A credit card is a payment instrument given to customers that allows them to pay a merchant for goods purchased. It provides the convenience of carrying as well as paying cash because the money does not need to be paid in advance by the user. As a result, credit cards are also regarded as an important cash alternative.
After making a large purchase, the best option is to convert the lump sum payment via credit card into EMI (Equated Monthly Instalments). So, how to transfer money from a credit card to a bank account?
Methods of Transferring Funds From Credit Cards to Bank Accounts
Credit cards are used to pay for goods and services, and they are one of the most important ways to access funds in an emergency or to meet immediate financial needs. There are several methods for transferring funds from your credit card to your bank account with some credit card cash withdrawal charges.
You can transfer funds directly to the bank using net banking, a credit card, or a phone call. You can also transfer money indirectly by using an e-wallet linked to your bank account.
Transfer to a Bank Account
You can transfer money directly from your credit card to your bank account by doing the following:
Internet Banking
You can transfer money directly from your credit card by logging into your online banking account. The fees for transferring funds from a credit card to a bank account vary by bank.
The following are the steps for how to transfer money from credit card to bank account via the Internet.
- Navigate to your bank’s website.
- Access your credit card account.
- Choose the transfer option.
- Enter the amount to be transferred.
- Fill in the form’s required information.
- To complete the transactions, follow the instructions in the form of alerts.
Phone Conversation
If you need the money right away but don’t have access to the internet, you can always do it over the phone. The fees for transferring money to a bank account from your credit card via phone call will be the same as the credit card cash withdrawal charges for net banking.
To obtain the most recent information, you must confirm the daily and monthly transfer limits with the bank. If you transfer funds to the same bank account where you have your credit card, the transfer is almost instant. If you want to transfer money to another bank’s account, it may take two or three business days.
Using Mobile Apps to Transfer Data
Money transfer has become simple and quick thanks to the availability of numerous mobile apps. You can get these apps by downloading them. They are compatible with both Android and iOS devices. You can sign up for these apps using your smartphone, desktop, tablet, or laptop, and you can transfer money online.
Precautions to be Taken While Transferring Money from a Credit Card to a Bank Account
Using a credit card to generate credit for your bank account is not the intended use of a credit card, and generating cash for the bank account through this method may cause problems. Though using a credit card to transfer money to a bank account avoids paying the hefty credit card cash withdrawal charges, banks are required to report customers who spend more than 2 lakhs per year on credit cards to income tax authorities. As a result, generating free credit may bring the individual under the scrutiny of the income tax department and authorities monitoring illegal practices.
Moreover, failing to pay credit card bills after the statement is generated will result in a monthly fine of 3 to 4% of the outstanding amount. This will cost much more for the transferred funds than obtaining a similar fund legally.
Summing Up
Though there are some restrictions and fees associated with how to transfer money from a credit card to a bank account, it still has fewer credit card cash withdrawal charges in taking out a personal loan or withdrawing cash from a credit card, which incurs high-interest rates and charges.
One can select the best method of fund transfer from credit card to account based on the availability of the facility, apps, and the amount to transfer. However, be aware of the regulatory issues that surround the entire process.
Although credit cards are widely used and are simple to use, they are not accepted in all places. For example, most car and housing loans, other card bills, and home loans do not allow credit cards to be used to make transactions.
This is where the need to transfer money to our bank account comes into play. Although there are some fees and restrictions associated with transferring money from credit cards to bank accounts, it is preferable to take out a personal loan or incur high fees by withdrawing cash from your credit card account.