Withdrawing money from a credit card in India usually comes with high costs, including cash advance fees and immediate interest. However, certain cards and alternative methods can help reduce or even avoid these charges under specific conditions. Here’s a comprehensive guide.
Understanding Standard Credit Card Cash Withdrawals
Credit card cash withdrawals (cash advances) are among the most expensive types of transactions. Most Indian banks charge:
- Cash Advance Fee: Typically 2.5% to 3% of the withdrawn amount, or a minimum of ₹250 to ₹500.
- Interest Charges: Start accruing immediately, with no grace period, usually between 30% and 48% annually.
- No Reward Points: Withdrawals don’t earn rewards and may affect your credit score if used repeatedly.
This makes traditional ATM withdrawals using credit cards an expensive option.
Credit Cards That Allow Low or No-Fee Withdrawals
IDFC FIRST Millennia & WOW Credit Cards
These cards allow cash withdrawals with:
- A flat fee of ₹199 + GST per transaction.
- Interest-free period of up to 48 days, if the amount is repaid before the due date.
There is no percentage-based cash advance fee, making it one of the most cost-effective options for withdrawing money from a credit card.
Axis Bank Reserve Credit Card
A high-end premium card that offers:
- Zero cash advance fee.
- Interest still accrues from day one.
- Suitable only for high-income users due to high annual fees and limited availability.
Bajaj Finserv RBL Bank SuperCard
Offers:
- Interest-free cash withdrawal for up to 50 days.
- A fee of 2.5% or ₹500 (whichever is higher).
- Good for short-term liquidity needs if repaid on time.
Alternative Methods to Avoid or Minimize Fees
Using Full-KYC E-Wallets
E-wallets like PayZapp, MobiKwik, and Amazon Pay allow you to:
- Load money using your credit card (small fee, typically ~1–2%).
- Transfer that balance to your bank account.
- Withdraw cash from your account.
Make sure your wallet is fully KYC-compliant to enable bank transfers.
Merchant Swipe or MCC-Based Services
Some fintech platforms (e.g. VedhaPay in Hyderabad) allow:
- Your credit card to be swiped for a retail or travel transaction.
- The equivalent amount transferred to your bank account.
- Typically, they charge a 1.5%–1.8% service fee, which is lower than standard cash advance charges.
This approach avoids cash advance classification but should be used carefully to remain within card issuer terms.
Rent or Bill Overpayment
You can:
- Pay extra on rent or utility bills using your credit card via platforms like Cred or NoBroker.
- Request a refund to your bank account.
These payments are coded as purchases (not cash advances), so they avoid fees and interest. However, overuse may raise red flags with issuers.
Comparison of Low/No-Fee Options
| Method | Fee | Interest-Free Period | Notes |
| IDFC FIRST Millennia/WOW Card | ₹199 + GST per withdrawal | Up to 48 days | Best low-cost option, flat fee |
| Axis Bank Reserve Card | ₹0 cash advance fee | No | Interest applies from Day 1 |
| Bajaj Finserv RBL SuperCard | ₹500 or 2.5% + GST | Up to 50 days | Good if repaid in time |
| E-Wallet with Bank Transfer | ~1–2% | Usually No | Requires full KYC, limits apply |
| VedhaPay / Merchant Swipe Services | ~1.5–1.8% | Yes (coded as purchase) | Region-specific, check legitimacy |
Tips to Avoid Charges Completely
- Use IDFC FIRST cards and repay within the interest-free period.
- Withdraw in a single transaction to avoid multiple flat fees.
- Consider short-term personal loans or BNPL as lower-cost alternatives.
- Avoid withdrawing cash unless absolutely necessary.
Conclusion
While it’s nearly impossible to withdraw cash from a credit card entirely free of cost using traditional methods, select credit cards and digital workarounds can significantly reduce or eliminate those charges. The IDFC FIRST Millennia or WOW cards currently offer the best structured fee model in India. Premium cards like Axis Reserve and wallet-based techniques offer alternatives for more tech-savvy or premium users.
Always check your card’s terms and conditions before attempting a workaround to avoid penalties or account restrictions.
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