As helpful as credit cards are in the financial world, the problem is that they cannot be used for certain types of transactions. Want to make a payment for stocks, life insurance, or mortgages? Definitely not with a credit card. This leaves you with no option but to seek ways to withdraw money from credit card online. So how do you do this?
In this article, we have done the findings on your behalf and identified some of the ways to access your credit card’s cash—online.
Here we go…
How to withdraw money from credit card online
Withdrawing money from a credit card is typically called a cash advance. And cash advances usually come with fees and higher interest rates than other credit card purchases/transactions.
Fortunately, you’re not stuck with cash advances as your only option for getting money out of your credit card. You can use other indirect workarounds to get money from your credit card. But one thing you must note is that the majority of these workarounds or methods involve transferring money directly from your credit card to a bank account. And a major plus is that transferring money directly from your credit card to a bank account helps you to avoid the high fees associated with cash withdrawals from credit cards.
There are two situations you might encounter when trying to transfer money from a credit card to a bank account.
Here they are:
- You have the option of sending money from your credit card to a bank account.
- You do not have the option of sending money from a credit card to a bank account.
Let’s go deeper:
You have the option of sending money from your credit card to a bank account:
1. Direct transfer to your bank account
You have a couple of options when it comes to sending money from your credit card to your bank account to withdraw money from credit card online. One way is to use your smartphone or an online banking app for a direct transfer. However, each bank has its own daily transfer limits (the maximum amount that you can spend on your card, set by the credit card issuer).¹ To get all the details, it’s best to check with your specific bank.
When you transfer money from your credit card to your bank account, there might be some delays involved. If both accounts are with the same bank, the transaction can be instant. But if they are with different banks, it could take a bit longer, typically around 2-3 days.
The speed of the direct transfer depends on factors like the amount being transferred, the country, the currency, the regulations of the bank, the time of day, and the bank’s business hours.
2. Internet banking
You can also use your credit card’s online account to transfer directly to your bank account. But the transfer charges usually vary from bank to bank. So, it’s worth checking with your bank before doing this.
Here’s how to use the internet banking platform:
- Open your bank’s website.
- Log in to your credit card account.
- Choose the transfer option.
- Enter the amount you want to transfer.
- Fill in the required details mentioned in the form.
- Follow the given instructions to complete the transaction.
3. Phone call
In situations where you do not have internet access, a phone call may also be used to withdraw money from credit card online. This will also involve transferring money from your credit card to your bank account. Simply follow these instructions:
- Give your credit card company a call.
- Request a fund transfer.
- Confirm the amount you want to transfer to your bank account.
- Provide the bank account number and other required details.
- Follow the prompts to complete the transaction.
4. Mobile apps and digital wallets
Money transfers are becoming rapid and simple thanks to several smartphone apps. Mobile apps and digital Wallets allow you to make transactions quickly and securely. All you need to do is to link your bank account and complete a KYC (Know Your Customer form)² to unlock some premium features. These apps are usually compatible with iOS and Android smartphones. Paypal and Cash App are good examples of such apps that allow you to withdraw money from credit card online.
One of the biggest payment services gives users the option of transferring money to another person or their other PayPal account using a credit card. This is an almost instant type of credit card funds transfer.
However, the only issue is the processing fee. PayPal charges 2.90% + a fixed fee of 5.00% (minimum international fee of 0.99 USD or a maximum international fee of 4.99 USD).³
Meanwhile, it might work for you if you set up a PayPal business account and create an invoice and sent the link to yourself, then pay the invoice with a card of your choice. After clicking the invoice link, you may see the option of guest checkout. There’s a Paypal fee that’s unavoidable, but at least you should get away with 0% APR.
b. Cash App
Very similar to PayPal, Cash App also allows you to withdraw money from credit card online. But you need to keep in mind that Cash App will charge you a 3% fee every time you use your credit card to send money. So, if you send someone $100 with the Cash App through your linked credit card, then you’ll pay $103.
Now, sending money via your linked credit card on PayPal and Cash App is quite simple. Here’s all you need to do:
- Enter the recipient’s (or your alternate account’s) phone number, email address, or $Cashtag if you’re using Cash App
- Input the desired amount you want to send
- Add a note (optional)
- Review the details and confirm the transaction
- And the funds are transferred to the recipient’s PayPal or Cash App account via your linked credit card
If you do not have the option of sending money from a credit card to a bank account:
5. Writing a cheque
There’s a convenient option called ‘cheque to self’ where you can write a cheque to yourself. The funds are taken from your credit card and transferred to your bank account. Here’s how to do it:
- MWrite the name of the payee as ‘self’ on the cheque.
- Fill in the other necessary information as you would normally when writing a cheque.
- Deposit the cheque at your bank branch.
The charges for this service will depend on the cheque collection and deposit charges set by your bank.
5. ATM Cash advance or withdrawal
You can use the ATM cash advance facility to withdraw money from credit card. This method works by withdrawing cash from an ATM using your credit card and then depositing that amount into your bank account.
However, there are fees associated with withdrawing cash using a credit card, known as cash advance fees. And these fees vary from bank to bank.
Follow these steps:
- Withdraw cash from an ATM using your credit card.
- Deposit the cash at your bank’s branch.
You might even be able to withdraw from your credit card with no PIN.
What are the other transfer options I Have?
NEFT and RTGS
Lastly, you can also use NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) to send funds to your bank account.
Visit your bank and request a transaction form. Fill out the form with the required information and submit it to the bank personnel in charge.
A lot of other websites will simply call it a day with credit card transfers, after all, you now know what you need to know about these types of transactions. However, we’d take it a step further and talk about some of these things you didn’t even factor into the equation that might define your credit card to bank account transfer experience.
What to know
Here are a few things to keep in mind when you’re sending money from your credit card to your bank account:
a. Check the fees
Make sure you know the fees involved in the transfer. Look out for transaction fees or cash advance fees that could apply. Compare different options to find the most affordable one.
b. Know the limits
Find out the daily transfer limits set by your bank. This will ensure that your transfer amount falls within the allowed range and avoids any issues.
c You could be subject to scrutiny
Financial laws require banks to notify the relevant authorities whenever unusual transactions are carried out by an individual. Credit card transfers are included in this. So, your credit card transactions such as these could subject you to scrutiny from the income tax agency and other authorities keeping an eye out for illegal activities.
d. Expect potential delays
Keep in mind that if your credit card and bank account are with different banks, it might take a bit longer for the transfer to go through. It could take around 2-3 days in such cases.
e. Keep an eye on your credit card balance
Stay on top of your credit card balance and ensure that the transfer amount doesn’t exceed your available credit limit. You don’t want to end up with more debt than you can handle.
f. Keep records
It’s a good idea to keep a record of your transaction details, like dates, amounts, and reference numbers. Save receipts or confirmations as well, as they can come in handy later if you need to refer to them or resolve any issues.
g. Late payment penalties
When credit card bills are not paid on time after the statement is created, penalties are imposed. The penalty typically ranges from 3 to 4% per month, added to the balance owed.
h. Increased cost of transferred funds
Money transfers from a credit card to a bank account are usually regarded as illegally obtained funds, and the transferred funds will incur significantly higher charges compared to legal methods of obtaining funds.
i. Choose secure channels
Stick to trusted and secure platforms or methods for your transfer. Check if the platform or app you’re using has good security measures in place to protect your financial information.
j. Double-check account details
Before hitting that transfer button, double-check the bank account details you’ve entered. Make sure the account number and recipient’s name are correct. Small mistakes could cause delays or even send the money to the wrong account.
How much can I send from credit card to bank account?
The actual amount you can send from a credit card to a bank account depends on the specific bank and its daily transfer limit. But make sure that the transfer amount doesn’t exceed your available credit limit.
How can I transfer from credit card to bank account instantly?
For an instant transfer of funds from your credit card to your bank account, you can use a smartphone, laptop, or any available online banking app.
How can I transfer from credit card to bank account for free?
Some mobile apps allow users to transfer money from a credit card to a bank account for free. But you would need to do some research on this, as most apps that offer free transfers usually have a caveat attached to them.
Can you send money to someone with a credit card?
Yes, it is quite possible to send money to someone using a credit card. However, the available methods may vary depending on the credit card provider.
Is it safe to withdraw money from credit card?
While it is safe to withdraw money from a credit card, this type of transaction is generally not recommended. It comes with higher fees and interest rates that can add up quickly and make it challenging to repay the outstanding balance.
The best way to avoid these fees is to transfer to a bank account first and then withdraw the funds from your bank account. But then again you need to keep in mind that money transfers from a credit card to a bank account are referred to as illegally obtained funds, and this type of transaction comes with expensive charges compared to other more ‘usual’ financial transactions. So, the best thing is to use this option sparingly.
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