Key takeaways

  • On most cards, ATM cash withdrawals get no interest-free period: interest starts from the day you withdraw. IDFC FIRST is the main exception.
  • Banks levy an upfront Cash Advance Fee of 2.5% to 3% of the withdrawn amount (minimum ₹300 to ₹500) plus 18% GST.
  • Interest rates on cash advances range from 3.5% to 3.75% per month (42% to 45% per annum), compounded monthly until fully settled.
  • IDFC FIRST Bank charges a flat ₹199 + GST per withdrawal and gives up to 48 interest-free days on cash, according to its card pages.

Inserting your credit card into an ATM to withdraw physical cash is the single most expensive transaction you can ever make in consumer banking. While banks provide a Cash Limit (usually 10% to 20% of your total credit limit) and market it as an emergency facility, the underlying fee structure is brutal.

Unlike purchases, which get an interest-free period of up to about 50 days, ATM cash withdrawals on most cards incur an immediate fee and interest from the day of withdrawal. IDFC FIRST Bank is a notable exception (see the table).

The 4 Compounding Costs of an ATM Cash Withdrawal

When you withdraw cash using a credit card, you are hit with four separate financial penalties:

  1. Upfront Cash Advance Transaction Fee: Banks charge 2.5% to 3.5% of the withdrawn amount, subject to a strict minimum charge of ₹300 to ₹500 per withdrawal.
  2. 18% GST on the Cash Advance Fee: An unrefundable 18% GST is added immediately to the cash fee.
  3. Daily Compounding Finance Charges (Interest): Interest starts accruing from Day 1 at rates of 3.50% to 3.75% per month (42% to 45% p.a.) until the entire balance is repaid in full.
  4. 18% GST on Accumulated Interest: Every month, an additional 18% GST is levied on the total interest charged on your statement.

Bank-by-Bank Cash Advance Fee Comparison (2026)

BankCash Advance FeeMinimum FeeMonthly Interest RateAnnualized Interest Rate
HDFC Bank2.5% of amount₹500 + 18% GST3.60% – 3.75%43.2% – 45.0% p.a.
SBI Card2.5% of amount₹500 + 18% GST3.50% – 3.75%42.0% – 45.0% p.a.
ICICI Bank2.5% of amount₹500 + 18% GST3.50% – 3.75%42.0% – 45.0% p.a.
Axis Bank2.5% of amount₹500 + 18% GST3.60% – 3.75%43.2% – 45.0% p.a.
Kotak Mahindra2.5% of amount₹500 + 18% GST3.50% – 3.75%42.0% – 45.0% p.a.
IDFC FIRST BankFlat ₹199₹199 + 18% GSTInterest-free for up to 48 days, then card rateVaries by card

Worked Example: What Withdrawing ₹10,000 and ₹25,000 Really Costs

Assume you withdraw cash from an ATM and clear your credit card statement 30 days later:

Case 1: Withdrawing ₹10,000 for 30 Days

  • Cash Advance Fee (2.5% or min ₹500): ₹500
  • 18% GST on Fee: ₹90
  • Interest for 30 Days (at 3.75% / month): ₹375
  • 18% GST on Interest: ₹67.50
  • Total Charges Paid: ₹1,032.50 (Over 10.3% cost for 30 days!)

Case 2: Withdrawing ₹25,000 for 30 Days

  • Cash Advance Fee (2.5% of ₹25,000): ₹625
  • 18% GST on Fee: ₹112.50
  • Interest for 30 Days (at 3.75% / month): ₹937.50
  • 18% GST on Interest: ₹168.75
  • Total Charges Paid: ₹1,843.75

How to Turn Off ATM Cash Withdrawals on Your Card (Security Fix)

Under RBI's card security directives, every cardholder has complete control over transaction channels. Because ATM cash advances carry massive fees and pose fraud risks if your card is stolen or cloned, we strongly advise turning OFF ATM transactions completely:

  1. Open your bank's mobile app (HDFC PayZapp/MyCards, SBI Card App, ICICI iMobile, Axis Open).
  2. Navigate to Card Controls / Manage Limits.
  3. Find the "ATM Cash Withdrawal" toggle switch and turn it OFF (both for Domestic and International).
  4. Save the setting with OTP confirmation. This ensures no unauthorized cash withdrawals can ever occur on your card.

Why Cash Advances Destroy Your Credit Profile

While an ATM cash withdrawal does not show up as a "negative default" on your CIBIL report, automated bank underwriting algorithms flag frequent cash advances as a severe indicator of acute financial distress. If you withdraw cash from your credit card, your chances of getting approved for credit limit increases, new premium cards, or home loans decrease sharply for the subsequent 6 to 12 months.

3 Safe Alternatives to Credit Card ATM Withdrawals

  1. Pre-Approved Personal Loan on Credit Card (Insta Loan): Many banks offer pre-approved loans on your credit card, credited to your bank account and repaid in EMIs. Rates are usually far lower than cash advance interest, but check the rate and processing fee in your offer.
  2. UPI Overdraft / Digital Credit Line: Instant overdraft facilities against fixed deposits or digital credit lines charge a fraction of credit card cash rates.
  3. Debit Card ATM Withdrawal: Always use your standard savings debit card for physical cash needs.

Read our full guide on cash advance vs instant card loans and hidden credit card charges.

FAQs

Can I withdraw cash from a credit card without paying any charges?

No. Every bank charges a cash advance fee. IDFC FIRST Bank has one of the lowest, at ₹199 + GST per withdrawal, and gives up to 48 interest-free days, but the fee still applies.

Can I pay credit card cash advance dues immediately to stop interest?

Yes. If you must withdraw cash in an emergency, log into your banking app and pay off the entire cash balance on the same day or within 24 hours. This limits the interest charge to a single day (though the ₹500 fee + GST still applies).

Does withdrawing cash abroad on a credit card cost more?

Yes. Overseas ATM withdrawals incur the Cash Advance Fee (2.5%), day-one interest, the local foreign ATM operator fee, and a 3.5% foreign exchange markup plus GST.

Can I withdraw cash using UPI linked to a RuPay credit card?

No. NPCI and RBI guidelines strictly prohibit cash withdrawals and peer-to-peer (P2P) fund transfers using RuPay credit cards on UPI. They can only be used for merchant (P2M) purchases.

Sources

About the author

Deepak

Founder & Editor, CardPicker

Deepak founded CardPicker and writes and fact-checks its credit card guides, comparisons and news.

✓ Fact-checked 28 September 2026Prices, dates and card terms in this article were checked against issuer websites, official pages and news reports listed under Sources. Card figures come from our database, which is re-verified regularly. Offers change often, so confirm on the issuer's site before you buy or apply. Spotted an error? Tell us.