A Comprehensive Guide on How to Transfer Money from a Credit Card to a Bank Account in India

Credit cards have been convenient for many to have on hand and extend credit when necessary.

However, sometimes, you must transfer money from your credit card to your bank account. Whether bill payments, personal expenses, or urgent needs, transferring cash from credit cards to a bank account would work wonders. Several options are available within India to carry out the said process, and each has steps, fees, and deliberations associated with it.

In this article, we will detail the best ways of transferring money with a credit card to a bank account in India, although a few ways are available in other countries, just for comparison. We will also explore the pros and cons of each, plus some tips to ensure a smooth transaction.

How to Transfer Money from a Credit Card to a Bank Account in India

Using a Mobile Wallet

Mobile wallets are among the most sought-after mediums in India at present to transfer money from your credit card to a bank account. This is easily enabled through the websites Paytm, Mobikwik, and Freecharge, hence making it an easy and quick process.

Steps:

Download and install an authentic mobile wallet app like Paytm, Mobikwik, or Freecharge.

Complete the registration using your phone number and email I.D.

Add your credit card details in the "Add Money" section.

Load the desired amount of money into your wallet from your credit card. Once the funds are credited to the mobile wallet, proceed to the "Transfer to Bank" or "Withdraw" option. Fill in details of the bank account into which you want to transfer the amount, including account number, IFSC code, and bank name. Confirm the transfer and wait for the transaction to go through.

Pros: This is an instant transfer of money. Most of the wallets will have the facility for multiple credit cards. Cons: There is a nominal charge for fund transfer from the wallet to the bank account. The daily transfer limit is low, INR 5,000 to INR 10,000 approximately. Bank Direct Transfer [Card-to-Bank Facility]

Some banks in India offer a direct transfer facility from a credit card into a savings account through net banking or the bank's mobile application. This service, however, will attract higher charges or interest since it falls under cash advance.

How to do it:

Log in to your net banking website or mobile application given by your bank.

The section for "Credit Card" would be selected here; you must click further on "Transfer to Bank Account" or "Cash Advance." Select the amount of money you want to transfer. Be sure to stay within the credit balance limit. Add the receiving bank account details. Confirm this transaction. This may take 24 to 48 hours to appear in an account. Pros: Quite secure and reliable. A lot faster processing time. Cons: Higher fees and interest rates could be applied since this may fall under a cash advance.

It is not available in all banks.

Third-Party Money Transfer Services

Third-party money transfer services such as Western Union MoneyGram and other online money transfers have made transferring cash from credit cards to bank accounts easier. Although these are generally utilized for cross-border money transfers, some work in India.

How it works:

Sign up on a credible money transfer website like Western Union or MoneyGram.

Select "Send Money" or "Transfer to Bank".

Select and choose "Credit Card" as the payment option.

Enter the beneficiary bank account details, account number, and IFSC code.

Execute the transaction and wait for the facilitation of funds, which may take a few hours or days based on the service utilized.

Pros:

Ideal for fund transfers across borders.

Thus, even when banks refute direct credit card transfers.

Cons:

Relatively costlier than other modes.

Takes more time to process a few transfers.

Balance Transfer Feature

Some credit cards also have balance transfer facilities whereby, for a fixed period, you can transfer money into your bank account with minimum interest. This helps repay high-interest debts or large expenditures.

How it works:

Find out from your credit card provider if such a balance transfer facility exists in the first place.

Apply for the balance transfer online from the website or customer service helpline.

State the amount you want to transfer and the bank account number into which you want the money transferred.

Wait for approval, which may take some days, before the money hits your account.

Pros:

Low or no interest rates during the promotional period.

Large transfers or debt payments can be allowed.

Cons:

It requires approval from the bank.

Promotional rates are for a limited time.

International Means: How the Rest of the World Transfers Money into the Bank from a Credit Card

As shared above, India has specific ways to transfer cash from a credit card to a bank account. However, doing this in other parts of the world is very different. The following information highlights how it goes down in popular regions:

United States

Within the U.S., services such as PayPal, Venmo, and Square Cash allow users to transfer funds from a credit card into their bank account balance. The fee on each transaction can be around 2 to 5% of the money one is moving over.

U.S. Steps:

Link your credit card through the app you have chosen.

Transfer directly from the credit card into the balance.

Withdraw the cash from within the app into your bank account; this generally carries a small fee, which is attached.

United Kingdom

In the U.K., banks will more often than not provide similar facilities as in India, whereby through online banking, there is the ability to directly transfer funds from a credit card to a savings or current account. In addition, this is made possible through mobile wallets such as Revolut and Monzo.

Australia

Most banks in Australia have a service that transfers directly from a card to a bank. In most cases, these are treated as cash advances. To manage these transfers, customers can also use various payment platforms, such as PayPal or bank-specific apps.

 

Things to Consider Before Transferring Money from a Credit Card to a Bank Account

Before the transfer of money from a credit card to a bank account, there are a couple of things you should consider:

 

Interest Rates: Most credit card companies treat such transfers as cash advances, and just like with most credit cards, these types of transactions are usually assessed at higher interest rates than regular purchases. It is necessary to determine the interest rate for your transfer.

Transfer Fees: All the methods to make transfers have different charges. The mobile wallet charges around 2% to 3%, and direct bank transfers or third-party services charge even higher. Compare this to paying an adequate amount.

Credit Limit: Make sure you have adequate credit on the card you are dealing with before trying to make a transfer, especially when wanting to withdraw a large sum of money.

Repayment Terms: Transfers made from credit cards generally have to be returned with interest if not paid back within the interest-free period, if any. Ensure you will have a means to pay off the transferred amount in time.

Frequently Asked Questions

Can I send money from my credit card to a bank account in India without a fee?

While there is a way to avoid fees, a balance transfer with a promotional interest rate can dramatically reduce costs.

How long does a credit card to bank account money transfer take?

The time taken for the transfer to take place varies from an instant - in the case of mobile wallets - to as long as 48 hours in the case of bank direct transfers.

Is using a mobile wallet safe to transfer money from a credit card to a bank account?

Yes, most reliable mobile wallets in India use encryption and secure methods to keep your financial data safe. Paytm and Mobikwik are examples of these.

Are there any limits on how much I can transfer from a credit card to a bank account?

Mobile wallets have daily limits, usually from INR 5,000 to INR 10,000. The transfer to a bank may allow a more significant amount but can be restricted based on your credit limit.

Does transferring money from my credit card affect my credit score?

Cash Advances or too-frequent big transfers will impact your credit utilization ratio, negatively impacting your credit score if not handled well.

Can I use international services to transfer money from an Indian Credit Card to a Bank Account?

This is possible through some service providers such as Western Union and MoneyGram. However, they may charge higher fees and take longer to process than usual.

Conclusion

Transferring money from a credit card to a bank account in India is expedient. Understand various methods, including mobile wallets, direct bank transfers, and third-party services offering quick access to funds. You can choose a seamless and cost-effective option by comparing fees, interest rates, and processing times.