In today's era credit cards have become an essential part of a person's wallet. They not only help us to make cashless purchases with third parties but also enable us to take out cash. Withdrawing cash through credit cards is a very convenient option in an emergency but it turns out be very costly if it is not repaid back quickly.
The transactions that one makes through a credit card are billed on a certain date of every month and are listed in a credit card statement that is sent by the issuer to the cardholder on a monthly basis. This credit card bill has a certain due date by which the cardholder is expected to pay the minimum due or total outstanding. The due date is generally a date after 21 days of the billing date and the period between the two dates - billing date and due date - is called the credit free period. But if the total outstanding amount is not paid after the completion of the credit free period, an interest rate is charged on the amount that is outstanding by the cardholder.
However the story is different in case of cash withdrawal through credit cards. There is no credit free period that a cardholder can enjoy if he takes out cash using his credit card. In such a case, an interest starts accumulating immediately after the day in which the transaction is made.
Moreover a charge is levied on card holder for withdrawing cash through his credit card. This charge differs from company to company and also depends on the type of the credit card. Normally the banks charge around 2.75% to 3% per month on the withdrawal amount as the fee for providing this facility.