How To Transfer Money From Credit Card To Bank Account?

A credit card to bank transfer allows you to access funds when card payments are not accepted or when urgent cash is required. However, most issuers treat this as a cash-linked transaction with higher fees and interest. Understanding how to transfer money from credit card to bank account helps you choose the right method and avoid unnecessary costs.

Key Highlights

• Credit card to bank account transfer is treated as a cash advance and usually attracts higher interest and fees.
• You can transfer money from a credit card to bank using net banking, e-wallets, Western Union, MoneyGram, phone call, ATM cash advance, or cheque-to-self.

What is a Credit Card Cash Advance?

A credit card cash advance is a facility that allows cardholders to withdraw cash or transfer funds from their credit card limit. When you move money through a credit card to bank account transfer, it is usually classified as a cash advance and attracts higher interest rates and processing fees compared to regular card purchases.

How to Send Money From Credit Card to Bank Account?

There are several online and offline ways to transfer funds from a credit card to a bank account. Each method differs in cost, speed, and convenience.

Transfer Money From Credit Card to a Bank Account

Each transfer method works differently. Given below are the detailed steps:

Net Banking 

Here are the steps to transfer money directly from your credit card to your bank account through your net banking account:

• Visit your bank's website.
• Log in to your credit card account.
• Select the transfer option.
• Enter the desired transfer amount.
• Fill in the necessary information as indicated in the form.
• Follow the prompts to complete the transaction.

Fees: 2%–3% of the transferred amount

Interest: 30%–42% per annum (charged from transaction date)

Cheque 

You can use the ‘cheque to self’ option to transfer funds from your credit card to your bank account. Follow the given steps: 

• Specify the payee as 'self' when writing the cheque.
• Complete the cheque with the required information, following the usual procedure.
• Deposit the cheque at your local bank branch. The funds will be transferred from your credit card to your bank account. 

Fees: Processing fee as per issuer (usually similar to cash advance)

Interest: 30%–42% per annum

Phone Call 

If you require instant cash and lack internet access, a quick transfer is just a phone call away. This is one of the direct ways to send money from a credit card to a bank account.  Fees for transferring funds from a credit card to a bank account over the phone will reflect the fees charged through Internet Banking. Follow the steps below:

• Place a call to your credit card company. 
• Request a funds transfer.
• Verify the amount you want to transfer to your bank account.
• Provide the necessary bank account details and other required information.
• Follow further instructions to complete the transaction.

Fees: Same as net banking or cash advance fees

Interest: 30%–42% per annum

ATM Cash Advance 

You can also use an ATM for the fund transfer. However, you should be aware of the associated charges: 

• Use the ATM cash advance function by withdrawing money from an ATM using your credit card.
• Transfer the selected funds to your bank account by depositing at one of your bank's branches.

Fees: 2.5%–3% of amount or minimum ₹300–₹500

Interest: 30%–45% per annum

e-Wallet 

Here are the steps to transfer funds from your credit card account to your bank account using e-wallets like Paytm, Freecharge, MobiKwik, etc:

• Register using the e-wallet of your preference.
• Open the e-wallet application and go to the 'Passbook' section.
• Select 'Send money to bank' from the available options.
• Choose the ‘Transfer’ function in the menu shown.
• Enter the required amount, the beneficiary's account number, and IFSC details.
• Click the 'Send' button to initiate funds transfer to your bank account.

Fees: 2%–4% depending on wallet provider

Interest: Treated as cash advance by most issuers

Western Union

Here are the step-by-step instructions for transferring funds from a credit card to a bank account using Western Union:

• Get started by registering for free with Western Union.
• Select the destination country, enter the transfer amount and choose the delivery method (in this case, transfer to a bank account).
• Choose ‘Bank Account’ as delivery mode and enter the recipient's bank account details.
• Use your credit card to initiate the transaction.
• You will receive a confirmation and a tracking number, also known as a Money Transfer Control Number (MTCN), via email.
• The transfer of funds to the recipient's bank account will take place.

Fees: Transfer fee + currency conversion charges

Interest: Cash advance interest applicable

Note: Direct bank transfer depends on factors such as amount, destination country, currency, bank regulations, time of day and business hours. Western Union usually completes the transfer of funds from your credit card to your account within 1 to 5 business days.

MoneyGram 

To transfer funds from your credit card to a bank account using MoneyGram, follow these steps:

• Select the recipient and the country where the bank account is located, including the recipient's full name. If you are transferring to your own account, please include all required account information, including your full name.
• On the screen, select ‘Deposit to account’ and enter the transfer amount.
• Select 'Credit Card' as payment method to proceed with payment. The screen will show the exchange rate and any associated costs if the transaction involves multiple currencies.
• Provide specific information about yourself as the sender to verify the transaction.
• Enter the recipient's name, bank account details and other necessary information.
• Check all the details to ensure accuracy and once everything is fine, the funds will be successfully transferred to your bank account.

Fees: Service charges vary by country and amount

Interest: Cash advance interest charged by card issuer

Reasons to Transfer Money from Credit Card to Bank Account

Here are the various reasons why you may need to transfer money from your credit card to your bank account:

• Credit cards may not be accepted for certain transactions, such as life insurance or mortgage payments. To overcome these limitations, transferring funds from your credit card to your bank account enables seamless processing of such transactions. 
• You may need immediate access to funds for unexpected emergency expenses or urgent financial needs. In such cases, a money transfer from your credit card to your bank account will help you get the funds.
• You may need money urgently to capitalize on an investment opportunity. Quickly sending money from a credit card to a bank account will allow you to invest on time.
• You may have to transfer money from your credit card to your bank account to cover your travel expenses while travelling abroad.
• You can transfer money from a credit card to a bank account to get funds for bill payments, such as rent, water bills, gas bills or such expenses.
• When you need cash flow during a financial crisis, transferring money from your credit card to your bank account is very efficient.  

Precautions For Sending Money From Credit Card to Bank Account

Here are some key things that you should consider before sending funds from your credit card to your account: 

• Credit card purpose: Use credit cards primarily for direct payments; consider transferring money to a bank account only in urgent cases.
• Credit score: Frequent transfer of money from your credit card to bank account can negatively impact your credit score since they increase your credit utilization ratio.
• Fees: Check transfer fees; many credit card companies charge fees for money transfers. These fees are usually a significant percentage of the transferred amount, ranging from 2.5% to 3%.
• Interest rates: Transferring money from your credit card to bank account attracts interest from the day of the transaction. These interest rates are usually higher than the regular purchase interest rates. 
• Sufficient credit limit: Before transferring, make sure your credit card has enough available credit to avoid additional fees and penalties.
• Transfer limit: Be aware of any transfer limits set by your credit card issuer to avoid surprises and give you peace of mind.
• Beneficiary details: Ensure to enter the correct beneficiary details, such as beneficiary name, account number, branch, etc.

Now that you know how to transfer amount from credit card to bank account, you can choose the most convenient method based on your urgency and fees involved. While credit card to bank transfers offer quick access to funds, they should be used carefully due to high interest and charges. Always compare methods, understand costs, and maintain healthy credit habits.