Have credit card? Why you shouldn't use it to withdraw money from ATM

Withdrawing cash from an ATM with a credit card could prove costly. Most of the credit cards allow users to withdraw cash from ATMs but such transactions are not free. Withdrawing money from ATM with the credit card is a cash advance - a kind of borrowed money, or a type of short-term loan - which come with a fee. Hence, credit card users should avoid withdrawing cash from the ATM. 
The cash advance feature of credit cards come at a price as banks levy charges on each withdrawal. The charges may range from 2.5% to 3% (minimum Rs 500 - Rs 700). Also, you will have to pay interest to the bank on the amount withdrawn with the credit card. 

The interest rates charged on cash advance are different for different banks. Unlike regular credit card transactions, banks offer no interest-free period on the cash advance. This means you will have to pay interest starting from the very first day of withdrawal. Also, the bank will levy a late payment charge in case you fail to return the cash advance before the due date. 

Cash advance charges by SBI, HDFC

The SBI Card charges 2.5% or Rs 300 transaction fee. The SBI Card website says, "The Cardholder can use the Card to access cash in an emergency from domestic/international ATMs. A transaction fee would be levied on all such withdrawals and would be billed to the Cardholder in the next statement. A transaction fee of 2.5% or Rs. 300 whichever is higher at domestic ATMs and 3% or Rs. 300, whichever is higher at international ATMs will be levied."

The cash advance fee charged by HDFC is 2.5% (minimum Rs 500). 

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HDFC says the cardmember can use the card to access cash in an emergency from ATMs in India or abroad. The bank levies a transaction fee of 2.5% (minimum Rs 500) on the amount withdrawn. It is billed to the card member in the next statement.