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Withdrawing cash from a credit card
In India, credit cards have transformed the way people think about getting loans and other forms of credit. A credit card has many functions, including the cash advance function, which provides cardholders with instant cash. Unlike other loans, the credit card cash advance option does not require any bank authorization or additional documentation.
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What is a cash withdrawal from a credit card?
The technical term for a credit card cash withdrawal option is a credit card cash advance. It allows credit card holders to withdraw money from the bank’s ATM using their credit cards. Since credit cards are commonly used for card transactions, the ability to withdraw money is a bonus offered by banks. Cardholders who use the service can withdraw money up to a certain limit and must reimburse it along with interest and other charges.
What was the difference between a credit limit and a cash advance limit on a credit card?
While a credit card’s credit limit is the maximum amount that can be spent, a credit card’s cash limit is the maximum amount that can be withdrawn with it. The cash limit on a credit card is usually included in the authorized credit limit. Most banks provide for a cash limit of 20-40% of the total credit limit. For example, if the total credit limit of a card is Rs. 1 lakh, you can withdraw up to Rs. 20,000 to Rs. 40,000 in cash. The remaining funds should only be used for card transactions.
The monetary limit of a credit card is usually announced to the card holder when the card is issued by the bank.
The cash limit may not have been the same for all types of credit cards from the bank, so it differs from card to card and from customer to customer. The liquidity limit on a particular card is not fixed and can be changed at any time at the discretion of the bank.
Banks may adjust the limits on a regular basis or based on various factors such as card usage trends, cardholder repayment behavior, defaults, and other credit information obtained from credit bureaus. credit.