How to transfer money from your credit card to a bank account? 5 simple ways
Credit cards offer smart shopping and convenient money transfers to bank accounts during emergencies. However, fees may apply, and excessive use can attract tax scrutiny. It's important to keep credit usage limited and maintain a healthy credit score to avoid financial burdens.
Credit cards are a great way to shop smartly while avoiding a burn in your pocket. Money transfer between a credit card to a bank account is a convenient way in case you are facing financial problems or you have urgent expenses or personal emergencies. Though generally intended for transactions and purchases, credit cards also provide cash advance and money transfer features.
While this may be an easy and convenient way to get quick cash, it may attract charges and fees which you may be liable to pay. Let us understand how you can send money from your credit card to your bank account in detail.
Key ways to transfer money from credit card to a bank account
1. Cash Advance via ATM
- ATMs offer you the option to withdraw cash or cash advances on most credit cards.
- Use your credit card PIN to withdraw the amount you want and deposit the cash to your bank account.
2. Online bank transfer
- Some credit cards also let you make direct transfers to your bank account using their mobile banking app or internet banking.
- Log in to the bank’s online portal, navigate to the money transfer section, and follow these steps:
- Choose the amount you wish to transfer.
- Fill the required details to complete the transfer as per the instructions.
- Confirm the transaction.
3. E-Wallet
- Register for your chosen e-wallet.
- Open the app and navigate to the ‘Passbook’ option.
- Select 'Send money to bank' and choose the ‘Transfer’ option.
- Enter the following details:
- Transfer amount.
- Beneficiary’s account number.
- IFSC code.
- Click on ‘Send’ to initiate the transaction.
4. Western Union
- Register for free with Western Union.
- Select the destination country and transfer amount.
- Choose ‘Bank Account’ as the delivery method.
- Enter the recipient’s bank account details.
- Complete the transaction using a credit card.
- Receive a confirmation email with a Money Transfer Control Number (MTCN).
- Funds are transferred within 1–5 business days.
5. MoneyGram
- Select the recipient and their country.
- Enter the recipient’s full name and bank account details.
- Choose ‘Deposit to account’ and input the transfer amount.
- Select 'Credit Card' as the payment method.
- Review the exchange rate and fees displayed.
- Provide sender information to verify the transaction.
- Confirm all details to complete the fund transfer.
Key precautions to consider
Credit card usage: Keep your credit card usage limited to direct purchases. It is advisable to use fund transfers to the bank account only in emergency circumstances.
Income tax scrutiny:Excessive usage of credit cards may draw scrutiny by the Income Tax Department.
Credit score:Keep a healthy credit score by paying credit card dues on time. This way you can improve your chances of getting low interest rates on your future borrowings.
Fees and charges:Transfer fees and interest rates usually apply from the time of transfer. It is advisable to be aware of all the charges which you will be bound to pay beforehand in order to avoid any last minute surprises.
Credit limit: It is advisable to check the available credit limit on your card to avoid penalties in transfers. You must also make sure that you maintain a low credit utilisation ratio in order to avoid any degradation of your credit score.
In conclusion, transferring money from a credit card to a bank account in emergency situations can be a life saver, but it comes at a price and with risk. It is better to evaluate your needs before transferring funds in order to avoid any unnecessary financial burdens. This way you can make informed decisions and keep a healthy credit profile while enjoying the perks of your credit card.
(Note: Using a credit card carries its own set of risks)
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