How To Withdraw Cash From A Credit Card Guide

In the booming digital era, personal financial management has become an indispensable part of daily life. Credit cards with flexible and convenient payment capabilities have gradually become popular. 

This article will provide detailed and easy-to-understand instructions so you can withdraw money from your credit card without worrying about any additional fees. Follow and apply  this method of withdrawing money from your credit card  to improve your financial management, ensuring that the withdrawal is not only quick but also safe

1. Should you withdraw cash from your credit card?

When withdrawing cash from a credit card, you need to pay attention to the following issues to avoid unnecessary risks. Right after this, let's learn about the advantages and disadvantages of  using a credit card to withdraw cash  !

1.1 Advantages

In situations where you need cash urgently, using a credit card to withdraw cash can be a reasonable option. It is a quick and convenient method that allows users to access cash without going through a complicated borrowing process. 

One of the main benefits of withdrawing cash from a credit card is convenience. You can easily find the nearest ATM or go to a bank branch to make a transaction without having to wait in line or deal with cumbersome administrative procedures. 

Plus, the process of withdrawing money from a credit card is usually quite simple. Unlike conventional loans, you don’t need to provide collateral or detailed financial information. This also reduces the paperwork and waiting time, making the withdrawal process quicker and less complicated.

1.2 Disadvantages

When you make a cash advance transaction from your credit card, you need to consider carefully the costs that may arise when withdrawing money. First, you will be charged a cash advance fee, which is a fee that is applied to each cash advance transaction. 

This fee is usually charged as a percentage of the withdrawal amount, with a fixed minimum amount, which can significantly increase the total cost of the withdrawal.

Additionally, interest rates on cash withdrawals are often much higher than those on regular purchases, so you should prioritize credit cards with low cash withdrawal fees that match your cash withdrawal goals. 

To meet the need to withdraw cash from a credit card, you can find out about credit cards with unlimited withdrawals up to 100% of the limit and an annual fee of 0 VND for the first year (free for the next year if the previous year spent 12 million) 

Additionally, cash withdrawals also affect your credit limit. The amount you withdraw will be deducted immediately from your  available credit limit  , reducing your ability to make other transactions with your credit card.

Therefore, before you decide to use your credit card to withdraw cash, carefully consider all possible costs and choose a credit card suitable for the purpose of withdrawing cash to avoid unreasonable withdrawal fees. 

2. Ways to get cash from credit card 

To meet customers' cash needs, banks today have provided many solutions for withdrawing cash from credit cards. You can refer to some of the following ways:

2.1 Withdraw money at ATM

This is the most traditional and popular way to get cash from your credit card. You just need to find the nearest ATM, go through the withdrawal steps as usual and the money will be released immediately. However, be aware that ATM cash withdrawals often come with higher withdrawal fees and interest rates than other transactions.

2.2 Withdraw via switchboard

If you can't get to an ATM or want to withdraw a large amount of money, you can call your bank's call center to request a withdrawal. This usually requires you to provide your personal and credit card information, and you can then pick up the cash at a bank branch.

2.3 Transfer money from credit card to bank account

Some banks allow you to transfer money from your credit card to your bank account. This can be a convenient way to get cash if you need to make a payment or transfer money right away. However, like ATM withdrawals, fees and interest may apply.

2.4 Using online payment services

Some online payment services allow you to use your credit card to send money to others or even yourself. You can then withdraw that money from your linked bank account. This is a relatively new way to do it and is becoming increasingly popular due to its convenience and speed.

3. Latest credit card cash withdrawal fees

As of the latest information, credit card cash advance fees typically range from 1% to 4% per month, depending on the bank that issued the card. This means that if you withdraw money from your credit card, you will be charged a certain fee based on the total amount withdrawn. 

Additionally, interest rates on cash withdrawals are very high, often 18% or more. It is important to note that you should not overdraw your entire credit limit, with most banks only allowing a maximum of 50-70% of your card limit to be withdrawn. For more information, you can consult official sources or contact your bank directly. 

4. Alternatives to Credit Card Cash Advances

There are several alternatives to credit card cash withdrawals that you can consider, such as:

4.1. Use of reserve funds

Reserve fund or personal savings fund, you should normally set aside 5 - 10% of your monthly income to put into this reserve fund (can be a savings book or piggy bank) to use for personal plans or emergencies. 

4.2. Pay by credit card and keep cash

Pay by credit card when purchasing goods or using services. Prioritize brands, stores, supermarkets, restaurants that allow you to pay by credit card to receive incentives and refunds.

4.3. Use credit card installment purchase program

If you decide to use a credit card, you cannot ignore the extremely attractive installment purchase items, you even receive more bonus points and gifts than other forms. Besides, installment payment also creates a more positive work habit for you, with clearer and more effective goals.

4.4. Withdrawal of savings before maturity

If it is an emergency, you should prioritize early withdrawal of savings over direct cash withdrawal from credit card. In fact, the interest rate of savings account is always lower than the interest rate from credit card withdrawal. You may lose some interest, but minimize the cost of cash withdrawal from credit card.

5. Notes when withdrawing money from credit card

To withdraw money from a credit card effectively and avoid financial risks, we need to note the following:

5.1 Withdrawal limit

Each credit card has a specific cash advance limit, usually a small portion of the total credit limit. It is important to check this limit before making a withdrawal to avoid incurring a penalty fee for exceeding the allowed limit.

5.2 Cash withdrawal fees and interest calculation

When you withdraw cash from your credit card, you will be charged a flat cash advance fee or a percentage of the amount withdrawn. Additionally, the interest rate on cash advances is usually higher than the interest rate on purchases, and this interest is charged from the day of withdrawal, with no grace period.

5.3 Impact on credit score

Cash advances on credit cards can negatively impact your credit score. A high credit utilization ratio can lead to a decrease in your credit score.

Hopefully, with the information and tips shared, you will be able to maximize the benefits of your credit card, while maintaining flexibility in managing your personal finances. Remember, using a credit card requires planning and safety. Wishing you success and safety in all your financial transactions.