Introduction of credit cards to the financial market has revolutionized how people avail and use additional financing. Among the acclaimed features that these financial tools bring, the credit card cash withdrawal facility provides a cardholder with instant liquidity in case they are short of finance. One may get a credit card only when a person meets all the eligibility criteria required.
Users also need to pay credit card cash withdrawal charges when availing this facility. These charges are of two types, processing fee and interest. As for the processing fees, they are flat, one-time charges applicable on the amount you withdraw. Cards such as the Bajaj Finserv RBL Bank SuperCard attract a minimal processing fee of 2.5% on this withdrawal.
Additional Read: How to Get Credit Card
In case of interest charge, the rate of interest applicable to this withdrawal and its calculation depends on the card issuer’s policy. Before withdrawing the amount, you should thus learn how to calculate these charges so that you know the amount payable.
To compute the processing fee, calculate its applicable rate on the amount withdrawn. As for interest calculation, you must know the interest rate your card issuer charges as well as the frequency of calculation, i.e., daily or weekly. Calculation of interest rate is similar to that of the processing fee. Only that, here the factor of daily or weekly calculation is included.
Use these calculations to know the amount you would be required to pay as processing fees as well as interest payable. You may look forward to cards that give an interest-free period of up to 50 days. It provides you with a considerable duration whereby you can arrange for finances to repay while making the most of this withdrawn amount.