Credit Cards come with a contingency to transfer immediate funds to your UPI ID or bank account so you can use the cash or available funds for your emergency expenses. This cash is treated as borrowed money from your Credit Card, which attracts high rates of interest and steep penalties if not paid back on time. Using your Credit Card for immediate bank transfers has both benefits and drawbacks. Read on to learn more about how to transfer money from credit card to bank and its advantages and disadvantages.

How to Transfer Money from Credit Card to Bank Account?

If you have a decent credit limit and some emergency expenses to cater to, you can use your Credit Card to send money to your bank account. 

Here are some ways in which you can transfer money:

  1. Direct Transfers into your account
  2. Netbanking
  3. Through an ATM
  4. Visit the branch for a cash transfer or withdrawal

Benefits of Transferring Money from a Credit Card to a Bank Account

Using Credit Card cash advances or bank transfer options have the following benefits.

Ready Cash

For any kind of emergency medical expenses, loss of employment, job change, and unavoidable expenses, you can use your Credit Card for instant cash availability.

Less Time Consuming than Applying for a Loan

Applying for a loan instead of using your Credit Card can sometimes be time-consuming as it comes with documentation, wait times, and certain approvals. However, credit card cash advances and transfers offer a convenient alternative. With a credit card cash withdrawal, you can access funds quickly and easily without the need for a traditional loan application process. This option allows you to withdraw cash from an ATM or even transfer funds from your credit card to your bank account.

Credit card cash withdrawals are typically less time-consuming, providing you with immediate access to the funds you need. It’s important to note that cash advances usually come with additional fees and higher interest rates compared to regular credit card transactions, so it’s advisable to use them sparingly and consider other financial options whenever possible.

Hassle-free procedure

Using your Credit Card for urgent cash is convenient as it comes with no application procedure, approvals, documentation, or wait time. It is as easy as withdrawing money from your ATM Card or transferring funds from one account to another.

Convenience and flexibility

Utilising a Credit Card to transfer funds to a bank account offers convenience and flexibility. You can use the money as required, whether for bills or other financial obligations.

Drawbacks of Transferring Money From a Credit Card to a Bank Account

Retrieving cash or bank transfers using a Credit Card has the following drawbacks:

High Rate of Interest

The interest metre starts running when you withdraw or transfer funds using a Credit Card. The interest rate applied for such transactions can be quite significant. Thus, consider this option as a last resort.

Cash Advance fee

Several financial institutions levy a fee for transferring funds to your bank account or withdrawing cash. This comes as an extra expense.

Limited grace period 

Compared to regular Credit Card purchases, cash advances usually do not have a grace period. Interest starts accruing immediately, leaving you with less time to repay the borrowed amount without incurring interest charges.

Potential for a debt cycle

If the borrowed amount is not paid back on time, it can lead to a debt cycle. High-interest rates and minimum payment requirements can make it difficult for you to pay off the balance, leading to long-term financial difficulties.

Should You Transfer Money From Your Credit Card to Your Bank Account?

In case of an emergency, you can use this readily available option instead of waiting for a long time to get money from other sources. However, considering its pros and cons, you must only stick to emergency cash advances instead of indulging in leisure or pleasure withdrawals. Making an instant Credit Card payment online is recommended as soon as you have the available funds.

The fees for using cash advances are high. But, if you have funds available and are confident that you can repay the cash advance on time, you can use the bank transfer or cash withdrawal option using your Credit Card.

Does Transferring Money from a Credit Card to a Bank Account Hamper Your Credit Score?

Cash or bank transfers through Credit Cards do not directly impact your credit rating. However, exceeding your CUR (Credit Utilisation Ratio), failing to repay the money soon, or accumulating high-interest charges may affect your credit score.

Conclusion

By now, you might have a clear idea of how to send money from a Credit Card to a bank account. Considering a Credit Card for cash advances or bank transfers is a personal choice, and the pros and cons depend on how you treat these advances. If you are a responsible buyer with a good or satisfactory repayment history and tend to repay the cash advance promptly, this is a great way to pay for emergencies.

However, not paying the cash advances on time can lead to high risk, high-interest charges, and accumulated debt. So consider all the available options and be smart when using your Credit Card for bank transfers.