While credit cards are majorly used for making direct payments, either online or by swiping the card at a store. However, there may be situations where you need to pay in cash; which may involve additional expenses if you withdraw money from your credit card. Hence, for such times, you have the option to transfer money from your credit card to your bank account and then make the payment.
Now, you must be thinking about how this is possible.
Let’s find out in this blog!
Online Transfer of Money
There are multiple ways using which you can transfer money from your credit card to your bank account. In most cases, you need to download any mobile banking application, such as Paytm to transfer money from your credit card to your bank account.
Explained below are the steps to follow on Paytm mobile application-
- Register/Log in to the Paytm mobile application
- Transfer funds from your credit card to your Paytm wallet
- Next, click on ‘Passbook’
- Select the option of ‘Send money to bank’
- Click on ‘Transfer’
- Now, enter the details of the bank account to which you wish to transfer the money
- Verify your details and click on ‘Send’
- The amount will directly be transferred to your bank account
Alternatively, you can also use mobile banking/internet banking to make such money transfers.
Offline Transfer of Money
There are also a few offline methods to transfer money from credit card to bank account as explained below-
- You can use cheques to transfer money from your credit card to your own bank account. All you need to do is choose the option of ‘Cheque to Self’, enter the required details and deposit the cheque to your nearest bank branch. The amount will be transferred to your bank account in a few working days
- You may use your ATM card to make the transfer. Use the ATM cash advance facility to withdraw cash from the ATM. Next, you need to deposit this amount to your bank account
- Alternatively, you can choose to transfer money to your bank account using NEFT and RTGS. To do so, you may visit a bank and request for a transaction form. Fill the required details and submit the form to the concerned banking officials
Why should you NOT Transfer Money from Credit Card to Bank Account?
While transferring funds from your credit card to your bank account, you must be cautious of the following things-
- First of all, it is important that you avoid making transfers from your credit card to your bank account. This is because the main intent of a credit card is not to generate cash to your bank account, but to make direct payments
- Even though a credit card can be used to avoid the payment of additional charges on cash withdrawals from credit cards, banks report the customers who spend more than Rs. 2 lakh per year on their credit card to the Income tax department. Making frequent transfers from credit card to your bank account might bring you in the limelight and the Income tax department might want to keep an eye on you
- Along with this, failing to pay the credit card dues after receiving the generated credit card statement will cost you a fine of 3-4% on the outstanding amount, every month. This will eventually cost you much more than the amount that you would transfer from your credit card to your bank account
Even though there are certain restrictions involved in transferring funds from credit card to bank account, it is still okay to do in case of emergencies. However, excess of such transfers may land you into trouble. Such transfers are relatively cheaper than borrowing a personal loan or withdrawing cash using a credit card as these involve high interest charges. Hence, depending upon the access to mobile applications, and the amount of funds to be transferred, you may choose to transfer funds from your credit card to your bank account, as and when required.