How to withdraw money from a credit card

In the last 10 to 15 years, credit cards have become a widespread and even commonplace phenomenon. There are many times more credit cards than any other type of bank loan. Credit cards are paid for almost as often as debit cards. More and more payroll and other charge cards get credit.

Therefore, there is no need to explain what a credit card is and what it is for, but it will still be useful to recall some of the nuances of using such a product.

Features of credit cards

Credit cards almost always offer a revolving credit (overdraft). In this case, a certain amount of cash or non-cash money is not issued, as in a classic loan, but the cardholder gets the opportunity to spend money from the card account within the assigned limit. The funds received should then be returned to the bank. After crediting the card account, this money can be borrowed from the bank again, then returned to the bank again, and so on.

The amount you can spend on a credit card is called a credit limit. The principal difference is that the money available for withdrawal on a credit card belongs to the bank and not to the recipient of the credit.

  • Withdrawing money on a debit card can be compared to returning a bank deposit.
  • A credit card withdrawal is essentially the same as taking out a cash loan.

This is why banks usually impose significantly more restrictions on receiving money from a credit card as compared to a debit card.

One more important point is that banks actively encourage credit card payments. Besides direct benefit of non-cash payments for credit institutions as there is no withdrawal of funds from interbank turnover, banks cooperate with sellers of goods and services. There are special conditions which make payments by cards especially advantageous. But withdrawing cash from credit cards is in no way remunerated, and sometimes it is even forbidden. There is an explanation for this as well; banks benefit from acquiring, i.e. sellers of goods and services pay a percentage of card payments to banks. There are joint programs of banks and sellers. When paying by credit card, there is confidence in the direction of payments, but the movement of cash is not traceable in any way.

All this leads to the fact that it is more difficult and usually more expensive to get cash from a credit card than from cards holding customers’ own money.

How do I withdraw cash from a credit card?

Withdrawing money from a credit card is about the same as with all other cards. However, much depends on the type of card and the terms of the contract. The general trends are as follows:

  • With installment cards, you usually can’t withdraw money. Because it’s not really an installment plan, but an interest-free bank loan, the interest on which is paid not by the cardholder, but by the retailer who uses the card.
  • With cards with an interest-free period cash withdrawals are allowed, but the interest charge may no longer be preferential and may start immediately after withdrawal.
  • Credit cards that don’t focus on purchases from certain merchants have fewer barriers to cash withdrawals. It’s easy to withdraw cash from credit cards issued as part of payroll projects.

These are all non-binding rules, but common patterns. They’re worth considering when figuring out if you can withdraw cash from a credit card, and what it costs.