Cash Limit & Withdrawal Charge as on Credit Cards in India: Updated for 2025
Introduction
In today’s digital era, everyone must have one or two credit cards. But not everyone knows what the rules and charges are for withdrawing cash from a credit card. And whether it is safe to withdraw cash from a credit card or not.
So today we will know about the cash limit and withdrawal charges of a credit card. In 2025, banks and credit card companies are working with new rules, new charges, and updated policies. In this article, we will know:
What is the cash limit of a credit card?
How much charge is levied for cash withdrawal, and
What things should you keep in mind?
What is a Cash Limit?
Cash limit means the maximum amount you can withdraw from an ATM or bank using your credit card. Just like you withdraw money using your debit cards, the maximum amount you can withdraw using your credit card is called cash limit.
Example: If the total limit of your credit card is ₹1,00,000, then its cash limit can be ₹20,000. That means you can spend up to ₹ 1 lakh in purchases, but you will only get ₹ 20,000 to withdraw cash. Because the credit card companies have set a cash limit, we cannot withdraw more cash than the set cash limit.
Note: Cash limit is only a small part of the total limit. Every bank decides this limit on the basis of the user’s credit score, salary and usage history as to what should be the cash limit of the user. Then the credit card companies give the user his cash limit and the user cannot withdraw more cash than the cash limit from the ATM.
Why is there a cash limit on credit cards?
Banks impose cash limit because:
1. Risk Control: Cash withdrawal is risky. It increases the chance of misuse.
2. High Interest Income: Banks charge more interest on cash withdrawal than normal purchase.
3. Responsible Use: By keeping a limit, the user withdraws cash after thinking and only when he has a dire need of cash.
Cash Withdrawal Charges in 2025
Not only money is deducted when you withdraw cash from a credit card, but hidden charges are also levied. Let us understand this in one way:
1. Cash Advance Fee
This is a flat percentage fee (e.g. 2.5%).
Example: If you withdraw ₹10,000 cash from an ATM, you will have to pay ₹250 extra.
2. High Interest Charges
Interest is charged immediately on cash advance, without any grace period.
This rate is higher than the interest on purchases, e.g. 36–48% per annum.
3. ATM Charges
If you withdraw cash from a non-network ATM, you may be charged ₹20 to ₹100.
4. Foreign Withdrawal Charges
If you withdraw money from a foreign ATM, up to 3% foreign transaction fee + currency conversion charge is charged.
Example Scenario.
Cash withdrawal charges in India can easily add up like this example. Here is a scenario with ₹20,000 credit card cash limit and you swipe it :
A Real-Life Example:
You have an ICICI Bank credit card with:
Cash limit: ₹20,000
Cash advance fee: 2.5%
Interest rate: 3.5% monthly
ATM fee: ₹50
If you withdraw ₹10,000 cash:
Charge Type Amount
Cash Advance Fee (2.5%) ₹250
Interest (1 month) ₹350
ATM Fee ₹50
Total Extra Cost ₹650
The total amount of your extra cost and your withdrawal amount will be ₹10650 which is quite a lot.
This exemplifies very quickly how fees stack up when you use your credit card for cash.
2025 Upcoming Changes Nationwide in the Banking Sector
The latest developments in the Indian Banking sector (2025) have certainly impacted the credit card holders being a part of this banking sector. Here are few updates:
1. More Digitally Enhanced Banking Experience
Many banks, aided by the rise of fintech and digital banking, are now adding an upgrade to your credit card (mobile apps.) Mobile apps show dynamic cash limit, transaction history, and even the fees of cash withdrawal in real-time. That transparency allows users the choice on how their credit card is used.
2. Cash Limits that change
The banking world is experimenting with cash limits that vary depending on the spending habits of the individual. Say, for example, that you always pay your credit card bill on time, your cash limit may be automatically increased. We hope that this initiative will reward behaviour so responsible behavior and get people to do the right financial things.
3. Initials: streamlined, with no eating withdrawals
Some banks are starting to offer credit cards that have cashback without fee, but only if cash is taken from affiliated ATMs as part of the deal in order to attract more customers.
This is particularly advantageous to those who only occasionally need cash access and do not want to pay a premium.
4. Financial Literacy Initiatives
Most Banks have awareness campaigns to educate their customers on the consequences of cash withdrawal because in them also
The cash limit. These aims are to provide the consumer with sufficient information for making his or her financial behavior and credit usage appropriate
5. Regulatory Changes
The Reserve Bank of India (RBI) has also intervened in the credit card arena to safeguard consumer protection. The RBI has brought out new guidelines that would promote fee disclosure, and banks have been instructed to provide complete details of all fees charged for cash withdrawal prior to the margin. This step in particular is to stop any surprise hidden fees and charges that can happen to consumers.
Ideas to Handle Withdrawal Charges and Cash Limits
You need to be aware of your cash limit and related charges if you are a credit card user in order to maintain a healthy financial balance. So here are a few tips to help you manage these aspects properly:
1. Know Your Limits
Keep yourself in check on what you carry and your credit. Do a daily check on your credit card bills, mobile banking app for any changes to the amount when using the limit.
2. Limit Cash Withdrawal Usage
It is better not to use a credit card for cash, think twice before you avail this option generally available at most of credit card holders and limit its use only in rare situations.
In other words, you are better off putting a 100+10 fee into a debit card or personal loan that usually have much cheaper fees and APRs.
3. Let us know the fee structure
Before you fumble to find a cash advance visa card and make that withdrawal, know the associated fees of your credit card. With cash advance fees, ATM fees, and interest rates, you will be able to make the right decisions.
4. Budget
A lot of the time, if you find yourself needing cash often, maybe it s time to rethink your budgeting methods. Decide a monthly cash budget for cash expenses and never ever exceed it. It’ll save you from leverage on credit after that.
5. Make sure to clear all withdrawals early.
If you have to withdraw cash, pay off the whole balance immediately to save on interest charges. Interest on cash advances is charged immediately, so repayment of your debt should be timely so as not to incur hefty costs.
6. Credit Card Offers
Pay attention and watch credit card deals that offer lower withdrawal charges or better cash rewards. Banks often offer just the right promotional offers, which can save you substantially from time to time.
7. Be Smart with ATMS
Let the use of ATMs belonging to your network when taking cash to avoid a dual cost charge. Before you go on the road, try to look up some ATM locations to get cash at places without extra costs
Tips to Avoid Heavy Charges
Withdraw cash only in emergency
Check the statement every time before due date
Set auto-debit so that late fees are not charged
Try to pay full bill, avoid the minimum due
My opinion
My opinion is that we should only take a cash limit on our credit card if there is a huge need or in case of any emergency, because the cash limit is less than our total limit, and the interest and charges are also very high. That is why we should only withdraw cash from our credit card if there is a huge need or in case of an emergency.
Conclusion.
Every Indian credit card holder should have a basic understanding of cash limits and withdrawal cost as such. The more you drift through the end of 2025 anyway, the better to keep up with new changes in this sector i.e. banking industry can you enable you for better financial judgements. Being able to control cash limits as well the charges that come with this, you can prevent unnecessary payment and stay on good terms with your credit.
For both the banking and new to the credit world, this will provide you an insight to help you out in dealing with Cash Limit and withdrawal charges. As Always responsible credit card usage is your high way to financial freedom and success. Post more update and tips, only at your credbins.com
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