How to Transfer Money from Credit Card to Bank Account

A credit card is a convenient payment tool that lets users make purchases without paying cash upfront. Even though this makes transactions easier, a credit card cannot be used to repay home loans, car loans, other credit card bills, etc. In such a situation, funds may be transferred from a credit card to a savings account using various means. However, these methods may involve high fees in one way or the other and should be used as a last resort and only in case of emergencies.

Read the complete article to know how to transfer money from a credit card to a bank account at a nominal fee or without any charges, transferring money from a credit card to a bank account online and offline, things to keep in mind and more.

Methods to Transfer Money from Credit Card to Bank Account

Normally, credit cards are used to pay for goods and services and it is not the primary 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 emergency financial requirements. The following are some of the key ways of transferring money from credit card to bank account online and offline:

Transferring Money from Credit Card to Bank Account Online via e-wallets Apps

The following are the key steps to transfer funds from your credit card to a bank account using e-wallets like PhonePe, MobiKwik, etc:

1. Register using the e-wallet of your preference.
2. Open the e-wallet App and go to the ‘Passbook’ section
3. Select the option: “Send money to Bank”
4. Select ‘Transfer’ option
5. Enter details such as the amount, account number and IFSC
6. Click on “Send” button and money will be transferred to the bank account

Note:

• The steps mentioned above are generic in nature and may vary from one provider to another.
• 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.

Money Transfer by ATM Cash Advance Facility

You can also use the ATM fund transfer option, if you wish to transfer money from your credit card to a bank account. Follow these steps to use ATM cash advance facility:

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

Step 2: Transfer the funds to a bank account by depositing at one of the bank’s branches.

Things to Keep in Mind while Transferring Money from Credit Card to Bank Account

Here are a few key things that you should consider when transferring funds from your credit card to a bank account:

• Interest Rates and Fees: There are certain transaction fees involved in transferring money from your credit card to a bank account. Cash advance is a loan and may incur higher interest rates and charges. 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 limit available on your credit card. Try not to exceed the sanctioned and available limit, as it may lead to penalties and additional costs.
• Transfer Limits: Be mindful of any transfer limits set by your credit card issuer to avoid surprises when this need arises.
• Purpose of Credit Card: Try and use your credit card only for its intended purpose, that is, direct payments. Consider transferring money to a bank account only in urgent cases and emergencies.
• Income Tax Considerations: Excessive use of credit cards may be reviewed by the Income Tax Department and may attract unwanted attention.
• Timely Repayments: In case you need to make the credit card transfer, ensure that you make your repayments on time to avoid adverse effects on your credit report and credit score.
• 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.

Note that transferring money from a credit card to bank account via e-wallet is considered a transaction and may involve charges. Whereas, the cash advance facility is considered a loan and may imply high interest rates and other charges. Therefore, it is highly recommended that you avoid using your credit card to withdraw cash or transferring to a bank account unless absolutely necessary or in case of emergencies.

FAQs on Money Transfer from Credit Card to Bank

Q. Is it safe to transfer money from my credit card to my bank account using apps like PhonePe or MobiKwik?

Yes, transferring money from credit card to a bank account using apps like PayPal or MobiKwik can be safe since these apps use encryption and other security measures to protect your data and transactions. However, it is important to be aware of the potential fees and interest charges associated with such transfers. 

Q. How does transferring money from a credit card affect my credit score?

Even though transferring money from your credit card to a bank account may not directly impact your credit score. Transferring more than your available limit or maxing out your credit cards, making late repayments or missed payments, etc. may have an adverse impact on your credit score and credit report. 

Q. What is the best way to transfer money from a credit card to a bank account?

In case you need to use the credit card transfer option, your e-wallets may may prove to be the most most convenient and safest option.

Q. Is it advisable to use a credit card for emergency cash by transferring to a bank account?

Ideally, you should avoid using your credit card for cash by transferring funds to a bank account since it is not its intended use and may involve heavy fees, charges and even penalties. However, in case of emergencies and time constraints you may consider using the option cautiously.  

Q. How do I transfer money from my credit card to a bank account online?

You can transfer money from your credit card to a bank account online using e-wallets like PhonePe, MobiKwik, etc.

Q.  Is there fees for transferring money from a credit card to a bank account?

Yes, there are usually fees associated with transferring money from credit card to bank account. These fees are may vary from a percentage of the transferred amount or may also include high interest rates that start accruing almost immediately.

Q. Which are some of the best apps that I can use to transfer money from my credit card to bank account?

Some of the best apps that you can use to transfer money from your credit card to bank account can be e-wallet apps like PhonePe, MobiKwik, etc.

Q. Is it better to use a personal loan or a credit card cash advance for emergency funds?

A personal loan may be better than a credit card cash advance since cash transfer is not the intended use of a credit card and may involve heavy fees. Moreover, a personal loan may give you access to more funds. However, you may have to use the credit card cash advance option is case of emergencies and urgent needs with time constraints.