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Credit Cards Are Often Used Withdraw Cash? This is the result!

Credit Cards Are Often Used Withdraw Cash? This is the result!Credit Cards Are Often Used Withdraw Cash? This is the result!

Withdrawing credit card cash is often a ninja way to cover impromptu expenses when you can’t increase your income.

But, did you know that this is actually dangerous? Don’t get trapped, check out the information in the following Finansialku article.


  • Credit cards have a cash withdrawal facility called a cash advance.
  • This facility will incur cash withdrawal fees and interest.
  • If it is done too often, it will increase expenses, potentially bad credit, and make cash flow messy.

Be Careful When Withdrawing Credit Card Cash

My Financial Friend, what will you do when there are sudden expenses almost every month without an emergency fund and additional income?

Not least, the ninja way to do is to withdraw credit card cash.

Well, is it really possible?

Yup, the term is cash advance, which is a cash withdrawal facility from a credit card. The process is the same as withdrawing money at an ATM machine.

The difference is, if you withdraw cash with an ATM card, your savings balance will decrease. While withdrawing cash from a credit card, the amount of your debt or bill will increase.

Generally, the amount that can be withdrawn in cash is around 40-60% of the available credit limit. Almost the same as a loan from a bank.

This method can be quite helpful, especially when your payday pays all bills in full.

But, is the problem immediately solved? The answer is, not necessarily. Look at the following illustration.

Credit Card Cash Withdrawal Illustration

Reconsider when going to make a cash advance, because it can make finances messy. We discuss the following illustration:

  • Income of $488.23 every month runs out without remainder and does not have an emergency fund.
  • Sudden expenses $139.49
  • Withdraw cash from credit card $139.49
  • Credit card bill from cash withdrawal $148.21 (inc. fees and interest)
  • When payday pays off the bill, it’s $148.21

Trouble will start from here!

Imagine, with an income of $488.23 there is never any leftover, meaning that the expenses are the same. So in reality there is no budget to pay the bill.

When forced to pay the bill in full to avoid interest, the expenses add up:

$488.23 + $148.21 = $636.44

This means that there will be additional expenses of $148.21 in the following month. In fact, it was higher than the previous total of $139.49.

If this condition becomes a recurring habit, the effect is like a snowball where the bill is getting bigger.

So what if you don’t pay the bill in full?

The bill will continue to roll because there are fees and interest from the remaining bill.


Credit Card Cash Withdrawal Fee

When using this facility, of course it is not free. There are fees that must be paid in addition to the rupiah value taken in cash, including:

#1 Flowers

Similar to other forms of loans, cash withdrawals from credit cards will be accompanied by the interest that must be paid by the user.

The amount differs from each credit card issuing company, starting from 2.25% per month. The calculation starts from the bookkeeping date of the cash withdrawal transaction until the date the payment is made in full.

#2 Cost

Every time you make a transaction, there will be an additional fee. Generally, credit card issuers charge around 3-6% per transaction or there is a predetermined minimum value, whichever is higher.

Each issuer can set different rules, generally starting from $3.48 per transaction.

Due to Frequent Credit Card Cash Withdrawals

Learning from the illustration of the case at the beginning, it can be seen that credit card cash withdrawals are not always the solution. On the other hand, there is a lurking danger.

Here are some of the consequences:

#1 Stacked Costs

Already exposed to interest, there are still fees from each transaction. If you don’t pay the bill in full, there will be daily interest. If you are late paying, a late fee will be charged.

#2 Bad Credit

Even though it’s easy to do, if you can’t pay off the bill, then get ready to face payments that are not smooth.

This will affect your credit status to be bad and be blacklisted by Bank Indonesia.

#3 Messy Cash Flow

It is not impossible that your financial cash flow will fall apart if you continue to use this facility.

Because the expense will increase from credit card bills. Especially if your income turns out to be a minus after deducting expenses.

Tips for Avoiding Credit Card Cash Withdrawals

My financial friends, as much as possible avoid the habit of withdrawing cash from credit cards. There’s nothing wrong, you try some of the following tips:

#1 Fix Cash Flow

With a measurable cash flow, your income can be used optimally because the goal is clear.

So you can avoid spending that is greater than your income.

Come on, fix and rearrange your financial cash flow. financial has a video that might be of use to you.

#2 Preparing an Emergency Fund

Even though financial cash flow looks safe, without an emergency fund, the originally ideal condition could be messy. Especially if you need large funds in a state of urgency.

So, prepare your emergency fund as soon as possible, OK!

#3 If you are forced to withdraw cash, make sure there are funds to pay off

If there is no other choice, you should first calculate the costs to be paid.

Then make sure you get the funds to pay off the bill in full. If you are not sure, it is better to look for other alternative solutions.

#4 Limit Limits According to Ability

The way to adjust the credit card limit to your ability is to see how much emergency funds you already have.

Keep the limit smaller than the emergency fund. So, when you are forced to withdraw cash, you can pay off the bill without disturbing the cash flow in the following month.

Credit Cards Don’t Make It Difficult!

My financial friends, although this sick card can fulfill various needs, using this facility too often can be dangerous.

Don’t let credit cards complicate your finances. Better, rearrange finances properly to avoid various other problems.

You can use my Financial Application. With the various features available, it will be easier to record and budget finances.

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