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Credit Card Cash Advance Fee: Charges, Interest Rates & Tips to Avoid
By Jupiter Team · · 3 min read
When you swipe your credit card for shopping, you often enjoy an interest-free period. When you withdraw cash from an ATM using the same card, costs kick in immediately. This means that a cash advance is essentially a short-term loan on your credit card with a separate cash advance fee and daily interest from day one. For example, a ₹10,000 withdrawal can cost several hundred rupees in just a month.
What is a Credit Card Cash Advance Fee?
A cash advance fee is charged when you use a credit card to take out cash from an ATM or bank branch.
How it differs from a normal purchase
- Purchases usually get a 20–50 day grace period if you pay the full bill by the due date.
- Cash advances have no grace period and start accruing interest immediately. According to issuer disclosures, for cash advances the free credit period is nil and finance charges apply from the transaction date.
Unlike normal purchases, cash advances often come with higher fees, no grace period, and immediate interest charges.
‘Cash Advance Fee’ in some of the Indian Languages
How Much Do Banks Charge for Cash Advances?
Cash withdrawal fees
Most cards levy 2.5% of the withdrawn amount with a minimum ₹300–₹500 per transaction. Examples: HDFC 2.5% or ₹500 whichever higher, Axis 2.5% min ₹500, Kotak 2.5% min ₹500, ICICI 2.5% min ₹300 on many cards.
Interest rates on cash advances
Interest typically ranges 3.4% to 3.75% per month depending on the bank or card variant. Examples include HDFC 3.49% per month on many variants, Axis 3.75% per month, ICICI 3.40% per month on several cards, SBI up to 3.75% per month.
Example: India-specific cost calculation
If you withdraw ₹10,000:
- Cash advance fee at 2.5% with ₹500 minimum leads to ₹500.
- Interest at 3.5% per month for 30 days adds ~₹350.
- Total extra cost in one month ≈ ₹850 + GST.
In other words, one month's cost alone is close to 9% of the withdrawn amount. If you carry the balance longer, interest compounds daily.
Credit Card Cash Advance Fee in India (Bank-wise Snapshot)
Cross-verified on official issuer pages as of 10 September 2025. Always check your specific card’s MITC for exact pricing.
Pros and Cons of Using Credit Card Cash Advance
Pros
- Instant liquidity in genuine emergencies
- Simple access at ATMs nationwide and abroad
- No separate application like a loan
Cons
- Immediate interest with no grace period
- Cash advance fee on top of interest and taxes
- Can raise your revolving balance and debt burden quickly
- If you pay only minimum due, compounding increases total cost
Tips to Minimize or Avoid Cash Advance Charges
- Prefer UPI, debit card withdrawals, or net banking for cash needs.
- Build an emergency fund to reduce reliance on cash advances.
- If you must withdraw, repay in full immediately to cut daily interest.
- Compare personal loan rates that can be lower than cash advances.
- Keep utilization in check to avoid snowballing interest.
FAQs on Credit Card Cash Advance Fees
Q1: What is a credit card cash advance fee?
It is the fee charged when you withdraw cash using your credit card, usually around 2.5% of the amount with a minimum ₹300–₹500.
Q2: How much interest is charged on a credit card cash advance?
Many cards levy 3.4% to 3.75% per month on cash advances, calculated daily until paid in full.
Q3: Is there a limit to cash withdrawal on credit cards?
Yes. Issuers cap the cash limit as a portion of your overall credit limit. For example, HDFC commonly shows up to 40% of the credit limit as cash limit for eligible variants.
Q4: Do cash advances have a grace period?
No. Issuers disclose free credit period = Nil on cash advances and interest starts from the transaction date.
Q5: How can I avoid cash advance fees?
Use UPI or debit for cash needs, plan expenses, or consider a short personal loan instead of withdrawing with a credit card.
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