In a world that requires money for almost everything we need, banks and financial institutions ensure that we have all the instruments to have access to cash. Owning a credit card gives individuals a sense of autonomy in their spending if they know how to use the tool well.
Essentially, you can borrow money from a bank without the high-interest rates, as long as you pay the credit card bill on time. Since we have already covered plenty of benefits that credit cards offer, you may already be familiar with most of them. But did you know there is one more feature of credit cards to give you liquidity? You can send money from a credit card to your bank! Now if you’re wondering how to transfer money from a credit card to a bank account, we’ve got your back! Read this article to know more!
Understanding Credit Card to Bank Transfer
What is a Credit Card to Bank Transfer?
Credit card to bank transfer is a service that allows you to transfer funds from your credit card to your bank account. It is also known as a cash advance or credit card cash withdrawal. This service can come in handy when you need cash in an emergency, and you don’t have enough balance in your bank account.
How Does Credit Card to Bank Transfer Work?
The process of transferring money from a credit card to a bank account is easy once you get the hang of the steps. It can be done by either visiting your bank or using your bank’s online banking services to initiate the transfer. Mentioned below are the steps for your understanding:
- Check if your credit card allows cash advances: Not all credit card companies and banks allow cash advances, so you should first check your credit card agreement to see if yours allows it.
- Check the available credit limit: Your credit card’s cash advance limit may be lower than your total credit limit. You can find this limit on your credit card statement or by contacting your credit card issuer.
- Check the fees and interest rates: Cash advances usually have higher fees and interest rates than regular credit card transactions. You should know the exact fees and interest rates associated with the transfer before initiating the transaction.
- Initiate the transfer: You can initiate the transfer online or by visiting your bank. Provide the bank with the necessary details such as the amount to be transferred and the bank account details.
- Wait for the transfer to be processed: The transfer can take several business days to reflect in your bank account. The processing time depends on your bank’s policies and procedures.
Eligibility Criteria
Credit Card Eligibility for Cash Advance
To be eligible for a credit card cash advance, you must have a credit card that allows cash advances. Some credit cards may also have minimum credit limits for cash advances. You should also have enough credit available on your credit card to cover the amount you want to transfer.
Bank Account Eligibility for Credit Card to Bank Transfer
Not every bank account can facilitate credit card transfers. Before initiating the transfer, you should ensure that your bank account is eligible to receive the transfer. Most banks require that the account be in the same name as the credit card. You may also have to provide your bank account number and routing number to initiate the transfer.
How to Transfer Money from Credit Card to Bank
- Online Transfer: Many banks offer online transfer services, which allow customers to transfer money from their credit card to their bank account. The process usually involves logging into your bank’s online portal, selecting the transfer option, and following the prompts to complete the transaction. This method is convenient and can usually be completed within a few minutes.
- Mobile App Transfer: This option allows customers to transfer money from their credit card to their bank account using their mobile devices. The process is usually simple and can be done quickly.
- ATM Transfer: You can visit an ATM, insert your credit card, and select the transfer option. However, this method can be more time-consuming and may come with additional fees.
- Over-the-Counter Transfer: Customers can also visit their bank branch and request a credit card to bank transfer. This method is useful for customers who are not comfortable with online or mobile app transfers. However, it can be more time-consuming and may require additional paperwork.
Charges and Fees Involved
- Interest rates and finance charges: Interest rates on cash advances are typically higher, and they begin accruing immediately. This means that you’ll start accumulating interest charges on your cash advance as soon as you make the transaction. Be sure to check your credit card’s terms and conditions to find out what interest rate you’ll be charged for cash advances.
- Cash advance fees: These fees are usually a percentage of the amount you’re transferring, and they can range from 2% to 5% of the total transfer amount. For example, if you transfer Rs 1,000 from your credit card to your bank account and your cash advance fee is 3%, you’ll be charged a Rs 30 fee.
- ATM withdrawal fees: If you choose to withdraw cash from an ATM using your credit card, you may be charged additional fees by both your credit card issuer and the bank with which the bank is associated. ATM fees can vary widely, so be sure to check with your credit card company to find out how much you’ll be charged.
- Late payment fees: If you don’t pay off your credit card balance in full each month, you’ll be charged interest on the remaining balance. In addition, if you miss a payment or make a payment after the due date, you’ll be charged a late payment fee.
Alternatives to Credit Card to Bank Transfer
- Peer-to-peer payments: Peer-to-peer payment platforms like Unified Payment Interfaces (UPIs) allow you to send money directly to friends and family using your credit card. These platforms typically charge a fee for credit card transactions, but the fee is generally lower than what is charged by credit card companies for cash advances.
- Digital wallets: Digital wallets like Google Pay and Apple Pay allow you to link your credit card to your mobile device, so you can make payments directly from your phone. Some digital wallets also allow you to send money to other users, although fees may apply.
- Personal loans: If you need to borrow money for a longer term, a personal loan may be a better option than a credit card to bank transfer. Personal loans typically have lower interest rates than credit cards, and they offer more structured repayment terms. However, it’s important to shop around and compare rates from multiple lenders to find the best deal.
Final word:
Once you have a grasp on how to transfer money from your card to your bank account, you can use this feature anytime you need to make bank transfers and are low on balance. Alternatively, it also acts as a very short-term loan when you urgently require funds! So what are you waiting for? Go ahead and take advantage of yet another awesome benefit that your credit card can provide!
