In addition to being considered practical and easy to access, the large amount of funds on a credit card is also a stimulus for customers to switch to a credit cash withdrawal system. You must think it is more practical to draw whenever and wherever. However, did you know that this transaction system can actually harm you?
Despite all the advantages offered, this transaction system still imposes various terms and conditions that require customers to comply. For example, interest on cash withdrawals. Unlike withdrawing money on a debit card, withdrawing money on a credit card will incur interest charges.
Therefore, you are advised to always be aware and pay attention to the following in order to avoid losses from credit withdrawal transactions in the future.
1. Interest will be charged around 4%
As previously said, withdrawing money on a credit card is not the same as withdrawing money on a debit card. There is interest charged for every money withdrawn. This is because the money withdrawn is not your savings money, but rather the bank money lent. The amount of interest charged by each credit card issuing bank varies, generally around 4-6%.
2. Timely Repayment with Full Payment System
As paying off credit debt in general, in credit cash withdrawal transactions, you are also advised to pay off debt on time. Debt payment delays in addition to causing customers to be chased by debt collectors , can also make credit cards blocked by debtors. Therefore, always make sure to pay off credit debt on time.
Furthermore, paying bills with a full payment system means paying in full without any interest expense to be paid in the future. Therefore, a payment system like this is highly recommended for customers who use credit cash withdrawals. The goal, of course, is not to get into debt due to the swelling minimum payment interest.
3. Repayment Ability
The ability of customers to match their pay power with the amount of credit cash withdrawal is needed. In credit cash withdrawals, the interest on a bill will be multiplied by the selected nominal limit. Thus, the greater the limit a customer has, the greater the total bills he must pay later.
Extra awareness is needed to understand that funds generated through credit cash withdrawals are not like cash withdrawals from savings. In essence, the credit system provides money that does not belong to the customer. Thus, the customer must pay a service fee to the debtor.
4. Use of Cash Withdrawals Only when Urgent and Prioritization of Savings
These third tips are tips that you can use when cash withdrawal is considered detrimental. By using credit cash withdrawals when pressed, the customer is expected not to withdraw money on the credit card whenever he wants.
Furthermore, customers are encouraged to start learning to allocate a portion of the salary or money obtained for emergency funds, replacing credit cash withdrawals. The goal is that you do not need to pay interest and or service fees from loans.
5. Limitation of Credit Cash Withdrawal Value
Each bank has the authority to limit the maximum value of credit cash withdrawals. The maximum limit given by the bank generally ranges from 70% of the agreed cash withdrawal limit. The purpose of the limitation itself is that the customer avoids the temptation to withdraw large amounts of cash cash.
In fact, this limitation can be used indirectly to put the brakes on excessive withdrawals. Unfortunately, some people actually complain about this because they feel able to pay bills along with interest and other costs that tend to be high.
Pay Attention to Interest in Every Credit Card Cash Withdrawal
Credit withdrawal does have many advantages. Starting from the practicality of shopping to how much money can be taken at one time. However, credit cash withdrawals must be accompanied by a wise attitude. The amount of interest and other fees is the bet if you are unable to use credit cash withdrawals as needed.