates:
Cash advances usually come with a transaction fee, often around 2.5% to 3% of the withdrawn amount. Additionally, the interest rate on cash advances is higher, and there is no grace period, meaning interest starts accruing immediately.
- Locate an ATM:
You can withdraw cash from an ATM using your credit card. Ensure the ATM accepts your card network (Visa, MasterCard, etc.). Most banks have a list of compatible ATMs on their websites.
- Insert Your Card and Enter Your PIN:
Use your credit card just like a debit card. Insert it into the ATM and enter your PIN. If you do not have a PIN, contact your credit card issuer to set one up.
- Select the Cash Advance Option:
On the ATM screen, choose the option for a cash advance. The wording may vary depending on the ATM but look for options like “Credit Card Cash Withdrawal” or “Cash Advance”.
- Enter the Amount:
Enter the amount you wish to withdraw. Ensure it is within your cash advance limit. Confirm the transaction once you have double-checked the amount.
- Collect Your Cash and Receipt:
The ATM will dispense the cash and a receipt. Keep the receipt for your records, as it includes details of the transaction.
To maintain a healthy credit score, it’s advisable to keep your credit utilisation ratio below 30% and pay your dues on time. Regularly performing a CIBIL score check can help you monitor your credit health and stay on track.
Safety Tips for Withdrawing Money from a Credit Card
- Avoid Frequent Withdrawals:
Repeated cash advances can lead to high interest charges and fees, which can quickly accumulate, leading to financial difficulties.
- Use Secure ATMs:
Only use ATMs in well-lit, secure locations. Avoid isolated ATMs to reduce the risk of theft or card skimming.
- Protect Your PIN:
Always cover the keypad when entering your PIN to protect against prying eyes or hidden cameras.
- Regularly Monitor Your Account:
Check your credit card account frequently to detect any unauthorised transactions early.
Applying for an Airtel Axis Bank Credit Card Using the Airtel Thanks App
If you’re considering a new credit card, the Airtel Axis Bank Credit Card offers various benefits. Here’s how you can apply using the Airtel Thanks App:
- Visit the Airtel Thanks App:
First, open the Aitel Thanks App on your mobile phone. If you haven’t downloaded the application, install the same from the application store of your mobile.
- Register/Log In:
Next step is to get your account registered or log in if you already have an account.
- Browse the home page:
On the home screen, find the section dedicated to financial services or credit cards.
- Select Airtel Axis Bank Credit Card:
Browse through the available credit cards and select the Airtel Axis Bank Credit Card.
- Fill in Your Details:
Complete the application form with your personal and financial details. Ensure all information is accurate to avoid delays in processing.
- Submit Required Documents:
Upload the necessary documents, such as identity proof, address proof, and income proof. The app will guide you on the specific documents needed.
- Verify and Submit:
Double-check all the entered information and submitted documents. Once verified, submit your application.
- Track Your Application:
After submission, you can track the status of your application through the app. You will also receive notifications on your registered mobile number.
Withdrawing money from a credit card can be a helpful option in emergencies, but it’s important to proceed with caution. By understanding the fees, interest rates, and the impact on your CIBIL score, you can manage the process effectively. Always prioritise quick repayment to minimise interest charges and protect your credit score. Additionally, if you’re in need of a new credit card, consider applying for the Airtel Axis Bank Credit Card through the Airtel Thanks App for a seamless experience.