CC Full Form in Banking: Purpose, Limits, Interest Rates

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The term “CC full form in banking” often confuses students exploring financial terms. In most cases, it stands for Credit Card, a tool that allows you to borrow money for purchases and repay it later.

However, “CC full form in banking” can also refer to Cash Credit. It is a facility designed for businesses to manage short-term financial needs. This blog simplifies meanings, purpose, limits, interest rates, and more.

What is the Full Form of CC in Banking?

In banking, “CC” typically means Credit Card for personal use. Banks like SBI, HDFC, and ICICI issue credit cards to individuals, enabling them to shop, pay bills, or book travel tickets.

Alternatively, “CC” stands for Cash Credit. It is a loan option that supports businesses in covering operational costs and fulfils working capital requirements.

  • CC- Credit Card
  • CC- Cash Credit

Both serve distinct purposes, but they share a common goal: providing access to funds when needed.

Full Form of CC as Credit Card

A Credit Card allows you to borrow money from a bank for purchases, with repayment due later. Many banks offer cards to individuals who fulfil credit card eligibility, including students, businessmen, working professionals, etc, to manage expenses like books, gadgets, or travel.

Purpose of a Credit Card

Credit Cards provide convenience and flexibility. They help you pay for immediate needs like online courses or hostel fees. You don’t have to worry about waiting for pocket money or savings. 

  • For students abroad, they help cover travel or emergency costs.
  • Working professionals can manage bill payments, do shopping, or book business trips.
  • For homemakers, credit cards simplify household expenses—groceries, utility bills, or school fees—easing monthly budgeting.
  • For senior citizens, CCs offer a safety net for medical bills or unexpected costs, reducing reliance on fixed pensions.

Borrowing Limits on Credit Cards

Banks set credit limits based on your profile, such as income or credit history. Here’s a look at the top banks in India and their typical ranges:

BankCredit Limit RangeCash Withdrawal Limit
SBIINR 10,000 to INR 50,00040% to 50% of credit limit
HDFCINR 25,000 to INR 5 lakh20% to 40% of credit limit
ICICIINR 20,000 to INR 3 lakh30% to 50% of credit limit
Axis BankINR 25,000 to INR 4 lakh20% to 30% of credit limit
Kotak MahindraINR 20,000 to INR 3 lakh30% to 40% of credit limit
Punjab National BankINR 15,000 to INR 2 lakh25% to 40% of credit limit
Yes BankINR 30,000 to INR 5 lakh20% to 30% of credit limit

Make sure to keep credit card cash withdrawal limits in mind. Banks allow you to withdraw only a percentage of your credit limit (typically 20% to 50%). 

For example, on an INR 50,000 SBI card, you might access INR 20,000 to INR 25,000 in cash. Avoid over-borrowing, as cash withdrawals often carry higher interest rates and fees.

Interest Charged on Credit Cards

Banks charge interest on credit cards if you don’t repay the full amount by the due date, typically 20 to 50 days after your billing cycle ends. The rate ranges from 2% to 3.5% per month, translating to 24% to 42% annually, depending on the bank and card type. 

For instance, SBI might charge 3.5% monthly (42% yearly), while HDFC charges 2.5% (30% yearly) for student cards. Interest applies only to the unpaid balance, not your entire credit limit. 

Suppose you spend INR 10,000 on your Canara Bank student credit card with an INR 20,000 limit and repay INR 6,000 by the due date. Interest accrues on the remaining INR 4,000. At 3% monthly, that’s INR 120 extra in the first month, growing if unpaid.

Cash withdrawals attract immediate interest—no grace period applies. For example, withdrawing INR 5,000 from an Axis Bank card might cost INR 150 in fees plus daily interest until repaid. Late payments add penalties (INR 500 to INR 1,000) and hurt your credit score, making future loans harder to get.

Also Read: Foreign Transaction Fees on Credit Cards: Check How They Work & Ways to Avoid Them

Full Form of CC as Cash Credit

Cash Credit is a loan facility for businesses, allowing them to withdraw funds up to a set limit. It’s not for personal use but supports companies in managing daily operations, offered by various banks like PNB and Axis Bank.

Purpose of Cash Credit

Cash Credit addresses working capital requirements. It funds businesses that need credit/ loans for short-term liabilities like inventory, rent, or salaries.

  • Cash Credit ensures businesses pay suppliers or staff even during slow sales.
  • It funds bulk purchases, like a shop stocking up for festivals.
  • Cash Credits are like emergency buffers and cover unexpected costs, such as equipment repairs.
  • Businesses can withdraw cash credit as needed, unlike fixed-term loans.

Borrowing Limits on Cash Credit

Borrowing via Cash Credit works like a flexible overdraft. Banks approve a maximum limit based on your business’s turnover, assets, or creditworthiness. 

You withdraw only what you need, when you need it, and repay at your pace, with interest charged solely on the used amount. 

For example, if a business gets a cash credit of INR 10 lakh limit from SBI but withdraws INR 3 lakh to buy stock, it pays interest only on INR 3 lakh. 

Repayments replenish the limit, allowing repeated borrowing within the sanctioned amount. Here’s a table of borrowing limits from top Indian banks:

BankBorrowing Limit RangeBasisKey Note
SBIINR 5 lakh to INR 50 lakhBusiness turnoverWide range for small to medium firms
HDFC BankINR 2 lakh to INR 25 lakhCash flow, collateralQuick approval for growing businesses
ICICI BankINR 3 lakh to INR 30 lakhRevenue, credit historyFlexible for seasonal needs
Axis BankINR 10 lakh to INR 1 croreAsset value, turnoverHigher limits for established firms
Punjab National BankINR 1 lakh to INR 10 lakhTurnover, securityAffordable for small traders
Bank of BarodaINR 2 lakh to INR 20 lakhBusiness performancePopular in rural and semi-urban areas
Kotak MahindraINR 5 lakh to INR 40 lakhFinancial statementsSuits medium-sized enterprises

Interest Charged on Cash Credit

Banks charge 9% to 15% annually on Cash Credit, but only on the amount withdrawn, not the full limit, making it cost-effective compared to term loans. 

The rate varies by bank, loan type (secured or unsecured cash credit), and the business’s risk profile. For example, a secured Cash Credit from PNB might start at 9%, while an unsecured one from Kotak Mahindra could reach 15%. Interest accrues daily and compounds monthly, calculated on the outstanding balance.

Additional costs may apply to cash credit borrowing. Check the table below for details.

Cost TypeRangeDetails
Processing Fees0.5% to 2% of limitE.g., INR 5,000 on INR 10 lakh limit, paid upfront
Renewal FeesINR 1,000 to INR 10,000 yearlyCharged to extend the facility annually
Late Payment Penalty1% to 2% of overdue amountAdded to interest; may reduce limit if delayed
Rate AdjustmentRepo (6.5%) + 3% to 8% marginBased on RBI repo rate and creditworthiness

Secured vs. Unsecured Cash Credit

Cash Credit comes in two forms- secured and unsecured. Check out the table of differences below.

AspectSecured Cash CreditUnsecured Cash Credit
CollateralNeeds assets like property or stockNo collateral required
Interest RateLower (9% to 12%) due to securityHigher (12% to 15%) due to risk
ApprovalSlower, requires asset checksFaster, based on business health
LimitHigher, linked to asset valueLower, tied to performance

Also Read: Differences Between Credit Card And Debit Card: Key Differences Explained

Tips to Use CC Wisely

Using “CC” wisely—whether Credit Card or Cash Credit—means managing borrowing to avoid financial strain. Smart habits ensure you or your family benefit without falling into debt traps.

So, now that you know the full form of CC in banking, check out the tips to use CC wisely:

Tips to Use Credit Cards Wisely

Credit Cards offer convenience but require discipline to keep costs low. Here’s how different individuals can use them effectively:

  • Students: Set a budget for books or travel; avoid cash withdrawals due to high fees.
  • Businessmen: Use for small expenses or rewards; clear dues fully to skip interest.
  • Working Professionals: Pay bills on time; leverage cash back without overspending by using the best cash-back credit cards in India.
  • Senior Citizens: Limit use to emergencies; check statements to avoid hidden charges.
  • Homemakers: Track grocery spends; opt for EMIs only if repayment is certain.

Tips to Use Cash Credit Wisely

Cash Credit supports businesses but needs careful handling to maintain cash flow. Here are practical tips for businesses:

  • Small Businesses: Borrow only for urgent needs; repay quickly to lower interest.
  • Medium Firms: Use for inventory during peak seasons; avoid maxing out the limit.
  • Family-Run Ventures: Align withdrawals with sales cycles; prioritize education funding.
  • Retailers: Monitor daily balance; use surplus to reduce outstanding amount.
  • Startups: Plan repayments with revenue; negotiate lower rates with banks.

To sum up, the “CC full form in banking” splits into two: Credit Cards for personal use and Cash Credit for business needs.

Both offer borrowing solutions, but they serve different purposes. Indian students benefit from understanding these—whether managing their expenses. Check out the FAQs for more information.

FAQs

What is CC full form in banking?

CC stands for Credit Card for individuals, letting you borrow money for personal expenses. It also means Cash Credit for businesses, providing funds for short-term operational needs.

What is CC in bank details?

In bank details, CC refers to a Credit Card account for personal spending or a Cash Credit account tied to a business, offering flexible borrowing options.

What is CC account limit?

A Credit Card limit ranges from INR 10,000 to INR 5 lakh, depending on your bank and profile. A Cash Credit limit varies from INR 1 lakh to INR 1 crore, based on business turnover or assets.

Can I withdraw money from CC account?

Yes, you can withdraw cash from a Credit Card up to 20% to 50% of your limit, but it incurs high fees and interest. For Cash Credit, businesses withdraw funds as needed within the approved limit.

Is CC loan good or bad?

A Credit Card loan works well for convenience if you repay on time, but high interest makes it costly otherwise. Cash Credit benefits businesses by supporting cash flow, though over-borrowing risks debt.

What is credit limit on CC?

For Credit Cards, banks set limits like INR 10,000 to INR 50,000 for students or up to INR 5 lakh for others. For Cash Credit, limits range from INR 1 lakh to INR 50 lakh or more, tied to business needs.

Can I have 2 CC accounts?

Yes, you can hold multiple Credit Cards from different banks if you qualify. For Cash Credit, businesses typically maintain one account per bank, but multiple accounts are possible with strong financials.

What is the CC loan interest rate?

Credit Cards charge 24% to 42% annually (2% to 3.5% monthly) on unpaid balances. Cash Credit rates range from 9% to 15% annually, applied only to the withdrawn amount.

Can you use CC on an ATM?

You can use a Credit Card at an ATM for cash withdrawals, though it attracts immediate interest and fees. Cash Credit isn’t used at ATMs; businesses access it via bank accounts.

What is the cash withdrawal limit in CC?

Credit Cards allow cash withdrawals of 20% to 50% of the limit (e.g., INR 20,000 on a INR 50,000 card). Cash Credit has no specific cash withdrawal cap—businesses use the full sanctioned limit as needed.

To learn more about education loans, the best bank accounts for students, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.

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About Shubhika Garg

Hey there! I'm Shubhika- a proud graduate in English Literature and Language from Delhi University. My journey as a content writer transitioned from online teacher into the world of words. Stepping into the domain of blogs and articles, I discovered my passion for writing growing deeper and stronger. Having said that, I have experience of writing for diverse industries in automobile, technology, ed-tech, finance and mental-health; crafting details to help you find the solution to what you are looking for. Join me as I invite you all explore and learn together.

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