Back in 2018, credit card usage in POS grew by 25% YOY. During this time, the total amount of transactions grew by 32% to become more than Rs. 47,000 Crore. This amount was an increase by more than Rs. 230 Crore.
Credit cards have all but eliminated the need to carry cash on a regular basis. You can even convert your high value purchases into several EMIs and pay for them conveniently.
However, there are some specific instances where credit cards are not a valid payment option, such as EMI payment of car loans or home loans.
For such instances, you must use other modes of payment such as cash or debit cards. It is, therefore, paramount that you know how to transfer money from credit card to bank account.
Some of the most popular options are elaborated below:
Take out cash from an ATM
Some of the best credit cards, such as the Bajaj Finserv RBL Bank SuperCard, enable cardholders to withdraw cash from ATMs. You can withdraw cash up to your unutilised credit card limit. You can then deposit that cash to your account. Most financial institutions have now even enabled ATM machines with cash deposit facility as well.
Use wire transfer
Wire transfer is one of the oldest and most secure ways of sending money from one account to another worldwide. Leading financial institutions and transfer facilitators like Western Union and MoneyGram have now integrated credit card into the wire transfer infrastructure. Do note that wire transfers through credit cards generally attract high fees.
E-wallet services like Paytm, MobiKwik and FreeCharge have grown exponentially over the last few years. One of the primary reasons behind the same is the number of features they come with.
These services even allow users to transfer money from their credit card to their account. You have to go to the relevant options and update details like the account number, amount and IFSC code for the transfer.
Make sure the company offers money transfers through e-wallets before you opt for their credit card apply online facility.
Other online services
There are a few other online money transfer services like PayDeck, which also allow for fund transfer from credit cards to savings accounts. However, an individual cannot transfer money to his/her own account with these facilities. Also, you will need to update your PAN with the app to avail this facility.
Things to consider before transferring money from credit card
Although most credit cards allow for the transfer facility, it is not the primary objective of credit cards. Therefore, there are certain things you should consider before opting for a credit card online apply procedure:
- Note that most of these transfer facilities come with hefty fees. As such, try to avoid it as much as possible.
- Make sure that you clear your credit card dues within the stipulated time. Defaulting will attract a monthly fine of up to 3 to 4%. If you leave it unpaid for a few months, the interest accrued will make the entire procedure unfeasible. So, you must learn how to reduce your credit card interest and save money.
- Financial organisations are obligated to report money transfer or cash utilisation of more than Rs. 2 Lakh to the Income Tax Department. It may warrant undue attention to your financial activities by the relevant authorities.
There are several financial institutions that offer credit cards with allow for the money transfer facility. NBFCs like Bajaj Finserv even provide pre-approved offers on credit cards, which make the application process substantially quicker and hassle-free. You can avail these offers on personal loans, business loans and home loans, along with a suite of other financial products. Take a look at your pre-approved offer by submitting a few essential details with the financial institution.
Now that you are aware of how to transfer money from credit card to bank account, avail the facility only when you are in utter need. Use your credit card wisely and avoid doing money transfer to account for indulgences.