A credit card, when used correctly, can be an almost free product. However, costs may arise if, for example, you do not pay off your debt within an interest-free period or transfer money from your card account. Withdrawing money with a credit card at an ATM will also cost you dear.
A credit card is a very useful product, but you need to know how to use it. Withdrawing money from an ATM using a credit card is not a free service. Banks, if we do not have a prestigious (and expensive) VIP card, will charge you a commission.
Banks consider credit cards as a tool designed mainly for non-cash transactions, so customers must pay for borrowed money in a different way than non-cash.
The size of the commission is determined by each bank individually. Let’s assume that this is on average about 3-4 percent of the value of cash withdrawn from an ATM. Although the commission depends on the withdrawal amount, banks also set a minimum commission that will be charged for using the card.
However, the high fees associated with cash withdrawal fees are not all costs. Banks do not treat credit card withdrawals as a non-cash transaction, which means that from the first day after withdrawing money, they will charge interest on the amount withdrawn from the ATM.
Banks stipulate in their contracts that the grace period, that is, the interest-free period, does not apply to cash transactions made with a credit card. The interest due will be charged for cash withdrawals from the ATM before the date of full repayment of the debt.
For example, if the interest rate is 10% per annum and the amount paid is 500 rubles, the interest received daily will be 0.14 rubles. It may seem like a small amount to you, but after 10 days it will be 1.40 rubles, and after 100 days it will be 14.00 rubles.
Credit card – can I withdraw cash from the bank?
The essence of having a credit card is the cashless payment option that will make your shopping easier. What if you need cash? In case of emergency, you can withdraw them at an ATM or at the bank’s cash desk, but you must take into account the high commission.
Along with the statement that every product must be profitable, banks provide fees for ATM withdrawals using a credit card. While your bank may charge a fee on the amount withdrawn from an ATM machine, you may also be charged a fee for making transactions.
The commission is charged from the moment of the transaction until the full payment of the invoice. Therefore, when withdrawing cash from a credit card, you should seriously consider whether you need this transaction.
