A Step-by-Step Guide for Transferring Funds from Credit Card to Bank Account
There may be situations where you need to transfer money from your credit card to your bank account. While credit cards are primarily used for making purchases, certain circumstances may require you to access cash or transfer funds to your bank. And there is a virtual credit cards available online, It's a tool designed to create valid credit card numbers for testing and educational purposes. With this resource, users can access virtual credit cards, ensuring authenticity while exploring the realm of testing and education.
In this comprehensive guide, we will walk you through the process of transferring money from a credit card to a bank account, highlighting the steps, considerations, and potential fees involved.
Assessing the Feasibility
Before initiating a transfer, it is important to determine if your credit card allows cash transfers to a bank account. Some credit cards offer this feature as a cash advance option, while others may not permit such transfers. Review your credit card terms and conditions or contact your card issuer to confirm if this facility is available.
Understand Cash Advance Terms
If your credit card permits cash advances, familiarize yourself with the terms and conditions associated with this feature. Cash advances typically have higher interest rates compared to regular credit card purchases. Additionally, cash advance fees, often calculated as a percentage of the amount withdrawn, may be applicable. Consider these costs before proceeding with the transfer.
Choose a Transfer Method
There are different methods to transfer money from a credit card to a bank account. The most common methods include:
- Balance Transfer: Some credit cards allow you to transfer the credit card balance to a bank account. This option may have specific terms and fees associated with it, so review the details and eligibility criteria provided by your credit card issuer.
- Cash Advance:If cash advances are permitted, you can withdraw cash from an ATM using your credit card and then deposit it into your bank account. Remember that cash advances often incur immediate interest charges and fees, so consider this before opting for this method.
- Third-Party Payment Services: Certain online payment platforms or digital wallets may allow you to transfer money from your credit card to a bank account. These services often charge fees or impose limitations, so research and compare various options before choosing this method.
Verify Transfer Limits and Charges
Before proceeding with the transfer, check the transfer limits set by your credit card issuer. There may be daily, weekly, or monthly limits on cash advances or balance transfers. Additionally, review any associated charges such as cash advance fees, transaction fees, or service fees to understand the cost implications.
Initiate the Transfer
Once you have chosen the most suitable method and considered the associated costs, you can initiate the transfer. Follow the instructions provided by your credit card issuer or the selected payment platform to complete the transaction. Ensure that you provide accurate bank account details to avoid any issues with the transfer.
Repayment Considerations
Keep in mind that transferring money from a credit card to a bank account does not eliminate your debt. The transferred amount will still be considered a credit card balance, and you will need to repay it according to your credit card terms. Be aware of the interest charges and repayment obligations associated with the transfer.
Transferring money from a credit card to a bank account can be a helpful option in certain situations. However, it is essential to understand the terms, fees, and implications before initiating the transfer.
Evaluate the feasibility, consider the associated costs, and choose the most suitable method based on your specific needs. Responsible management of your credit card debt and timely repayment are crucial to maintain a healthy financial standing.
Credit cards are arguably the most versatile financial tools you can have, provided you use them wisely. A credit card is your pre-approved short-term line of credit which adds to your purchasing power. Apart from the lucrative rewards, discounts, and cashbacks, the actual worth of credit cards is realized in times of financial crunch and meeting unexpected expenses. However, certain transactions are there that cannot be completed through credit cards.
For instance, payments of EMIs, money orders, and a range of expenses can only be met in cash. In such cases, you can always transfer money from credit card to bank account. Moreover, in case of emergencies, it’s the fastest way to avail of liquid cash.
What is Online Money Transfer?
Online money transfer has converged the conventional system of money transfer involving physical transfer of money or instruments to electronic transfer of money involving a mere exchange of data. Funds are transferred between two bank accounts electronically without any movement of funds.
There is no need to visit your bank to make an online transfer; modes like net banking and UPI payments provide a secured web-based service that can be used to transfer money online.
Is it Legal to Transfer Money from a Credit Card to a Bank Account?
Though credit cards are meant for meeting your purchase obligations, there is no such restriction or question of illegality on transferring funds from a credit card to your bank account.
You can route money transfers from credit card to bank accounts through e-wallets like Paytm, money transfer services like MoneyGram, cheques, net banking, etc., provided you comply with the ceiling limit of your card.
How to Transfer Money from Credit Card to Bank Account using E-wallets?
E-wallets act as a bridge between the credit card and the bank. The money comes from the credit card to the e-wallet and is transferred to the bank account, leaving no trail that connects the credit card and your bank account directly.
Let’s understand through a step-by-step process:
Step 1: Register on the e-wallet.
Step 2: Complete the KYC process by providing your credentials and supporting documents.
Step 3: Once the KYC is approved, transfer money to your e-wallet from the credit card. Since e-wallets allow adding money into your wallet, this process won’t be an issue.
Step 4: Once the transfer is successful, look for “Passbook” on the e-wallet app or website. In the “Passbook,” you will find the “Send money to bank account “option. Select that option. Enter the amount you want to transfer and send money directly to your bank account.
Though money from credit cards can be routed to your bank accounts using e-wallets, the e-wallets might charge you a small transaction fee, and different wallets may have different transaction fees.
Steps to Transfer Money from Credit Card to Bank Account via Money Transfer Services
These services essentially facilitate the transfer of funds where a direct transfer is impossible. Some examples are MoneyGram, Western Union, Wise, Remitly, etc.
The following steps describe the way to transfer money by credit card to bank account using money transfer services:
Step 1: Login to your money transfer service account or register if you don’t have an account.
Step 2: In the next step, you’ll be asked to enter the “Country” of the recipient. Since you are transferring money to your bank account, enter your country as India and proceed.
Step 3: Provide details like your bank account number, full name, etc., as asked by the money transfer service.
Step 4: Select ‘credit card’ as the payment method and add the amount you want to transfer.
Step 5: Now proceed to transfer funds.
Step 6: It might take 1-5 days for funds to reflect into your bank account; thus, be patient.
Other Credit Card to Bank Money Transfer Options
Here are a few other options you could explore to transfer your money:
“Cheque to self” can be drawn to instruct your bank to transfer funds from credit card to bank account. However, this transaction will take a couple of days to reflect.
A NEFT or RTGS form could also be submitted to your bank, instructing them to debit your credit card account and credit the proceeds in your bank account.
Another way is to simply withdraw the amount from your credit card using an ATM facility and deposit the same into your bank account by paying a visit to your nearest branch. However, cash withdrawal from credit cards is subject to a considerable transaction fee.
Final Word
To make payments or meet expenses that cannot be met directly via a credit card or to save additional charges you might have to bear if you use a credit card, you can transfer money from your credit card to your bank account.
However, this shouldn’t be made a practice because the motive behind issuing credit cards is to provide you with a short-term line of credit and not to supplement cash in your bank account.
Frequently transferring funds from credit cards to bank accounts might attract the attention of credit card issuing institutions and the income tax department. Nevertheless, using funds transferred from credit cards is cheaper than using personal loans from banks or swiping credit cards for cash withdrawals, which have high transaction costs.
Thus, based on suitability, choose the mode to transfer money from your credit card to your bank account. But remember, you need to pay your credit card dues, so be financially prepared to meet your credit card liability at the end of the billing cycle.