That’s right. Credit cards encourage consumption first and then repayment, rather than withdrawing cash directly. The handling fee for direct cash withdrawal is very high.

1. In addition to interest, there are also handling fees for credit card cash withdrawals

In addition to paying interest, credit card cash withdrawals also charge certain handling fees. The interest is generally 0.05% daily interest, and the handling fee is generally about 1% of the cash withdrawal amount. The larger the cash withdrawal amount, the higher the handling fee. This may be why credit card interest rates are high.

2. Interest accrual on handling fees

In addition to the familiar interest accrual on principal and interest, credit card cash withdrawals also accrue interest on handling fees. "Interest on handling fees" means "interest is also charged on cash withdrawal fees", so your interest = interest on principal + interest on compound interest + interest on handling fees. This may also be the reason why the more you use your credit card to withdraw cash, the higher the interest rate.