All About Credit Card Cash Withdrawal in UAE - Everyone Should Know

An Overview of Credit Card Cash Withdrawal in UAE

credit card cash withdrawal is a service that you can use to get cash from an ATM or bank counter using your card, not a debit or savings account. This service is available in the UAE only on cards that are enabled for cash advances. Furthermore, you need to enter the correct PIN or banking credentials. 

Cash advance from credit cards, unlike regular card purchases, usually doesn’t have a grace period. In plain terms, this means that interest starts accumulating right away from the moment you make the withdrawal.

How Do Credit Card Cash Withdrawals Work in the UAE?

In the UAE, you can get cash advance using credit cards through a series of steps. The procedure is defined as per the bank’s card terms and cash advance rules. Here are the general steps for the same — 

1. You, the cardholder, withdraw cash using an ATM or bank counter. You put in the card, type in the PIN or credentials, and choose the cash-advance option.
2. The bank receives the request and hands over the cash. It also adds the amount to the outstanding balance and lowers the available credit limit in the same manner.
3. A cash advance from credit card is considered a short-term loan. Hence, the rules for fees and repayment are different from account withdrawals. 

Cash Advance Limit vs. Regular Credit Limit

The above section resolved the query of those wondering ‘how can I withdraw money from credit card’. Let’s now move a step ahead and understand some key differences.  

In the case of cash advances, the limits are different in the UAE. Banks set a limit for cash withdrawals separately — this limit is generally lower and depends on the specific issuer's guidelines. 

Here are some points to better understand the cash advance limit vs. regular credit limit differences —

1. Regular cards offer cash advances of around 50% of the total credit limit, although the exact percentage may vary as per the card issuer's policy.
2. Premium or business cards typically have a higher percentage. In fact, some issuers allow you to make withdrawal or cash advance using credit card for up to 75% of the total credit limit.
3. Withdrawals and regular purchases together have the same total credit limit. This means the purchase availability is reduced until the amount, fees, and interest are paid back.

Interest and Charges on Credit Card Cash Withdrawals in UAE

In the UAE, a cash advance or a cash withdrawal on a credit card incurs higher costs than regular transactions. This is because the fees and interest start right away. Thus, it’s necessary to understand these charges and avoid paying high charges.

1. Most banks charged the cash advance fee as a percentage or a fixed minimum amount. The minimum amount is usually around AED 99 or AED 103.95, although it could be higher in some cases.
2. As far as the percentage is concerned, it is commonly 3.15% of the cash withdrawn.
3. Interest rates for cash advance from credit cards are usually high.
4. Rates may be shown as monthly or annual charges in the card terms.
5. Late or partial repayment can lead to penalties, higher interest, and a negative impact on credit Score.

Tips to Minimise Fees and Interest on Credit Card Cash Withdrawals

When you withdraw money from credit card, it’s important to know that this service is quite expensive and should be used cautiously. Ideally, you should use it only in emergencies. Here are some tips to help you steer clear of the high charges — 

1. Use cash advances strictly for emergencies or essential needs. For instance, you can use the facility if you need cash in an emergency and are not able to access your account. But if you need cash in regular scenarios, it’s better to get it from your own account. 
2. Review the card’s terms carefully, including the cash-advance fee, applicable interest rate, and repayment rules. This gives you an idea of the costs before making a cash advance from credit card.
3. Consider lower-cost alternatives such as debit cards, savings, loans, or bank overdrafts (whenever available).
4. Avoid frequent withdrawals, as each transaction carries fees and instant interest that can quickly increase total debt.

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