One of the things that can be done when having a credit card is to make cash withdrawals. This method can be done for those who need cash in an emergency. To find out more about credit card cash withdrawals, let’s look at the following points:
Definition of Cash Advance
This transaction is one way to get cash using a credit card. Credit card owners can use their cards through an ATM machine and withdraw some money. The process is more or less like withdrawing money with a debit card, so the owner of the card just needs to insert the card into the machine and enter his credit card PIN. Later, the card owner can choose the nominal amount of funds he wants to withdraw from his credit card.
Fees and Rules for Cash Withdrawals
In contrast to the illegal practice of cash friction which allows users to withdraw money until the credit card limit is used up, cash withdrawals tend to be more organized. The owner of the card cannot withdraw cash, there is a limit for taking cash. Although each issuing bank has different conditions, this limit can reach 60% of the credit card limit that you have.
Furthermore, cash withdrawal transactions from credit cards through this ATM will also be charged. Generally, the fees charged are 4% of the nominal you withdraw or at least Rp 50,000, – Not a credit card if the name is not subject to interest, so if you do not pay off arrears immediately when the bill is printed, you will be charged interest (currently bank interest rates are still at 2.95%). Here’s the illustration:
- Credit card limit: IDR 10,000,000
- Maximum limit for credit card cash withdrawals, for example 60% x IDR 10,000,000 = IDR 6000,000
- A conducts cash withdrawal transactions of IDR 2,000,000
- Cash withdrawal fee of 4% x Rp.2,000,000, – = Rp80,000, – So the total amount charged when printed credit card bills is Rp2,080,000, –
- If A makes a delay of one month, the bank will charge interest of 2.95% on the bill, so the payment must be IDR 2,000,000 + IDR 80,000 (2.95% x IDR 2,000,000) = Rp.2,139,000,
So, Can Cash Pull Transactions Become a Way Out?
Given the costs incurred as well as the accumulation of credit card interest rates which are also high, it is indeed a good idea if cash withdrawals are carried out during an emergency. This transaction is best done if you do have urgent needs in the form of cash only. Remember again that delinquency in paying can charge interest on your bills, so make sure you can directly pay the obligation when the credit card billing statement has been sent to you.
If you really need cash, you can use a savings account or emergency fund provided. But if this method still does not provide a solution, you can ask for help from your immediate family. Even so, remember to remain responsible and return the borrowed funds.