How To Transfer Money From Credit Card To Bank Account?

You can transfer amount from credit card to a bank account to access funds when card payments are not accepted or when urgent cash is required. However, most issuers treat it as a cash advance, which attracts higher interest rates and processing fees. 

Key Highlights

• Credit card to bank transfer facility: Usually treated as a cash advance 
• Ways to transfer amount from credit card to bank: Net banking, e-wallets, Western Union, MoneyGram, phone call, ATM cash advance, or cheque-to-self. 
• Processing fee for credit card to bank account transfer: 2%-4%, depending on the method of transfer
• Interest on transfer: 30%-40%, depending on the method of transfer

Can You Transfer Money from a Credit Card to a Bank Account?

Yes, most banks allow you to transfer money from a credit card to a bank account through a cash advance facility or an approved funds transfer service.

A cash advance allows cardholders to withdraw cash or transfer funds against their available credit card limit, and such a credit card to bank account transfer is usually treated as a cash advance rather than a regular purchase. However, cash advances usually attract higher processing fees and interest charges than regular credit card transactions.

Best Ways to Transfer Money From a Credit Card to a Bank Account

There are several ways to transfer money from a credit card to a bank account, but each method differs in processing time, fees, and convenience. The table below helps you choose the most suitable option based on your requirements.

How to Transfer 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. 

I. 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)

II. 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

III. 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

IV. 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

V. 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

VI. 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.

VII. 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

Who Can Transfer Money from a Credit Card to a Bank Account?

Anyone can transfer money from a credit card to a bank account if their credit card issuer offers a cash advance or fund transfer facility. 

If you want to transfer money from a credit card to a bank account, you will need:

• An active credit card with a cash advance facility.
• Sufficient available cash advance or credit limit.
• A valid bank account to receive the funds.
• Any required KYC verification completed (if applicable).

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:

• Used when credit cards are not accepted for payments like insurance or loan instalments.
• Helpful for urgent cash needs or emergency expenses.
• Enables quick access to funds for time-sensitive investment opportunities.
• Useful for covering travel expenses, especially while abroad.
• Helps manage regular payments such as rent and utility bills.
• Provides short-term cash flow support during financial stress.

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 usage: Use transfers only in emergencies; credit cards are best for direct payments.
• Credit score impact: Frequent transfers increase credit utilisation and may lower your credit score.
• Fees: Most issuers charge transfer fees of around 2.5%–3% of the amount.
• Interest rates: Interest applies from the transaction date and is higher than purchase rates.
• Available limit: Ensure sufficient credit limit to avoid penalties or failed transfers.
• Transfer limits: Check issuer-specific transfer limits before initiating the transaction.
• Beneficiary details: Enter correct bank and beneficiary details to prevent delays or failures.
• Credit card purpose: Meant for purchases; transfers are usually treated as cash advances, thus, use only in emergencies.
• Income tax implication: Frequent transfers may attract scrutiny from the Income Tax Department. 
• Dues on credit card: Ensure to pay credit card bill as failure to pay dues on time can negatively impact credit history and credit score. 

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 offers quick access to funds, they should be used in certain situations, especially in case of an emergency, due to high interest and charges. Always compare methods, understand costs, and maintain healthy credit habits.