One of my friends went to an ATM to withdraw cash. Instead of inserting his debit card, he inserted his credit card by mistake. Only after pulling out cash from the machine, he realized that he withdrew cash from credit card. Cash withdrawal from a credit card attracts interest from Day 1. There is no free credit period for cash withdrawals. As he is aware of this fact, he immediately deposited the cash back into his credit card account. However, the bank charged him INR590 (including GST) for this transaction as fee. He lost his hard-earned money in a whisker and ended up paying a fee.
Cash withdrawal from a credit card attracts interest from Day 1. There is no free credit period for cash withdrawals.
When he shared this incident with me, I asked him “Do you use the same PIN number for both your debit card and credit card?”. He immediately said ‘Yes, you got it”. So, here is the catch. If you use the same PIN number for all of your cards, then your ATM transaction will get through, irrespective of the card that you insert. If my friend had a different PIN number for his credit card, then the ATM machine would have stopped his transaction saying the PIN number is wrong. The entire incident would have been avoided including the fee paid to the bank. In order to avoid such losses in the future, I suggested him to change the PIN number for his credit card immediately.
Most people keep the same PIN number for all of their cards, as it is convenient to remember.
Most people keep the same PIN number for all of their cards, as it is convenient to remember. However, it will prove costly, at times, as it did in my friend’s case. If you are also like my friend and have the same PIN number for all your cards, please change it. You need to have different PIN numbers for different cards so that you do not lose your hard-earned money. At least, you must have a different/unique PIN number for your credit card.
Alternatively, you can also try turning off ATM transactions facility for your credit card from your bank’s mobile application. CITI Bank allows to do this, and I think it is possible with other banks as well. (Please refer the screenshot) The feature must be available under Manage Cards menu. Once turned off, then this will restrict all ATM transactions for your credit card and in turn will protect you from any inadvertent adverse actions.
