Key takeaways

  • Cash advances cost about 2.5% (minimum ₹300–₹500) plus 18% GST.
  • Interest starts on the day you withdraw. There's no interest-free period.
  • A ₹20,000 withdrawal repaid after 30 days can cost around ₹1,400.
  • Cash withdrawals earn no rewards and can make lenders see you as credit-stressed.

Your credit card can withdraw cash at an ATM, but it's one of the most expensive ways to borrow in India. Here's exactly what it costs, and what to do instead.

The charges

1. Cash advance fee

  • HDFC Bank: 2.5% of the amount or ₹500, whichever is higher.
  • SBI Card: 2.5% or ₹500, whichever is higher.
  • ICICI Bank: 2.5% or ₹300, whichever is higher, on most cards.
  • Axis Bank: 2.5%, minimum ₹500 (for example on Axis SELECT).

Plus 18% GST on the fee. Some premium cards charge less. Check your card's MITC.

2. Interest from day one

Purchases get an interest-free period of up to about 50 days. Cash withdrawals don't. Interest, typically 3–3.75% a month (Axis raised its finance charge to 3.75% a month in December 2025), runs from the day you withdraw until you repay in full, plus 18% GST.

3. ATM operator fees

Some ATMs, especially abroad, add their own fee on top.

Worked example: ₹20,000 withdrawn, repaid after 30 days

Cash advance fee (2.5%, minimum ₹500)₹500
GST on fee (18%)₹90
Interest for 30 days at 3.75% a month₹750
GST on interest (18%)₹135
Total cost₹1,475

That's about 7.4% for one month's borrowing, equivalent to an annual rate far above any personal loan. And if you only pay the minimum due, the interest keeps compounding.

Other downsides

  • No rewards. Cash withdrawals earn no points or cashback on any card we track.
  • Lower limit. Your cash limit is usually a fraction of your credit limit, often around 20–40%.
  • Payment allocation. Payments are generally allocated to balances in a set order, so the expensive cash balance may take longer to clear if you also have purchases outstanding.
  • Credit perception. Frequent cash advances can signal financial stress to lenders reviewing your report.

Better alternatives

  1. UPI or a debit card from your savings account, if you have funds.
  2. Pay the merchant by card directly. Many places that "need cash" accept cards or UPI.
  3. Pre-approved personal loan or loan on card. Many banks offer these at lower rates than cash advances. Compare the total cost.
  4. EMI conversion on a large purchase instead of withdrawing cash to pay for it.
  5. Abroad: use a forex card or a zero-forex debit card for ATM withdrawals. See our forex card vs credit card guide.

If you've already withdrawn cash

  • Repay it as fast as possible, ideally before your statement date, to limit interest.
  • Pay more than the minimum due. The minimum barely covers the interest.
  • Check your statement for the fee, interest and GST, and raise any errors with the bank.

Is it ever worth it?

Only as a genuine short-term emergency option when nothing else is available, and repaid within days. For anything longer, a personal loan or EMI is almost always cheaper. Model your repayment with our credit card interest calculator.

Cash withdrawal abroad: even more expensive

Withdrawing foreign currency at an overseas ATM with an Indian credit card stacks three costs: the cash advance fee (about 2.5%, minimum ₹300–₹500), interest from day one, and the forex markup of up to 3.5% plus GST. Many overseas ATMs add their own fee on top. In Thailand, for example, most ATMs charge foreign cards around 220–350 baht per withdrawal. A forex card or a zero-forex debit card is almost always cheaper for cash abroad.

How cash advances appear on your statement

Your statement shows the withdrawal as a separate "cash" transaction, the cash advance fee as a charge, GST on the fee, and interest (finance charges) from the transaction date, plus GST on the interest. If you see interest on purchases too, it usually means the balance wasn't paid in full. Once you carry a balance, new purchases also start attracting interest from the day you make them, until the whole balance is cleared.

Quick comparison: ₹20,000 for one month

  • Credit card cash advance: around ₹1,400 including GST, as calculated above.
  • Personal loan at 14% a year: roughly ₹230 in interest for one month, though processing fees apply and loans usually have minimum tenures.
  • UPI from savings: ₹0.

FAQs

Is there an interest-free period on credit card cash withdrawals?

No. Interest is charged from the day of withdrawal until you repay, unlike purchases.

How much can I withdraw from my credit card?

Up to your cash limit, shown on your statement. It's usually a fraction of your total credit limit.

Does cash withdrawal affect my credit score?

Not directly, but it increases your balance and utilization, and frequent cash advances may worry lenders.

Is transferring money from a credit card to a bank account a cash advance?

Usually yes. Banks treat most money transfers from a credit card like cash advances, with a fee and interest from day one.

Can I withdraw cash from a credit card using UPI?

Some RuPay credit cards linked to UPI allow merchant payments, but cash withdrawals and person-to-person transfers from credit cards generally aren't allowed, or are treated as cash advances. Check your bank's rules.

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 26 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.