How to Transfer Money from Credit Card to Bank Account Online

Credit card is a payment instrument issued to customers that enables them to pay a merchant for purchasing products.It gives the ease of carrying, as well as paying cash, as the money does not need to be paid upfront by the user. Thus, the credit card is also considered as an essential alternative of cash. The best option is to convert the lump sum payment through credit card into EMI (Equated Monthly Instalments), after a big-budget purchase.

The credit card not only allows you to purchase products even though you do not have enough funds in your savings account but also allows you to transfer funds to a savings account. There are different ways through which you can transfer funds from your credit card to your savings account. However, these methods may involve high fees in one way or the other.

Although a credit card may be used in a lot of places, there are certain circumstances where payment through credit cards is not accepted. For example:

• Payment of car loans
• Payment of home loans
• Paying other credit card’s bill (not to consider – balance transfer option)

Therefore, in such situations, money should be paid from bank accounts. Though one might have a higher credit limit, one would not be able to utilise those credit lines in these situations. To access the available credit from the credit card, transferring money from credit card to bank account can be a viable option but this should be done as a last resort and in case of emergencies only.

Methods of Fund Transfer from Credit Card to Savings Account Online

Normally, credit cards are used to pay for goods and services and it is not the prime method to get money in your savings or current accounts, but it is one of the ways to access some funds in case of urgency or to meet one’s financial requirements.

There are different mobile apps through which money transfer has become quick and easy. You can download those apps on your smartphone and complete the required fund transfer process. These apps work for both Android and iOS devices. You can also register in the same apps through your smartphone, desktop, tab or laptop and can perform balance transfer online.

Following are some ways to transfer money from Credit card to Bank Accounts online:

Transferring Money from Credit Card to Savings Account Using MoneyGram

You can send money across the globe and to accounts of over 400 banks globally. The steps involved are:

• Select the receiver and the country where the bank account is being operated. The complete name of the receiver is mandatory. In case you are sending it to your own account, need to provide relevant details of your account, your complete name,
• Select ‘Account Deposit’ option on the screen and enter the amount to be transferred.
• While selecting the method of payment, choose the option, ‘Credit Card’. (In case the transaction deals with more than one currency, then exchange rate and fees involved will be displayed on the screen).
• You have to provide certain information about yourself as the sender so that those could be verified.
• Provide information of recipient’s bank account, name and other required details.
• The money will be securely transferred to the bank account.

Fund Transfer from Credit Card to Savings Account through Western Union

This works on a similar concept like MoneyGram and the process steps are as follows:

• Register with Western Union – Free of cost.
• Login to your profile.
• Select country, the amount to be transferred and the method of delivery (in this case to the bank account).
• Enter bank account information of the receiver.
• Make a payment using your credit card.
• A confirmation will come through e-mail along with the tracking number, also known as Money Transfer Control Number (MTCN).
• The money will be transferred to the recipient account

Things to be Noted

Direct transfer to the bank account is subject to amount, country, currency, regulatory aspects of the bank, local timing and the hours of operation. It may take from 1 to 5 working days to transfer money from your credit card to an account through Western Union.

Using Paytm (and other e-wallet services like FreeCharge, MobiKwik)

This feature is devised mainly to avoid keeping too much balance in your e-wallet. But this could be used to transfer money from your credit card to your bank account also. Related steps are below mentioned:

• Register with Paytm
• Transfer fund from credit card to wallet
• Open the Paytm App and go to ‘Passbook’
• Select the option: ‘Send money to Bank’
• Select ‘Transfer’ option
• Enter information regarding the amount, account number, and IFSC
• Click on ‘Send’ button and money will be transferred to your account

This is essentially a wallet reload from your card and most of the cards do not give any reward points for such transactions. However, some HDFC Credit Cards like HDFC Millennia give cashback/rewards on wallet reloads as well.

Online Transferring Funds from Credit Card to Other Bank Accounts

There are other ways to transfer fund online like using PayDeck. But the major difference is that you cannot pay to your own account using PayDeck. But for paying to any other bank account it works. Key features of PayDeck include:

• The receiver does not need to be registered with PayDeck.
• You need to provide your PAN number for verification.
• Payment to be done using your card.
• You cannot transfer to your own account.

Fund Transfer from Credit Card to Savings Account via Net Banking

Below mentioned are the simple steps to transfer money directly from your credit card to your bank using net banking services:

• Visit the respective bank’s official website
• Log in to your credit card account via net banking
• Select the transfer money option
• Enter the transfer amount you wish to send
• Mention all the required details as indicated
• Follow the further instructions to complete the transaction

Money Transfer by ATM Cash Facility

You must be aware that you can use the ATM fund transfer option, if you wish to send money from your credit card to your bank account. Follow these steps to use ATM as money transfer service:

Step 1: By accessing your credit card, avail the ATM cash advance service by withdrawing money from an ATM

Step 2: Enter the amount you wish to send to your bank account by depositing at one of your bank’s branches.

Precautions for Transferring Money from Credit Card to Bank Account

Using a credit card to generate credit to your bank account is not the intended use of credit card and generating cash for the bank account through this measure could create difficulty. Though using a credit card to transfer money to bank account is the way to bypass the payment of hefty charge of cash withdrawal from credit card, but banks have to report customers to income tax authorities who spend more than 2 lakhs per year on credit cards. So, generating free credit might bring the person under the scan of the income tax department and authorities keeping a check on unauthorised practices.

Moreover, defaulting to pay credit card dues after the statement is generated will fetch a fine of 3 to 4% monthly on the outstanding amount. This will cost much more for the transferred money compared to getting a similar fund in a legitimate way.

Factors to consider while transferring cash from credit card to bank account

Interest Rates and Fees

There are certain transaction fees involved in transferring money from your credit card to a bank account. Most of the credit card issuers levy a processing fee of 1% – 5% of the transferred amount. Therefore, you should consider these costs before transferring money from your credit card to your bank account.

Credit Limit and Available Balance

If you want to transfer money from your credit card, you must make sure that you have sufficient credit card limits available on your credit card. Try not to exceed the sanctioned and available limit, as it may lead to penalties and additional costs.

Security Precautions

You should always prefer trusted and secured platforms for transactions. Moreover, you should never share your confidential information with anyone, such as credit card CVV, OTP, PIN, etc. The internet connection used for online transactions should be secure and private.

Though there are certain restrictions and fees involved in fund transfer from credit card to a savings or current account, still it is cheaper than opting for a personal loan or going for cash withdrawal from a credit card that incurs high-interest rates and charges. Based on the availability of facility, apps and the amount required to transfer, one can choose the right method of fund transfer from credit card to account. But be aware of the regulatory issues involved around the whole process.