I have a credit card, where the terms and conditions have this to say about cash withdrawal:
B. Cash Advance Fees
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. ... All cash advances also carry a finance charge equal to the charges on revolving credit (please refer to the schedule of charges) from the date of withdrawal until the date of full payment.
Consider the scenario where the statement date of the credit card is the 10th of every month, and the due date is the 20th of every month. Assume that in a particular month, on the 5th, an amount X1 is spent on an in-store purchase paid for with the card, and an amount of X2 is withdrawn (again on the 5th) as cash from an ATM, using the card. There are no other transactions on the card in the statement month, and the previous balance on the card was zero.
Given the terms above, what would be the statement amount that would be generated on the 10th? What would be the due amount on the 20th?
If it were only the in-store purchase, then the statement and due amount both would be X1. But given the cash financing clause, does the statement amount become:
- X1 + X2
- X1 + X2 + Interest on X2 computed from the 5th to the 10th
- X1 + X2 + Interest on X2 computed from the 5th to the 20th
If it is the last, what happens if I pay the full amount prior to the 20th (say the 15th)? Does the balance of the interest on X2 get refunded to me?
All of this is predicated on my reading of the T&C that cash advances attract interest charges from the date of withdrawal regardless of when the statement is generated -- that is, there is no interest moratorium on cash withdrawals.