How do Transfer Money from Credit Card to Bank Account?

Credit Cards have become an important part of our life. If it is used in the right manner, you can earn rewards, cashback and various offers while efficiently managing your finances. It enables you to buy the products when you have inadequate funds in the account and transfer funds to the bank. Now, you can transfer money from a credit card to a bank account and tackle the need for funds in an emergency. In this article, you will learn various ways to do the same.

Key terms to understand for money transfer from a credit card to a bank account

A Bank account is a contract between the bank and the account holder to withdraw money as required while keeping some amount in the bank. There are two kinds of accounts- Saving and checking. Checking accounts enables free deposits and withdrawals, while saving accounts have certain restrictions.
Interest- It is the money paid on borrowing a certain amount and given as the annual percentage.
Debit card- The debit card uses the amount directly from the bank and can be used to purchase services or products.
Credit card- It enables the customers to loan cash for buying products or services to the merchants. This money must be paid back to the banks and carries additional charges if not paid on time.

How do Transfer Money from Credit Card to Bank Account?

There are two methods of transferring money from a Credit Card to a Bank Account: offline and online. So, let me tell you how to transfer money in a time of need.

Online Money Transfer

Onlinemoney transfer from a credit card to a bank requires the internet and mobile apps. It can be done after getting approval from the respective bank. I am discussing various ways to transfer money online.

E-wallets - There are numerous online wallets with different procedures to transfer money from a credit card to a bank account. You can follow the steps after installing the respective wallet.
Internet banking is one of the ideal options for transferring money from a credit card to a bank account. You can go to the bank website and log into the credit card account. Then select transfer and enter the amount that needs to be transferred. Now, complete the required details and finish the transaction as directed.

Offline Money Transfer

This option doesn't need the internet and can be done through ATM, phone, and cheques. So let's discuss all these options one by one.

ATM- You can take the cash using a credit card and transfer the money into the account. The charges are based on the selected bank.
Phone call- One of the best ways to instantlysend money from a credit card to a bank account without an internet connection. You can call your service provider and request to transfer funds. Then check the amount twice that must be deposited in the account and provide the bank account number. Then, you are required to follow their instructions to complete the process.
Cheques- You can also send the cheque in your name and contact the concerned agency. You can make the check and write self in the payee section. Go to the bank and deposit the check.

Factors to consider to transfer money from a credit card to a bank

We are discussing various things to consider during credit card to bank transfer. These are as follows:

If not required, you must avoid transferring funds from credit card to bank as the credit card is meant to do direct payment instead of cash transfer.
The bank allows you to go for a credit card to bank transfer without charges, but they report to the IT department if you have spent more than 2 lakh rupees yearly from the credit card. So, the frequent transfer from credit card to bank account instigates the income tax department to monitor your transactions.
If you fail to repay the amount transferred from your credit card to the bank, the bank can charge you a monthly penalty of 3-4 per cent. Hence, it will cost you to pay more as compared to the funds transferred from a credit card to a bank.

Benefits to sending money from a credit card to a bank account

Manage funds- Transfer money from a credit card to a bank account enables you to reduce interest rates on the borrowed money. If you have different credit cards, you have different repayment dates and amounts. You can select a single date to repay the entire amount at your convenience to avoid late charges.
Earn rewards- Many financial institutions provide cashback or reward points to send money from credit card bank accounts instantly. Also, the bank offers additional benefits of less paperwork, instant cash transfer and paperless remittance.
Better credit terms- The good service, short payback period, default fees, and grace periods are certain advantages the bank provides.
The low-interest rate on payback amount- You get the benefit of paying the money back at your convenience at low-interest rates.

These benefits will convince you to transfer money from a credit card to a bank account if you urgently need funds at low-interest rates. But you must keep monitoring your credit score and its impact on your creditworthiness. You must have a good credit score if you choose to do the same. Also, you must pay the amount sooner to maintain a good credit score. Failure to pay the amount back in the decided time will affect your credit score.

Important points to know before transferring money from a credit card to a bank account

The money transfer from a credit card to a bank has various benefits, but you must also consider two important points.

Transaction Fees- The transfer of money from a credit card to a bank comes with transaction charges. The fees vary from bank to bank and depend on the transferred amount.
Debt remains the same- Although banks provide you with this benefit at a low-interest rate, the debt amount has to be paid within a stipulated time. If not paid on time, it can affect your credit rating.

Conclusion

Credit cards provide various benefits and are a blessing in a time of need. It is also useful if you need cash, as you can transfer money from a credit card to a bank account. Also, you must repay the borrowed money on time to maintain a good credit score for future use. We have discussed various ways for the same, and permission or approval from the bank or concerned financial institution must be taken before fund transfer. You benefit from paying the amount at your convenience at low-interest rates.

FAQs on Money Transfer from Credit Card to Bank Account:

How can I transfer money from my credit card to my bank account online?

The onlinemoney transfer from a credit card to a bank account can be done through internet banking and e-wallets. You have to take prior approval from the bank to transfer the funds. Then you can easily log into your credit card account and transfer the funds by following the instructions.

What are the charges for money transfer from credit card to your bank account?

The charges for a credit card to bank account transfer vary from bank to bank. You can contact your bank and check with them about the charges.

Can I transfer money from my credit card to my bank account?

You must be wondering how to transfer money from a credit card! Yes, you can transfer the money through offline and online methods. You can sign a cheque, do NEFT or RTGS and transfer the funds by calling a customer care representative. Also, the funds can be transferred online through net banking and e-wallets or mobile applications.

Is it good to transfer money from a credit card to a bank account?

The money transfer from a credit card to a bank is cheaper, more convenient and feasible. But if you do it frequently, it will attract the attention of bank authorities and the income tax department, and you may need help. Therefore, you are advised only to use this in case of urgent need of funds.