Credit cards are also known as plastic money that are issued by banks to the customers, enabling them to make payments to merchants for products purchased. It is the best alternative to cash. There are many benefits provided on a credit card right from cashback, rewards, exclusive discounts to the conversion of regular purchases to Easy Monthly Installment payments using a credit card. Also, credit cards are more secure than debit cards and this is the reason that frauds related to credit cards are less frequent.
Note: While transferring funds from credit card to your bank account beware of regulatory issues and fees in the process of transfer.
Credit card payments are not accepted in certain circumstances such as
- Payment for Loans
- Payment for other credit card bills
In these situations, payments should be made from bank accounts. A credit card holder may have a higher credit limit but it does not give the option of utilizing credit for making above mentioned payments. To use the available credit on your credit card and make payments for loans and other bills you can transfer funds from the credit card to your Bank account.
Fund transfer from credit card in UAE to your bank account is possible. If you have a credit card with a high interest rate then it is preferable to avail a credit card balance transfer. You can save on interest payments and you can save on money transfer from credit card to bank account.
You can transfer money from your credit card to your bank account but before that consider the interest rate and fees payable.
Interest rate- If you transfer funds from credit card to bank account retail interest amount will be charged. There are no interest free days.
Fee payable- A certain fee amount is charged for transfer of funds from credit card to bank account. The rate of the fee depends on your card provider which is usually 3% to 4%.
Check: How a credit card comparison is helpful
Transfer funds through E Wallets
You can use mobile wallets app or official websites to transfer funds from credit card to your bank account.
Direct transfer of funds from credit card to bank account is not possible. You have to add money to your ewallet using a credit card. Then you have to transfer funds from ewallet to your bank account.
Check Here: COVID-19: Use Ewallet Payments and Stay Safe
Before you transfer funds from credit card to bank account remember the below points.
- E-Wallets will charge a transaction fee. The fee amount can be up to 3 percent of the transfer amount.
- The amount may get reflected in your bank account in one to five days.
- The interest rate is higher than the standard credit card rate of interest.
There are money transfer credit cards available which are meant only for that specific purpose. Some cards charge low interest or zero rate of interest for certain periods of time.
Transfer funds using Moneygram and Western Union
Apart from E-Wallets, you can transfer funds from credit cards to bank accounts using money gram and western union.
Money gram- By using MoneyGram you can send money across the globe. Below are the steps.
- Select the bank account, the receiver and the country. Write the full name of the receiver. In case you’re sending money to your own account, write full details of your account and name completely.
- Select the option Account deposit on screen and enter the transfer amount.
- Under payment method select credit card. Exchange rate (if applicable) and fees payable will be displayed on the screen.
- You have to provide your information and it will get authenticated.
- Provide the recipient’s bank account information, name and other details.
- Money will get securely transferred into a bank account.
Western Union- Similar to MoneyGram funds from credit cards can be moved to a bank account in the following ways.
- Register and login to your western union profile.
- Select the transfer amount, country and method of delivery as a bank account.
- Enter receiver information with bank details
- Choose payment method as Credit Card
- Tracking numbers also known as Money Transfer Control Number and a confirmation email will be sent to your registered email.
- Money will be sent to the recipient account.
Conclusion
Funds transfer from credit cards to bank accounts involves fees for the transferred amount. The amount can be transferred to your savings account or current account. It is a cheaper source of getting funds than a personal loan or making a cash withdrawal from a credit card which incurs a high interest rate and charges.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.
