The credit card withdrawal works as a loan to the bank. And like any loan, an interest rate will be charged. Interest rates for credit card withdrawals are very high, so using this withdrawal method requires great care.
Credit card withdrawals work like: loan a money you do not have into account. That is, by doing so you will be subject to bank fees, which can be very expensive.
How does credit card withdrawal work?
If you have no cash and need to make some cash payments, you can use a credit card withdrawal. To do this, simply go to an ATM and select the credit card withdrawal option. It works as a type of pre-approved loan that needs to respect your withdrawal limit.
However, unlike the debit card, where the amount of the action is settled at the time of transaction, the credit will only be charged on the day of payment of the invoice, which was previously chosen by the customer himself.
In the payment of the invoice, in addition to the amount of your withdrawal, will be added to the withdrawal fee and interest.
How much does it cost?
The amount charged will depend on the financial institution that will grant the loan. Here’s how this value may vary:
- Card 1: No withdrawal fees; interest rates up to 14% per month; IOF: 6.38%;
- Card 2: Fare of $ 10.00; withdrawal rates ranging from 10.80% to 17.99%; up to 9.89%.
There are different prices and different charging models for this type of transaction. Consult your bank and study which options are best before resorting to this feature.
Is it worth to withdraw with the credit card?
Like any type of loan, interest is charged on your debt. However, interest on credit card withdrawal they are the highest in the market, along with interest on revolving credit card and overdraft. Withdrawal interest easily exceeds at least 10% per month. These fees are so abusive especially because of the ease that the loan is granted. It is pre-approved and can be done directly at an ATM. In addition to interest, withdrawal fees may apply, which do not depend on the amount withdrawn.
If you have a red card and really need a loan, there are other ways that charge more affordable fees that can help you pay off your obligations without causing more expensive debt in the future.
- Secured loan
- Payroll loans
- Anticipation of the 13th salary
- Seizure of property
- Anticipation of income tax
Therefore, because of the high prices, credit card withdrawal should be the last resort sought in case of urgency and real need. Get organized and build a financial plan that will help you pay off debt, live in a way that is compatible with your financial reality.