Think Before You Swipe Credit Card Offers For Cash

1
Think Before You Swipe Credit Card Offers For Cash
2

• What's the worst thing to do with your credit
  card? Use it to withdraw cash from the ATM, says
  a financial expert. In your monthly credit card
  statement, there is a mention of cash limit. That
  is the extent to which one could withdraw cash
  using a credit card. But the googly is the
  interest rates. It's actually a very expensive
  proposition to withdraw cash as the interest
  rates on such withdrawals fall in the range of
  40 on an annual basis.

3

• Usually, the credit card Offers company mentions
  the interest rate as a percentage per month which
  typically varies from 2.7-2.85 per month. And
  since this interest is compounded monthly, the
  effective annual rate of interest tends to be
  anywhere from 38 to 40 per annum.

4

• Essentially, credit card companies charge the
  same interest rates for cash withdrawals made
  through credit cards and for rolling over credit
  card balances. But if one pays the entire amount
  on due date, one gets around 30-45 days of
  interest free credit. But what is important to
  know is that rule doesn't apply in case of cash
  withdrawals the credit card company levies the
  interest rate the moment you withdraw the cash.

5

• Cash withdrawals can also attract an additional
  withdrawal fee. This charge falls in the range of
  3-3.5 of the withdrawn amount. That will be
  added along with the interest rate to your bill.
  Therefore, unless you have emergency needs, do
  not withdraw cash on your credit card. The better
  option though is to go for a personal loan.

6

• Credit card cash withdrawals vs personal loan
• Personal loan is a better option as the average
  interest rate on personal loans is between 15-20
  per annum. The only handicap however, is that it
  takes around 7-10 working days for the banks to
  process personal loans.
• For the uninitiated, every credit card Offers
  statement has a billing date. For example, if
  your credit card payment is due on March 15 then
  the bill would have been dated around February
  27.
• So if you purchase anything on February 28 or
  later, that payment would be due only on April
  15. So you get some time to cough up that money
  to pay off the dues. If you are unable to pay the
  outstanding amount, then the credit card company
  charges a month rate of 2.95 of the total
  amount. But this breather doesn't exist on these
  cash withdrawals.

7
Source http//articles.economictimes.indiatimes.c
om/2008-03-12/news/27731274_1_interest-free-credit
-credit-card-cash-withdrawals
http//www.facebook.com/idbibank
https//plus.google.com/IDBIBank
https//in.linkedin.com/company/idbi-bank
http//www.twitter.com/idbi_bank
http//www.youtube.com/idbibank

• Thank You!