Credit cards are one of the financial products playing an essential role in our life. Credit cards used responsibly can help individuals earn rewards, deal with sudden expenses due to any medical emergency, tour, and develop a credit history.
Credit cards undoubtedly allow users to access the money whenever required. While credit cards are primarily used to pay directly, either online or offline, at a store, there can be many situations where one needs to pay in cash. Still, you need not carry cash. You may be required to pay additional fees when withdrawing money from your credit card. Instead, you can transfer the funds from your credit card to your bank account to make payments.
Here is everything about how to transfer money to your bank account from your credit card and the pros and cons of such a transfer.
Online Transfer of Money
Several ways are available for you to transfer money. A few of the most used ways to transfer money from your credit card are as follows:
– Internet banking:
Direct transfer using online banking services available with your bank account is one of the simplest methods. You can log into internet banking and make a direct transfer.
– Digital wallet:
It is also used to make direct transactions to your bank account using digital wallet applications. Various e-wallets can help you transfer money. Some of the wallets are Paytm, Mobikwik, Free charge, and others.
– Western Union
One can send money globally using money transfer portals, like Western Union. Just sign up at the website and then log in to your account. Select the country and the amount of money to be transferred. Input the account details of the receiver and send the money to the bank account from your bank account.
It works on a similar concept as Western Union works. Send money to over 400 banks using MoneyGram. Through this method, transferring money can take 1-5 days.
Offline Transfer of Money
When one wants to transfer money to the bank via offline methods, cheques are a viable choice. You need to make it a ‘Cheque to Self’, and write the required details on the cheque. Deposit the cheque in the bank. It may take a few working days to process the cheque. The bank may charge a fee that varies from one bank to another.
You can use your ATM card also to make the transfer using the ATM cash advance feature. Withdraw cash from the ATM and deposit this amount into your bank account. It is like depositing money into a bank account with your credit card. But it carries an interest rate on the entire transferred amount, making the transfer more expensive than other methods.
Things to consider
A bank transfer from a credit card is a way to bypass the hefty charge of cash withdrawal from a credit card. A credit card can be used to fund your bank account, but it is not the primary use of a credit card. You need to consider the following aspects while using this facility on a credit card:
- Rate of Interest: For the facility of credit card transfer to your bank account, banks charge an interest fee. For a transfer to your bank account from your credit card, there will be credit card charges even if you have paid your bill on time.
- Additional Charges: The credit cardholder needs to pay an additional charge or a premium to transfer money from the card to your bank account. Often it is between 3-4%. Your credit card can rescue you but add money to your bills. However, you can find the right credit card that can save you from hefty charges. There are a few credit cards that allow interest-free cash withdrawal from ATMs and do not attract huge charges on a transfer from a credit card.
- Credit card users should know that the banks report individuals who spend more than Rs. 2 lakh annually on their credit cards to the income-tax authorities. Frequent transfers from a credit card to a bank account should be avoided.
In the end, balance is necessary. Often, most individuals get tempted to use credit cards frequently. Simply because the cardholder feels like spending others’ money, it is easy to get lost and use all the credit card limits. It is an extremely unhealthy habit for car users. Make sure you practice balancing the money you have and the credit limit. It is your decision how much credit limit you want to utilise and where. Thus, the answer to ‘can I transfer money from credit card to bank account‘ the answer is a big yes, you can. But, it is feasible to use frequently! Let us find out. You just need to make wise decisions that would boost your credit score.