Want to transfer money from your credit card to your bank account? Here’s everything you should know

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Money at your fingertips, all the time.

Credit cards act as a lifeguard when you need money in a pinch. But sometimes credit cards cannot be used for certain transactions. Payment for mortgages, stocks, money orders are all such examples that do not accept a credit card payment. In such a scenario, you can always transfer money from your credit card to your bank account. Here’s all that you need to know about such a transaction.

When it comes to transferring money from a credit card to a bank account, there are 2 situations you might encounter.

  1. When banks allow you to make a credit card to bank account transfer.
    You can do a direct transfer with the bank through net banking, money transfer credit card or phone call or indirectly using an e-wallet that is linked to your bank account.
  2. When banks restrict you to make a credit card to bank account transfer, you can transfer money using cheques or ATM cash advances.

Direct Transfer to Bank Account

You can transfer funds from your credit card to your bank account directly using the net banking app or even over the phone. Since the daily and monthly transfer limit varies from bank-to-bank, you would need to check that with your bank to get the updated information. If you are transferring funds to an account with the same bank as that of the credit card, the transfer is almost instant. However, if the transfer is to an account with another bank, then it should take two to three business days. 

Net Banking

Money can be transferred by directly accessing your credit card’s online banking account.

What is the procedure?

Step 1: Open your bank’s website

Step 2: Log in to your credit card account

Step 3: Select the transfer option

Step 4: Enter the amount you want to transfer

Step 5: Enter the required details mentioned in the form

Step 6: Follow the prompts to complete transactions

What are the charges?

The charges for making a transfer from a credit card to a bank account varies from bank to bank.

Phone Call

If you need the cash immediately, and do not have access to the internet, the transfer is always a phone call away.

What is the procedure?

Step 1: Call your credit card company

Step 2: Request for a fund transfer

Step 3: Confirm the amount you want to transfer to the bank account

Step 4: Provide the bank account number and other details required

Step 5: Follow the prompts to complete the transaction

What are the charges?

The charges for making a transfer from a credit card to a bank account through a phone call will be the same as the amount charged via net banking.

Indirect transfer to bank account

E-wallets like Paytm and PayZapp are digital wallets that allow you to make transactions quickly and securely. These are linked to your bank account and require a KYC to be completed. 

Paytm

Paytm also allows you to send credit card money to your bank account. However, you will have to add money to your Paytm Wallet and then transfer the money to your bank account. You can send any amount between INR 100 and INR 25,000.

What is the procedure?

Step 1: Add money on Paytm Wallet

  • Open the app and click on the option ‘Add Money’
  • Enter the amount to transfer
  • Select ‘credit card Method’ and fill your card details

Step 2: Transfer money to bank account through Paytm

  • Open the app and click on passbook options
  • Click on ‘Transfer to Bank’ option
  • Fill your bank details
  • Enter the amount to transfer
  • Hit ‘Send’ to complete the transfer

What are the charges?

Adding money in your Paytm Wallet has no fee. However, there is a 4% charge1 levied when you transfer funds from your Paytm Wallet to any bank account. 

PayZapp

PayZapp is another mobile payment app that allows you to shop online and securely transfer money to your account or to anyone in your contact list. Any amount up to INR 5,000 can be transferred daily, with the total limit being INR 1,00,000 per month. You can only make the transfers between 3 AM to 9 PM.

What is the procedure?

Step 1: Open the app and click on pay/send money

Step 2: Click on the bank icon and fill the necessary details including the amount you wish to transfer

Step 3: Click ‘Continue’ to complete the transfer

What are the charges?

There is a 2.36% service charge applicable that includes GST.

What are the other transfer options do I have?

If your bank does not allow you to make a transfer from your credit card to the bank account, don’t sweat, there are some accepted hacks around this. Here are a couple of options you can consider:

Cheques

There is a facility known as ‘Cheque to Self’ where you can write a cheque to yourself. The money is taken from your credit card and is transferred to your bank account. 

What is the procedure?

Step 1: Include the name of the payee as ‘Self’ 

Step 2: Include other necessary information as you normally would while writing a cheque

Step 3: Deposit the cheque at your bank branch

What are the charges?

The applicable fees and charges will depend on the cheque collection and deposit charges levied by your bank.

ATM Cash Advance

ATM cash advance is a facility that allows you to withdraw cash from an ATM using your credit card and deposit that amount to your bank account.

What is the procedure?

Step 1: Withdraw cash using your credit card at an ATM

Step 2: Deposit the cash at your bank’s branch

What are the charges?

The fees and charges for withdrawing cash using a credit card are generally high and are called cash advance fees. For example, HDFC Bank charges 2.5% cash advance fees on the total amount withdrawn2 . The cash advance charges vary from bank to bank. 

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