Credit card usage has skyrocketed to meet daily financial needs and many users wonder how to transfer money from credit card to bank account instantly. Most of these people use their credit cards to make bill payments, shop, and for other utility needs. Many look for cheap ways to transfer their money to a bank account or a debit card that they can withdraw as cash.
Note : The purpose of writing this article is to help users understand the pros and cons of transferring money from credit cards for their needs. We do not encourage misuse and mismanagement of credit.
Here are some ways that you can transfer money from credit card to bank account:
Transfer money using a wallet
There are a lot of wallets in the market today that allow you to transfer money from credit cards to wallets for a range of fees (Free to 2%). While apps like PayZapp charge 0% fee, PayTM charges 2% for adding money into the wallet through credit cards. Many wallets recently added the fee after a trend of people rotating cash using credit cards.
Use apps that help you replace cash payments
Startups like PayDeck allow you to make transfers to bank accounts. People can use this tool to make direct payments using their credit card for rental payments, school fees, professional payments, etc where credit cards were not traditionally accepted. Although, technically, one can send money to their own account using apps like PayDeck, it is best avoided since your credit card issuing bank may deem this cash advance and charge the hefty cash advance fees on your account.
Make a cash advance from your credit card
The most expensive way to take out cash from your credit card is by withdrawing cash from your credit card at an ATM. Below are the fees you will have to incur:
- Cash Advance Fee: A cash advance fee is charged by the credit card issuer anytime a withdrawal is made at an ATM. Even if your ATM says a withdrawal might be free, the card issuer charges you for making a cash advance on a credit card.
- Cash Advance APR: Banks will continue to charge the interest APR on top of the cash advance fee.
- APR Additional charge: Some banks also levy an interest immediately from the date of withdrawal as opposed to the billing date. The billing date is the start of interest period for non-withdrawal credit card charges.
Cash advances are not recommended unless there is an unavoidable emergency. A personal loan is a better option in most circumstances. The fees and charges on credit cards are very high and add up quickly if bills are not paid on time.